Managing Your Business
What Is Certificate of Good Standing?
Every business, from the largest corporation to the smallest LLC, faces many hurdles as they attempt to jump through the hoops of incorporation. It’s quite the accomplishment when a company is officially filed with the government. Many businesses present themselves as meeting the standards of incorporation, without actually having accomplished them. In order to create a safeguard against misrepresentation, there is an official document that may be issued by the state of incorporation, which indicates that the business in question has meet specific standards.
By obtaining a Certificate of Good Standing (often referred to as a Certificate of Existence or Certificate of Authorization), your business will be able to verify and prove that it is authorized to conduct business in your state and that it is in full compliance with all regulations.
Why would you need this certificate?
There are times when you will need to prove you properly filed and remain in compliance. Sometimes banks require a Certificate of Good Standing. If you are going through a transaction such as a merger, sale or financing, the other party may want a Certificate of Good Standing as part of their due diligence. Essentially, any time you need to show you were properly formed and still in compliance, you will likely need a Certificate of Good Standing.
What information is included on the certificate?
The following information is typically outlined on a Certificate of Good Standing:
- You organization’s official name
- The fact that you are authorized to legally conduct business in the state
- That your organization is current on all state taxes and fees
- That your company’s annual report requirements have been observed
- That the company has not recently filed an Articles of Dissolution
Other notable aspects
Should your company’s request for a Certificate of Good Standing be denied by the state your company will be considered to be in “bad standing”, but still in existence. If this is the case, it is recommended that you quickly address any ongoing compliance requirement issues that your organization may have.
Swyft can help
We can take care of the leg work for you! Swyft offers a convenient service to help you secure your certificate. Find out more about this service here. If you'd like to talk to our experienced business professionals, contact us today!