What Is a Certificate of Good Standing?

A Certificate of Good Standing is often required in several important business situations. Here are some common examples of when you might need this document:

• Opening a Business Bank Account: Most banks require proof that your business is in good standing with the state before allowing you to open a business bank account.
• Applying for a Business Loan: Lenders want to ensure they are dealing with businesses that are properly registered and compliant.
• Expanding Your Business into Other States: If you’re planning to register your business in another state (known as foreign qualification), that state will require a Certificate of Good Standing from your home state.
• Renewing Business Licenses: Some licensing authorities may require a Certificate of Good Standing when you renew your business licenses or permits.
• Entering into Contracts or Agreements: Business partners, contractors, or other third parties may ask for proof of good standing before finalizing contracts or agreements.

The process of obtaining a Certificate of Good Standing is straightforward and can usually be done online through your state’s Secretary of State office. Here’s a general guide:

1. Ensure Compliance: Before you can obtain a Certificate of Good Standing, your business must be in full compliance with state requirements.
2. Search for Your Business: Visit your state’s Secretary of State website and use the business entity search tool to locate your company by name or registration number.
3. Request the Certificate: Once your business information is displayed, you will typically see an option to request a Certificate of Good Standing.
4. Pay the Required Fee: Fees for obtaining a Certificate of Good Standing can range from $10 to $50, depending on your state.
5. Receive the Certificate: After the payment is processed, you can download the certificate digitally or request a physical copy.

Technically, a Certificate of Good Standing does not have a set expiration date. However, third parties, such as banks or licensing authorities, often request a certificate dated within the last 30 to 90 days to ensure that the business remains compliant.Keep in mind that your business’s compliance is usually tied to periodic filings or renewal dates, so while the certificate itself may not expire, its validity is subject to the state’s requirements for keeping your business in good standing.

Both domestic and foreign entities can obtain a Certificate of Good Standing from the state where they are registered.

• Domestic Entities: These are businesses that were originally formed within the state and are registered there.
• Foreign Entities: These are businesses that were formed in a different state but have registered to conduct business in another state.

No, a Certificate of Good Standing is not the same as a business or occupational license. A business license permits your company to engage in specific types of activities, while a Certificate of Good Standing proves that your business is compliant with state regulations and authorized to operate.You are not legally required to have a Certificate of Good Standing unless a third party requests it, but your business does need to be properly registered with the state to operate.