A business, no matter which state it is located in, has to look after certain matters. A business needs to ensure that it complies with state regulations and fulfills all necessary requirements. 

This is important to maintain a business’s ‘good standing’. If the business is in good standing it can obtain a certificate of good standing from its state’s filing agency. But why? 

This article will take you through the details of a certificate of good standing, reasons to have it, and the process through which you can get one from your state. 

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What Is a Certificate of Good Standing?

A certificate of good standing is a document issued by the Secretary of State certifying that your company is registered and authorized to conduct business in your state. 

The certificate of good standing signifies that your company complies with all state regulations. These may include filing all necessary documents such as annual reports, paying taxes, and other registration fees. 

As an HR professional, you may ask “What is a certificate of existence” as you may have come across this question often. To put it simply, it is another name for a certificate of good standing. It is often referred to as a  certificate of authorization, letter of good standing, and business certificate of good standing. However, it is most commonly referred to as a certificate of good standing. 

Companies formed in the state and those  formed in another state but registered as a foreign entity are both entitled to a certificate of good standing

A certificate of good standing comes with an expiration date and expires in the following situations:

  • When a company is due to get its registration renewed 
  • When a company’s taxes or other state fees are due 

An important point to remember is that a company is not required to have a certificate of good standing to legally conduct business activities in a state. Therefore, it can do so without being issued this certificate. 

A company requires a certificate of good standing only under certain circumstances which are explained in the next section. 

Reasons to Get a Certificate of Good Standing

As mentioned earlier, a company doesn’t need to have a certificate of good standing. Most companies get it issued for their own records. However, you need to know the reasons for which your company might need one. 

Below is a list of situations under which your company might want to get a letter of good standing from the Secretary of State: 

  •  applying for business loans 
  •  opening a business account with a bank or carrying out other transactions
  •  requiring small investments for business 
  •  forming a contract with another company or supplier
  •  registering your company in additional states to grow business  
  •  forming partnerships 
  •  renewing business licenses 
  •  selling the business
  •  merging your company with another  

a certificate of good standing helps a business grow.

Do I Need a Certificate of Good Standing?

Not all business entities require a certificate of good standing. 

If you are a sole proprietor, you do not need to apply for a business certificate of good standing or register with your state. Hence, you can continue to conduct business activities without impediments. 

However, if your company is organized as a corporation or a limited liability company, then you may need to apply for one. 

Requirements for a certificate of good standing vary with the state your company is established in. Some business entities such as limited partnerships limited liability limited partnerships and limited liability partnerships may or may not require a business certificate of good standing depending on the state’s regulations.

How to Get a Certificate of Good Standing?

The process of getting a letter of good standing is easy. Although every state has distinct requirements and protocols, most states generally take up to a week to issue the certificate. 

You just have to go through a few steps to obtain a certificate of good standing for your company. 

Check if your business is required to register with your state

In case you’re not sure whether your business entity needs to be registered or not, you can always check in with your state’s filing agency. 

Ensure your business complies with state regulations 

A business certificate of good standing will only be issued if your company has fulfilled all state requirements. These may include paying all dues and taxes, filing all necessary documents including annual reports, and legal authorization to conduct business activities.  

Request your state’s filing agency to issue a certificate of good standing 

These certificates are normally issued by the Secretary of State but in some cases, the filing agency can also issue one. 

You have the option of requesting your certificate of good standing via email, mail, online, fax, or in person. 

You have to pay a fee to get your certificate. The fees vary depending upon the state and the type of business entity you operate. 

Importance of Maintaining a Certificate of Good Standing

Maintaining a certificate of good standing is similar to maintaining a good reputation among your peers. 

You wouldn’t want your friends to question your credibility and sever ties with you. 

Likewise, your business may have the same aspirations. It intends to expand its operations, establish connections within the business community and enjoy certain rights that the state has to offer. 

As an HR professional, you may want to stay informed about the significance of maintaining a certificate of authorization and the consequences if done otherwise. 

The Need

Like any other business, yours may also want to grow and reach new heights. This could mean introducing new products, growing the customer base, or branching out to other states or countries. 

In the case of the latter, your business will have to register itself as a foreign entity. For instance, if you are originally based in Ohio and intend to open up a new office in New York you will be required to present a certificate of existence.

Some states may require you to present a letter of the certificate that expires within a short span such as 90 days. This is their way of knowing if you have remained compliant with your state of formation. In that case, you have to be mindful of when your certificate needs to be renewed. 

For that, you can hire a full-service agent who can monitor your entity and keep you updated about any status changes that may occur. 

The Consequences of Not Having One

In case your business fails to comply with the state’s regulations, it may be fined. This can adversely impact your company’s credibility and authority.

In a situation where you would like to make your business’s presence in another state or country, your company might have to face challenges and resistance. 

Failure to comply can also result in a company becoming void, revoked, or dissolved altogether. The company could also lose its limited liability protection. When a company is no longer protected by the state authority, it can easily be taken over by another entity. 

Another problem that your entity could face is losing access to state courts and becoming prone to identity theft. Losing a good standing means putting your company’s website, personal information, and identity at a risk.

Therefore, it is suggested that you keep a monthly check on your entity’s status and stay informed about your state’s regulations. 

a certificate of good understanding helps a business grow.

How to Obtain a Certificate of Good Standing in your State?

The tables below will give you basic information about your state’s issuing authority, the fee structure to get a certificate of good standing, and what it includes. 

Ohio

Issuing authorityOhio State Department
Fees
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Time duration
  • Standard: 3 days
  • Urgent: Same day
Content of the certificate
  • Company’s date of incorporation
  • Company’s registered name
  • Date of incorporation
  • Type of business-Corporation or LLC
  • Standing of the company
  • Signed and stamped by the secretary of state

Delaware  

Issuing authority Division of Corporations at the Delaware Secretary of State
Fees 
  • Certificate of Good Standing: US$250
  • Company search report: US$140 
  • Expedite fee: US$85 
Time duration
  • Standard: 4 – 6 days
  • Urgent: 2 – 3 days 
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • Company File Number
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • Signed and stamped by the secretary of state 

Illinois

Issuing authority Department of Business Services
Fees 
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • Company File Number
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • Signed and stamped by the secretary of state 

Maryland

Issuing authority Corporate Charter Division
Fees 
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Time duration  
  • Standard: 2 days
  • Urgent: same day 
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • Signed and stamped by the secretary of state 

New Jersey 

Issuing Authority Secretary of State 
Fees 
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Time duration  
  • Standard: 2 days
  • Urgent: Same day 
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • Business Entity ID Number
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • Signed and stamped by the secretary of state 

New York 

Issuing Authority State of New York Department of State 
Fees 
  • Certificate of Good Standing: US$120                                               
  • Company File: US$60
  • Expedite fee: US$40
Time duration  
  • Standard: 2 days
  • Urgent: Same day

Texas

Issuing Authority Texas Secretary of State 
Fees 
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Time duration  
  • Standard: 3 days
  • Urgent: Same day 
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • State seal of Texas 
  • Business Entity ID Number
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • Signed and stamped by the secretary of state 

Colorado  

Issuing Authority Colorado Secretary of State
Fees 
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Time duration  
  • Standard: 3 days
  • Urgent: same day 
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • State seal of Colorado 
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • Signed and stamped by the secretary of state 

California 

Issuing Authority California Secretary of State
Fees 
  • Certificate of Good Standing: US$120
  • Company File: US$60
  • Expedite fee: US$40
Time duration  
  • Standard: 3 –   4 days
  • Urgent: 2 days 
Content of the certificate 
  • Company’s date of incorporation
  • Company’s registered name 
  • Date of incorporation 
  • Type of business-Corporation or LLC
  • State seal of Colorado 
  • Authentication number of the certificate 
  • Confirmation of the company’s legal status and records 
  • Standing status of the company 
  • signed and stamped by the secretary of state 

To apply for a certificate of good standing in other states: 

Alabama

Alaska

Arkansas

Arizona

Columbia

Connecticut

Florida

Georgia

Hawaii

Idaho

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana 

Nebraska 

Nevada

New Hampshire

New Mexico

North Carolina

North Dakota   

Oklahoma  

Oregon  

Pennsylvania 

Puerto Rico  

Rhode Island  

South Carolina  

South Dakota  

Tennessee 

Utah  

Vermont 

Virginia  

Washington 

West Virginia  

Wisconsin  

Wyoming

Take a Step Forward

Having a certificate of good standing will benefit your company in multiple ways. It is a good practice to stay compliant with your state’s regulations so that at no point should you face obstacles in growing your business.

From an HR standpoint, you should stay informed about the process and make sure that your company stays compliant. 

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