What Is a Certificate of Good Standing and Why Do You Need It?

While you don't necessarily need a Certificate of Good Standing, it can go a long way toward cementing a good reputation and establishing trust. You'd be wise to consider getting one if you are just forming your business , though it can be useful even if your business has been around for years.

Here, we'll break down what a Certificate of Good Standing is, why having one matters and how you can obtain one yourself.

What Is a Certificate of Good Standing?

In short, a Certificate of Good Standing is a document issued by your Secretary of State that shows your business is compliant with your state's incorporation regulations and is therefore allowed to do business.

This is comparable to having a driver's license, passport or another form of government-issued ID — a Certificate of Good Standing proves that your limited liability company (LLC) is officially registered and authorized to do business in your state.

Depending on which state you run your business in, a Certificate of Good Standing may also be known as a Certificate of Existence, a Certificate of Authorization or a Certificate of Status. Either way, it comes in the form of a one-page document provided by your state government that shows proof of your business entity.

Why Does a Certificate of Good Standing Matter?

Now that you know what a Certificate of Good Standing is, it's easy to see why it matters for your business. In short, it's an important document you can use to show proof that your business is officially registered and allowed to operate in a specific state.

This could come in handy when obtaining a loan, renewing a business license or filing your business taxes . Having this type of certification will also showcase your business’s good reputation and prove you are a law-abiding business owner who follows the rules.

You may find yourself needing a Certificate of Good Standing in a variety of situations, such as:

• Applying for Foreign Qualification
• Obtaining a business loan
• Securing funds from investors
• Getting government-issued permits or licenses
• Putting your business up for sale

How Do You Get a Certificate of Good Standing?

So how do you actually go about getting a Certificate of Good Standing? Fortunately, the process is relatively straightforward.

Once you have your business entity formed and registered with your Secretary of State, you'll need to file the appropriate Certificate of Good Standing form with your state. In most cases, you can find the form you need by performing a quick Google search or looking on your state's Secretary of State website.

After you apply for and receive your Certificate of Good Standing, make sure to stay up-to-date on any business renewal fees, file your annual reports on time and pay any other necessary business taxes.

Get Your Certificate of Good Standing Today

Ready to get your Certificate of Good Standing? Bizee can handle all the necessary paperwork for an affordable price. And if you form your business with Bizee, it's included in our $0 + state fee business formation package.

As an added bonus, you'll also get a free Registered Agent for the first year. So save your time and let Bizee handle the logistics while you keep focusing on what matters most: growing your company.