Do I Need a Certificate of Good Standing for My LLC?

Key Takeaways:

• A Certificate of Good Standing proves that a business has met all legal and financial obligations in its state of formation.
• It is often required for obtaining business financing, entering contracts, expanding into new states, and renewing licenses.
• Each state has its own process, cost, and time frame for issuing a Certificate of Good Standing.
• Some states require a certificate dated within a specific timeframe (30, 90, or 180 days).
• Businesses that fall out of good standing may need to take corrective action before obtaining a certificate.
• An attorney can assist in navigating the application process and maintaining compliance.

Certificate of Good Standing

A Certificate of Good Standing, also called a "Certificate of Existence" or "Certificate of Authorization," is a state-issued document showing that your LLC or company has met its statutory requirements and is allowed to do business in that state.

A Certificate of Good Standing confirms that your business has paid all state fees, fulfilled the annual report requirement, and made payments for franchise taxes. Many corporations request a Certificate of Good Standing for their own records.

A Certificate of Good Standing can also be required by state governments if you are making use of foreign qualifications, or by lenders when you're attempting to acquire financing, make transactions, or obtain potential business partners or buyers in a foreign country.

You may need to keep your Certificate of Good Standing current to renew specific licenses or permits. Additionally, a Certificate of Good Standing can serve as necessary proof when it comes time to sell your business. Also, if you're trying to register to do business in more states, these states might ask for a copy of your Certificate of Good Standing.

Certificates of Good Standing generally contain the name of the entity, a brief clause stating that entity is allowed to do business in the jurisdiction and is relying on the jurisdiction where it was obtained, and it may also be on particular ornamental paper or have an ornamental embossed seal of some form on it to prove its authenticity.

Why an LLC Might Need a Certificate of Good Standing

A Certificate of Good Standing is not always required for an LLC, but certain circumstances may make it necessary:

• Opening a Business Bank Account – Some financial institutions require proof that your LLC is in good standing before allowing you to open an account.
• Applying for Business Loans or Credit – Lenders often request a Certificate of Good Standing as part of their due diligence before approving loans.
• Expanding into Other States – If your LLC wants to register as a foreign entity in another state, you will likely need a Certificate of Good Standing from your home state.
• Securing Contracts with Clients or Vendors – Some clients, especially government agencies and large corporations, may require a Certificate of Good Standing before entering into contracts.
• Maintaining Business Licenses and Permits – Certain states and industries require businesses to provide proof of good standing when renewing permits or licenses.

If you are unsure whether your LLC needs a Certificate of Good Standing, consult the requesting party or seek advice from a legal professional.

How to Get Certificates of Good Standing

A Certificate of Good Standing can be obtained for an LLC, company, LLP, LP, or some other sort of entity if you're in good standing with your own home state. Some states require a Certificate of Good Standing to be dated within 30 days of the date you are using it. Some states require 90 days, and there are a couple of states that require only six months' previous good standing. Most states help you provide them with a duplicate of the certificate, which means you may order it from your own home state by fax, online, or email, and mail a copy of the certificate to the requesting party.

There are a couple of states that require the certificates to be proven authentic. Those states generally have access to a listing of other states that allow you to get the Certificate of Good Standing online if you are registering in a new state. If you plan to expand your business into a new state, you will need a Certificate of Good Standing to present to the new state authority.

Steps to Obtain a Certificate of Good Standing

The process for obtaining a Certificate of Good Standing varies by state, but generally includes the following steps:

1. Check Your Business Status: Before applying, ensure that your LLC is in compliance with state requirements, including paying taxes and filing annual reports.
2. Determine the Correct Agency: Most states issue Certificates of Good Standing through the Secretary of State’s office, but some use other government agencies.
3. Request the Certificate: This can usually be done online, by mail, or in person, depending on the state.
4. Pay the Required Fee: Fees vary by state and may depend on the processing speed you choose.
5. Receive the Certificate: Processing times range from instant online downloads to several weeks for mailed requests.

Many states allow businesses to request expedited processing for an additional fee.

What Happens If Your LLC Is Not in Good Standing?

If your LLC is not in good standing, you may be unable to obtain a Certificate of Good Standing until you resolve outstanding issues. Common reasons for losing good standing include:

• Failure to File Annual Reports – Many states require LLCs to submit periodic reports.
• Unpaid State Taxes or Fees – Franchise taxes, annual fees, or other state-mandated charges must be paid.
• Registered Agent Issues – If your registered agent resigns or is not available, your LLC may lose good standing.

To restore good standing, take the following steps:

• Contact your state’s business filing agency to determine the specific issues.
• File any missing reports or pay outstanding fees.
• Update registered agent information if necessary.
• Request a reinstatement if your LLC was administratively dissolved.

Once these steps are completed, you can request a Certificate of Good Standing.

How Much Does a Certificate of Good Standing Cost?

The following is a chart showing the cost and time frame for getting a Certificate of Good Standing in each state.

Frequently Asked Questions

1. Do I need a Certificate of Good Standing for my LLC?
   It depends on your business activities. You may need one to obtain financing, enter contracts, expand to other states, or renew certain licenses.
2. How long is a Certificate of Good Standing valid?
   The validity period varies by state, with some requiring certificates to be issued within 30, 90, or 180 days of submission for certain transactions.
3. What if my LLC is not in good standing?
   You may need to take corrective actions such as filing missing reports, paying overdue fees, or updating registered agent information before obtaining a certificate.
4. Can I get a Certificate of Good Standing online?
   Many states allow online requests, but others require mail or in-person applications. Processing times vary depending on the state.
5. Is a Certificate of Good Standing required for tax filings?
   No, but it may be needed for business transactions like opening a bank account or securing loans. It confirms compliance with state regulations rather than federal tax obligations.

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