Get a Certificate of Good Standing

A Certificate of Good Standing is a legal document issued by the state in which the business was formed or where it currently operates. It serves as evidence that the business entity exists and that it’s authorized to conduct business in that state. It’s also evidence that the company complies with state law and has met all statutory requirements.

Certificates of Good Standing are sometimes called Certificates of Existence, Certificates of Status, or Certificates of Authorization, depending on the state. Annual renewals are required either at the same time as other business renewals or at the end of the calendar year. However, unlike business licenses, a Certificate of Good Standing is not required in order to conduct business.

Other Names for Certificate of Good Standing

With the above general definition in mind, be aware that a Certificate of Good Standing can have a slightly different meaning in different states. In fact, not all states use the phrase “Certificate of Good Standing.” Some states use the term “certificate of existence” or “certificate of authorization.” Other names include:

• Certificate of Status
• Status Certificate
• Existence Certificate

In Kentucky, a “Certificate of Existence” is just “conclusive evidence that a domestic corporation or domestic limited liability company is in existence.” It does not speak to whether the business is currently compliant or active. In Washington state, however, the same phrase, “Certificate of Existence,” constitutes “proof [that] an entity is current and authorized to do business in the state.” For that reason, take a minute to review how your state defines and terms a Certificate of Good Standing.

Do you need a Certificate of Good Standing?

A Certificate of Good Standing confirms that your business entity has paid its franchise taxes and registration fees, is legally registered with the state, and all required documents have been filed. It also verifies that your business has filed and is up to date on all required annual reports, has not dissolved, and has no outstanding taxes/fees due (learn about annual report definition). Certificates typically include the date, the signature of the Secretary of State, and the state seal.

Fees for a Certificate of Good Standing vary from state to state. Some states don’t charge anything for certificates. However, others charge as much as $50. Fees may also vary depending on how the request is made.

In most states, the Secretary of State’s office issues Certificates of Good Standing, often through a division under the Secretary of State’s banner. In the states listed below, however, a different entity issues Certificates of Good Standing:

• Alaska: Community and Economic Development, Department of Commerce
• Arizona: Arizona Corporation Commission
• Delaware: Division of Corporations
• Hawaii: Department of Commerce and Consumer Affairs, Business Registration Division
• Maryland: Department of Assessments and Taxation
• Massachusetts: Secretary of the Commonwealth of Massachusetts, Corporations Division
• Michigan: Department of Licensing and Regulatory Affairs, Corporations Division
• New Jersey: Department of the Treasury, Division of Revenue and Enterprise Services
• Utah: Utah Department of Commerce, Division of Corporations and Commercial Code
• Virginia: State Corporation Commission
• Washington, D.C.: Department of Consumer and Regulatory Affairs, Corporations Division
• Wisconsin: Department of Financial Institutions

If your business needs a Certificate of Good Standing, ZenBusiness can help you secure one, no matter which state you’re in.

You don’t have to request a Certificate of Good Standing on an annual basis. However, you’ll find one handy — or required — in a host of situations, including the following:

Registering to Do Business in Another State

When you want to do business in a state other than the one you’re registered in, your business is considered a foreign entity. (In your own state, your business is a domestic entity.) Most states don’t allow a foreign entity to do business without a Certificate of Good Standing from the state in which it was formed.

Securing Funding

Many lenders require a Certificate of Good Standing to approve financing.

Opening a Business Bank Account

Banks may also require a Certificate of Good Standing to set up credit or debit card processing or to take out a business loan.

Buying Business Insurance

Insurance companies want to know that your business is in compliance before they issue any insurance policies.

Entering into a Contract with the State

If you’re applying for a government contract, including a small business loan, expect to supply a Certificate of Good Standing.

Entering into a Contract with Investors or Another Business

Potential business partners or investors may ask for a Certificate of Good Standing. It’s a good idea for you to ask for a Certificate of Good Standing in exchange. Vendors may also ask to see your Certificate of Good Standing to give them reassurance that their bills will be paid.

Selling or Transferring All or Part of Your Business

Even if a potential buyer for your business doesn’t ask for a Certificate of Good Standing, having one ready is a good idea. It serves as evidence that you’re in compliance with all regulations.

Renewing Licenses or Permits

In some states, you need a Certificate of Good Standing to renew some business permits or licenses. With a Certificate of Good Standing, you can avoid any awkwardness or delays in your business deals. Some companies request Certificates of Good Standing from the state on a regular basis just to have them on file.

Certificates of Good Standing apply to business entities that are required to register with the state. These typically include corporations and limited liability companies (LLCs). In some states, limited partnerships and limited liability partnerships may also be able to request the certificates. They’re issued to business entities formed within the state as well as to those formed elsewhere but registered in the state.

However, sole proprietorships and general partnerships cannot request Certificates of Good Standing since they’re not required to register with the state.

To get a Certificate of Good Standing, start by checking informally to make sure your business complies with state regulations. Confirm as well that you’ve paid all required taxes. You do this through searching state websites. You must have the original name under which you registered your business to complete the search.

A faster, easier option lets you check your Certificate of Good Standing off your to-do list when you use the ZenBusiness Certificate of Good Standing service.

This varies from one state to the next. Some states generate certificates on a same-day basis for printing on your own computer. Others start the process immediately but take up to three weeks for processing.

Many states are happy to expedite requests for Certificates of Good Standing. However, some of them add significant surcharges to speed up their processes.

Each state has separate compliance requirements. Most often, a state requires a Certificate of Good Standing or the equivalent for businesses that are registered in a different state. For example, if your business is registered in Arizona but does business in California, California requires a Certificate of Good Standing from Arizona. Some states ask entities for annual business filings of various sorts. Most ask businesses to keep their state taxes paid to stay in compliance.

Businesses that lose their good standing risk a lot of potential issues. In many states, a business that’s not in good standing can’t initiate a court case. Getting funding or establishing relationships with new business partners can prove challenging, too.

If you’re hoping to qualify as a foreign corporation or foreign limited liability company (LLC) in another state, you’ll be unable to until you can get a Certificate of Good Standing. And, of course, businesses who fall out of good standing also are likely to incur fines and penalties.

Every state has slightly different reasons a business entity could lose its good standing status. Some of the most common reasons could be not filing your annual report, failing to maintain a registered agent (For more information, please see our what is a registered agent page), not maintaining a required license, or not paying certain business taxes. Basically, if your state has a statutory compliance requirement for your business structure and you don’t uphold it, you could lose your good standing. Criminal activities like fraud can also compromise your good standing.

The good news? Often, you can correct your standing in a few steps.

Getting back into good standing can seem like a hassle, but in many cases, it’s doable. Every state has slightly different requirements, but here are the basic steps you can expect.

• Correct the compliance issue that caused your good standing loss: If you have delinquent periodic documents like annual reports, file each outstanding report. If you let your registered agent coverage lapse, file a Change of Registered Agent form (or similar document) to set up a new agent. File and pay any overdue tax returns.

• Pay outstanding fees: If you lost your good standing for a delinquent report or a late tax lien, odds are you’ll have late fees to pay. Fulfill those monetary obligations to all state agencies you owe money to.
• File reinstatement paperwork: Some states have a specific form, an Application for Reinstatement or Certificate of Revival, that you can file to get reinstated. Other states require you to contact the Secretary of State directly to request reinstatement.

To be sure that you’ve met all the state requirements for getting back in good standing, we recommend consulting with your Secretary of State (or equivalent government agency). If there are any outstanding compliance failures, they’ll let you know.

If your business is denied a Certificate of Good Standing, there are three basic steps you can take to rectify the situation.

• Determine the reason for denial: First, confirm why your certificate was denied. Review the communication from the state agency or contact them directly for clarification.
• Remedy the situation: Once you understand the reason for denial, take appropriate action to resolve the issue. This may involve paying outstanding fees or fines, submitting missing documents, or rectifying any other non-compliance.
• File the necessary forms: In some cases, you may need to file specific forms to address the issue. These forms can vary depending on the nature of the non-compliance and the requirements of your state.

Every state varies on its exact procedures for getting back in good standing, but those are the general steps you can expect. If in doubt, reach out to your Secretary of State for specific information.