Understanding the Certificate of Good Standing: What You Need to Know

What is a Certificate of Good Standing?

A Certificate of Good Standing, also known as a Certificate of Existence or Certificate of Authorization, is a document issued by the state government to confirm that a company or business entity is in compliance with all the necessary requirements to operate legally in that state.

Why is the Certificate of Good Standing Important?

The Certificate of Good Standing serves as proof that a business is compliant with state regulations, laws, and tax obligations. It demonstrates that the business entity:

  • Is legally registered and authorized to operate in the state
  • Has filed all necessary reports, such as annual or biennial reports
  • Has paid all fees, penalties, and taxes due to the state
  • Is in compliance with all legal, regulatory, and licensing requirements

This certificate is often required for various business transactions, including:

  • Applying for business licenses or permits
  • Opening a business bank account
  • Entering into contracts or agreements with other entities
  • Obtaining financing or loans

How to Obtain a Certificate of Good Standing

The process to obtain a Certificate of Good Standing may vary slightly from state to state, but generally involves these steps:

  1. Check the state’s official website or the Secretary of State’s office for information and requirements.
  2. Gather the necessary information about your business, including its legal name, identification number, and date of formation.
  3. Ensure that all required reports, taxes, and fees are up to date and paid.
  4. Submit the application and required fees to the appropriate state office.
  5. Wait for processing, which may take a few days to several weeks depending on the state.
  6. Receive the Certificate of Good Standing once the application is approved.

Consequences of Not Having a Certificate of Good Standing

Not having a Certificate of Good Standing can have negative implications for your business:

  • Difficulty in securing loans or financing
  • Restricted ability to enter into contracts or agreements
  • Inability to open a business bank account
  • Loss of credibility and trust with potential partners, suppliers, or customers
  • Possibility of legal penalties or fines

Certificate of Good Standing vs. Certificate of Incorporation

While a Certificate of Good Standing confirms compliance with ongoing legal requirements, a Certificate of Incorporation is a document issued at the time of a company’s formation, verifying its status as a legal corporation. Both documents are important for different purposes:

Certificate of Good Standing Certificate of Incorporation
Confirms ongoing compliance Confirms legal incorporation
Required for various business transactions Often required for initial setup and registration
Renewable over time Permanent document


A Certificate of Good Standing is a crucial document that showcases your business’s compliance with state regulations. Obtaining and maintaining this certificate not only ensures your business’s legality but also opens doors to various opportunities and collaborations. Stay up to date with the requirements and take necessary actions to secure your business’s good standing.