Every US state issues certificates of good standing (sometimes also referred to as “certificates of existence”), though the process is a little different in each state. If you’re interested in getting a certificate of good standing for your business, you would do so through the state agency that registers business entities.
What Is a Certificate of Good Standing?
This document is very much what it sounds like. It’s a hardcopy certification from the state affirming that a company is properly registered and authorized to do business therein. It’s proof that the company has filed the relevant paperwork to establish the entity, confirm it is in active status and, in some states, complied with local zoning and permitting regulations, filed and paid business taxes.
What Are Reasons for Getting a Certificate of Good Standing?
You aren’t required to have a certificate of good standing to operate (unlike a business license). But there are number of occasions where you may be asked to present a certificate of good standing. Common examples include when you’re:
- Opening a business bank account
- Applying for a business line of credit or other credit account
- Applying for a business loan
- Applying for business insurance
- Seeking venture capital or other investments
- Seeking a federal, state, county, or municipal government contract
- Entering into a contract with another business entity
- Registering to do business in another state
What Business Entities Can Get a Certificate of Good Standing?
Any type of business entity that must register with the state can be issued a certificate of good standing. There are some variations in different states regarding which types of entities must register, but in general, this includes:
- Limited Liability Companies (LLCs)
- Limited Partnerships (LPs)
- Limited Liability Partnerships (LLPs)
- Limited Liability Limited Partnerships (in states that recognize this entity)