Understanding a Certificate of Good Standing
A certificate of good standing, also known as a “Certificate of Existence” or “Certificate of Authorization,” is a corporate document that states a business is in compliance with the laws of its jurisdiction. The document proves that the business is up-to-date with all of its required registrations, filings, and taxes and is legally able to conduct business.
A certificate of good standing allows a business to prove that it is in satisfactory standing with state authorities. Depending on the state, the document can be called a certificate of status, certificate of existence, certificate of authorization, good standing certificate, or certificate of compliance.
How to Obtain a Certificate of Good Standing
A business must obtain a certificate of good standing from the state agency that oversees the formation and administration of businesses in that state. The application process typically requires payment of a fee, completion of forms, and submission of supporting documents. A business can also request a certificate by mail or online, depending on the state’s regulations.
Why a Certificate of Good Standing is Important
A certificate of good standing is an important tool for verifying a business’ legal status. To apply for a loan, close bank accounts, or enter into contracts and partnerships, it is often necessary to provide proof of good standing with state authorities. Lenders, partners, and other business relationships typically require a business to have an up-to-date certificate to ensure its legitimacy.