LLC Good Standing: Everything You Need to Know
LLC good standing is the state of being up-to-date with any reports you need to file and complying with all the rules and regulations that apply to your LLC.3 min read
2. Good Standing for Other LLCs
Good Standing for Your LLC
LLC good standing is the state of being up-to-date with any reports you need to file and being compliant with all the rules and regulations that apply to your LLC, or limited liability company.
A Certificate of Good Standing (also known as a Certificate of Authorization or a Certificate of Existence) is a state-issued document that certifies that your LLC is considered to be in good standing in the eyes of the state and is authorized to do business therein. A Certificate of Good Standing may often be required to take out a business loan, file business taxes, or renew business licenses. It also will show that a business entity has a registered agent and has not had to file for dissolution.
Certificates of Good Standing may vary in their particulars between states, but the basic information they will contain usually includes your LLC’s name, text assuring that your LLC is allowed to do business within the state, and perhaps a seal or some other sign of authenticity.
In order to remain in good standing, an LLC should meet the following requirements:
- Be up to date on any fees, annual, biennial, or otherwise, that the Secretary of State requires.
- Be up to date on filing any reports, annual, biennial, or otherwise, that are required.
- Be up to date on paying any franchise taxes or business fees that are required.
If this is done, then your LLC will be said to be in good standing. This is a desirable state to be in because in the course of running your LLC, the Certificate of Good Standing may be required to conduct a wide variety of business. For example:
- If you are applying to other states for foreign qualification to do business there, their governments may request to see your Certificate of Good Standing before they authorize your request.
- If you are applying for a loan from a bank or other lender, they may wish to see your Certificate of Good Standing to verify that your LLC exists, that it has a good business history, and that it has good credit.
- If you are courting potential business partners or investors, they may want to see your Certificate of Good Standing as an assurance that you are a legitimate business partner with a track record of being in compliance with regulations and laws.
- If you are seeking to obtain or renew a permit or license, the regulators of such documents may request to see your Certificate of Good Standing before they give you their approval.
- If you desire to sell your business, potential buyers may want to see your Certificate of Good Standing as proof of the existence of the business and its compliance with regulations and laws.
Because of all this, you do not want to let your LLC fall out of good standing. If it does, it may be very difficult to conduct business.
Good Standing for Other LLCs
If you desire to find out if another LLC is maintaining its good standing, you may search your state’s Corporation/LLC Database by LLC name or file number. By doing so, you will be able to see a File Detail Report pertaining to the LLC or obtain a Certificate of Good Standing for an LLC, if it has one. A File Detail Report includes the LLC’s basic information, such as:
- LLC name
- Formation/registration date
- Address and name of its registered agent
- Status as member-managed or manager-managed
- The last date of filing for the annual report
A Certificate of Good Standing may be ordered for a small fee, varying from state to state. If you pay with credit card, you can print the certificate yourself once the transaction has been approved. There may be a small fee (minimum of $1) for credit card transactions.
In addition to the business benefits of staying in good standing, the fact that anyone can see if your LLC is in good standing at any time may be another incentive to maintain good standing.
If you need further help understanding or maintaining LLC good standing, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5-percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.