If you own and run a business, you’ve probably heard of a certificate of good standing. This document legitimizes your business venture and proves your company has the legal authority to conduct business. It proves you’re running a legit business.
Moreover, this document has various names like status certificate, certificate of status, certificate of existence, and authorization certificate, but “certificate of good standing” is the most common name used to refer to it. You shouldn’t confuse it with a business or occupational license, which has to be obtained to conduct your business legally. A company can conduct business legally in a state without necessarily getting a certificate of good standing but not a business license.
A good standing certificate shows that your company is registered with the state it’s in and is up to date on the state registration fees and documentation. This document has an expiration date, and after this time has elapsed, it has to be renewed.
If you are in the process of acquiring a certificate of good standing or thinking about getting one, below are some tips you can employ to ensure your business gets it.
Who Eligible for A Certificate of Good Standing?
You should note that the state does not require all business entities to register with it. Thus, not all of them will need a certificate of good standing. You may find that some types of businesses must be registered in-state A but don’t have to be in state B. Common business organizations that need to be registers are partnerships. This includes limited liability limited partnerships (LLPs, partnerships, and limited liability partnerships (LLPs).
If your business venture falls within any of these categories, chances are regardless of what state you’re in.
Where Do I Get A Certificate of Good Standing?
The secretary of state’s offices is usually the ones who issue a certificate of good standing. This can also be the state agency that is in the state your business is located. Different states have different methods of getting a certificate of good standing. You can either get in person by email, fax, or mail or over the phone. These methods and the fees imposed vary from state to state.
States like Colorado and Wyoming give certificates of good standing free of charge.
After ordering your good standing certificate, some states will send you the original copy, while others will ask you to print one yourself using an online account. You can use a copy of your original certificate, but some states only want the original.
Tips on How Do I Get A Certificate of Good Standing
The Secretary of State only issues a Certificate of Good Standing after certain conditions are met. Otherwise, you will not receive it. If you’re looking to acquire one for your business, you must ensure you meet the criteria in place.
- Ensure Your Business If Registered as A Legal Entity in Your State
You have to follow a couple of legal requirements once you start a business in any state. You should incorporate your business as an independent legal entity following the laws of its home state. This means your business is responsible for the affairs it conducts, and so it must be legally registered in the jurisdiction it plans to do business in.
- Keep Your Registered Agent Information Updated
Your registered agent receives lawsuits and other official information on behalf of your business. You must provide the name and office address of your registered agent when you form a corporation. If you want to get a good standing certificate, it is advisable to update this information as soon as it changes. If your registered agent information is out of date, you risk your business being suspended.
- Taxes and Other Financial Obligations Must Be Updated Before Application
You have to ensure that you file an annual report and pay any fees or taxes required by the state. It’s simple. All you need to do is fill out an online form.
Failure to file annual reports and pay the taxes or fees on time leads to an accumulation of penalties and fines that may stand in your way when acquiring a certificate of good standing.
- Ensure You Have Proper Corporate and Financial Records
Keeping proper business and financial records will help you restore the limited personal liability present when you own a formal business entity. One cannot be personally liable for the debts and lawsuits your business faces.
All the states require a business to have records of their financial and corporate activities, and having yours in check may increase the chances of you getting a certificate of good standing.
- Ensure Your Business Is Not in Default of The Corporate Rules
Corporate rules are the rights, relations, and laws governing how business is conducted in organizations, companies, and businesses. With your business being a legal entity under the state you’ve registered it in, it must follow all the corporate laws in that state.
Being on the right side of corporate rules is also a great way to ensure you get a good standing certificate.
Certificates of good standing are not necessary for all businesses. However, if you want to request government contracts, get a business loan, or insurance or simply grow your company, you will need one. Getting one is quick, easy, and cheap, just contact your state agency, and you’ll find all the help you need.