What is a certificate of good standing?
A certificate of good standing (sometimes also called a “certificate of existence” or “certificate of authorization”) is a document that proves that a company is duly incorporated and authorized to do business in its jurisdiction. The certificate is typically issued by the secretary of state or equivalent agency in the company’s jurisdiction of incorporation.
To obtain a certificate of good standing, a company must first complete any necessary licensing and filing requirements in its state of incorporation. Once these requirements have been met, the company can request the certificate from the appropriate state agency.
Requesting a certificate of good standing can vary from state to state but usually involves submitting an online application and paying any associated fees.
Importance of certificate of good standing
- The certificate of good standing is typically used to demonstrate the business’s authority to operate in its jurisdiction, open bank accounts, and enter into contracts.
- A good standing certificate is generally required to verify that your business is currently compliant with state regulations. This compliance lets other businesses and organizations know that it’s safe to do business with you.
- Bankers often require a good standing certificate before opening up a business account. This ensures that your company is legitimate and in good standing with the state.
- If you’re looking to enter into contracts with other businesses or customers, they may request to see your certificate of good standing as proof that you’re a reliable business partner.