Corp LLC Certificate Of Good Standing: Everything You Need to Know
Whether you plan to seek investments or expand into other states, you will need this certificate. 3 min read
2. When Is a Certificate of Good Standing Needed?
3. What Is Good Standing?
4. Cost and Timeframe by State
Obtaining a corp/LLC certificate of good standing — also known as a certificate of existence, a certificate of authorization, or a certificate of status — provides proof that your corporation or LLC has kept up with all requirements and is in good standing with the state. Whether you plan to seek investments or expand into other states, you will need this certificate.
What Is a Certificate of Good Standing?
Being a state-issued document, your certificate of good standing shows that your LLC or corporation has met all statutory requirements. This essentially means that your company is authorized to continue doing business in a particular state. This certificate also confirms that you are up-to-date with all of your fees and that you have filed your annual report.
Depending on the state, this certificate may need to be dated within 30 days, 90 days, or — in some cases — 6 months. Some states require you to show the original, but in other states, you can show a copy of the original.
Please note that a certificate of good standing should not be confused with other documents, such as your certificate of organization or your certificate of incorporation. If you are considering forming a foreign entity within another state, you will specifically need a certificate of good standing.
When Is a Certificate of Good Standing Needed?
During the lifecycle of your business, there is a good chance that you will need to present a certificate of good standing from time to time. If you plan on applying for foreign qualification, some states will ask for this certificate. Other examples of when you would need a certificate of good standing include the following situations:
- Working with lenders
- Applying for financing
- Working with potential investors
- Renewing specific permits and licenses
- Selling your business
What Is Good Standing?
Your business is considered to be in good standing once you have done the following:
- Filed all required paperwork with the secretary of state
- Paid all associated fees and are up-to-date with your taxes
- Shown that you have been operating in accordance with state laws
Although it may seem easy to achieve these goals, there are also instances that can lead to a loss of good standing. For example, if you do not file your annual report or pay applicable fees, you will not be able to obtain this vital certificate. If this happens, your corporation or LLC may lose protection in terms of personal liability. This means that actions within a limited liability company or corporation could affect the company's owners.
If you would like to prove that your company is in good standing, you will need to order a certificate from the state. This document will confirm that you have paid all state taxes and have filed your annual report on time.
Cost and Timeframe by State
Depending on where your LLC or corporation was formed, the cost and wait time will differ. Here are some examples so that you can begin planning ahead:
- Alabama — The cost is $28, and the turnaround is immediate (processed online). The same is true for Arkansas.
- Alaska — The cost is $10, and the turnaround is immediate (processed online).
- Arizona — The cost is $45, and the turnaround is immediate (processed online).
- California — The cost is $5, and the turnaround is four weeks.
- Colorado — The cost is free, and the turnaround is immediate (processed online).
- Florida — The cost is $8.75 for corporations and $5 for LLCS. The turnaround is 5-10 business days.
- Illinois — The cost is $47, and the turnaround is immediate (processed online).
- Maryland — The cost is $40, and the turnaround is immediate (processed online).
- New Hampshire — The cost is $5, and the turnaround is 5-7 business days.
- New York — The cost is $25, and the turnaround is 2-3 business days.
As you can see, the cost and timeline for each state will vary. It is important to understand these variables as regulated by your state, and it is best to plan ahead. This will ensure that you have a copy of your good standing when you need it.
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