How Long are Certificates of Good Standing Good For
It is a good question to ask when having to furnish this certificate to a potential third party vendor or bank before engaging in business.3 min read
2. Long Form Certificate
3. Short Form Certificate
4. What to Look For
5. How to Receive a Certificate of Good Standing
6. Sole Proprietorship or DBA Certificate
How long are Certificates of Good Standing good for is a good question to ask when having to furnish this certificate to a potential third party vendor or bank before engaging in business. After you form your company, you’ll need to remain compliant with the ongoing maintenance requirements, which might include filing an annual and/or biennial report, paying taxes, or other ongoing requirements.
Certificate of Good Standing
When your company is involved in a transaction, you might need to furnish a Certificate of Good Standing for your business. The certificate essentially proves that your company is in good standing and is authorized to do business in the state where it is registered.
The certificate is an official certification document that is provided by the Secretary of State. Other names for this document include Corporate Certificate of Status or Corporate Certificate of Existence. You should be aware of all name variations for this document so that you know where and how to request it should a third party vendor or financial institution require it before doing business with your company.
Long Form Certificate
Many states offer long form certificates for domestic entities, including Delaware, Washington D.C., Michigan, North Carolina, New York, New Jersey, Texas, Nevada, Virginia, and others. Such long form certificates offer additional information regarding the company, inclusive of dates and specifically notating that the company is in good standing. Therefore, companies in these states need not obtain an actual Certificate of Good Standing as they can obtain a long form certificate that includes whether or not the company is in good standing.
Short Form Certificate
Other states only offer a short form certificate, which provides only the company name and its registration date, but doesn’t identify the good standing status of the entity, nor does it include what documents were filed to date. Such states include California, Mississippi, Georgia, and Arizona. Therefore, these states will need to obtain the short form certificates along with the Certificate of Good Standing in order to meet the requirements for good standing proof.
What to Look For
Before submitting documentation to a potential business partner, you should first review the certificate to ensure that the requesting party has everything it needs to move forward with the business relationship and/or transaction.
How to Receive a Certificate of Good Standing
Your company must be incorporated in the state either as a domestic corporation or as a foreign entity that is authorized to do business in that particular state. Furthermore, you must be in compliance with all of the statutory requirements that are set forth by the state.
To remain in good standing, you must ensure that the following are met:
1.Be up to date on all annual or biennial reports
2.Be up to date on all filing fees
3.Be up to date on all tax requirements, i.e., withholding tax, franchise tax, etc.
There is no expiration date on the certificate itself, however, the requesting party might require that the certificate be predated no more than 90 days from the date of the transaction. Therefore, if your company is going to engage in a transaction with Company A, and you furnish a Certificate of Good Standing that is dated a year prior, Company A can require that you refurnish a certificate that includes a date/time stamp no more than 90 days prior to the date of the transaction. Other parties might require a certificate no more than 30 days old.
If you are not in good standing, you should immediately contact the Secretary of State’s office to find out how to become compliant. Thereafter, you should immediately fix the deficiency.
Sole Proprietorship or DBA Certificate
Neither the sole proprietorship nor the DBA (Doing Business As) can obtain a Certificate of Good Standing since these business structures are not formally registered with the Secretary of State. Therefore, if a potential business partner asks for a certificate for this type of business, you’ll want to immediately inform them that a certificate is not provided for either of these business structures since they are not registered with the state.
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