Key Takeaways

  • LLC verification helps verify a business's owners and creditworthiness, preventing fraud, resource loss, or reputation damage.

  • LLCs combine a corporation's limited liability with a partnership's tax benefits.

  • You can verify LLC status through the secretary of state's office or website.

  • Detailed periodic filings in each state where an LLC is incorporated can provide information on the LLC's exact name, formation date, registered agent, and registered office address.

  • Certificates of Good Standing confirm the business has submitted the required reports and paid necessary taxes and fees.

  • Use state databases to find detailed reports and certificates of good standing.

  • Other helpful pieces of information to check LLC status include operating agreements, EIN, and Better Business Bureau ratings, 

  • Use platforms like UpCounsel to find top attorneys for assistance with LLC verification and legal matters.

 

Do you know how to tell if an LLC is legitimate? LLC verification can help you verify a business's owners and determine its creditworthiness. 
 

Determine if a company is registered and in good standing to avoid entering into a business relationship that could lead to fraud, lost resources, or a damaged reputation.  
 

This article will cover key steps for confirming company legitimacy and different company verification methods.


 

What is an LLC?

 

To begin, here's a brief overview of this business structure.
 

A Limited Liability Company (LLC) is a hybrid of a corporation and a partnership that combines the limited liability of a corporation with the tax benefits of a partnership.
 

The LLC also provides its owners (or ‘members,’ in LLC parlance) with ‘limited liability’—that is, the members' personal assets are generally not at risk for the company's debts and liabilities.
 

The flexibility in management and ownership, with fewer formalities than corporations, are considered vital benefits of LLCs.

 

How to Check if an LLC is Legitimate

 

Fortunately, there are many methods for determining the legitimacy of an LLC. If one or more of these steps do not give you the desired answers, you can keep moving down the list.

 

Steps to Verify an LLC

Here are several steps you can follow to check LLC status.

Check State Registration to Verify LLC Status

The secretary of state's office maintains a searchable corporate database in many states. To confirm a company's LLC status, call the secretary of state's office or visit the website.
 

In most states, out-of-state companies must register with the secretary of state as an out-of-state or foreign entity before doing business there.  So even if the LLC is incorporated in a different state, it may have filed a registration in the state you are in and have an in-state office or agent.
 

Contact the company's home state for more information if your state doesn't require registration. You can also contact the company if you can't find an LLC's location on the state's website.
 

Also, remember that there are several states with more beneficial laws for businesses, such as Delaware or Wyoming, and many national companies are incorporated in these states even though they do business all over the country.  If you are having trouble finding where an LLC is from, try searching these business-friendly state websites.
 

Practice extreme caution before doing business with any companies that aren't willing to give an address. When you know where the business is, you can contact the secretary of state in the correct state for more information.  

Periodic Report Filings

Most states mandate that an LLC files a periodic report with the Secretary of 

State, typically annually or bi-annually, or within a certain time frame if the LLC changes any of its information such as ownership, management or address.  These reports will also let you know if the company is member-managed or manager-managed.
 

These reports on an LLC or a corporation includes:
 

  • The exact name

  • The date of formation or registration

  • The registered agent's name

  • The registered office's address
     

They may also include (depending on the state):

  • The name and address of the members and/or managers and officers

  • The business purpose of the LLC

 

If an LLC does not file these reports by the deadlines of the state they are incorporated in, they could lose their good standing and be suspended.

Certificates of Good Standing

A Certificate of Good Standing (or other state equivalent) shows that a business has submitted all the required reports and paid all the taxes and fees due to the state's secretary of state office.
 

Certificates for an LLC or corporation can be requested for a fee from the Secretary of State, usually by filling out a form online.
 

Most lenders ask for proof of good standing to approve your business for financing. Getting a certificate for your business before you apply for a loan is a good idea.
 

You might also need a Certificate of Good Standing in order to file for an out-of-state registration to do business in other states. Some states require that the certificate is not older than 90 days when applying to transact business there. 

How to Search for a Company

You can search the corporation or LLC database by name or file number to see all filings made by an LLC or corporation, or to obtain a Certificate of Good Standing on a business. 

Request to See an Operating Agreement

An operating agreement spells out in detail the internal governance and operation of an LLC. However, they are only legally required in five states:
 

  • California

  • Delaware

  • Maine

  • Missouri

  • New York

 

You can request to see an operating agreement directly from the LLC, but it is not a public record in the way that, for example, a certificate of formation or other mandated filings could be, so it is not available through the Secretary of State website.
 

Operating agreements are still considered best practices, even if they are not legally required. They demonstrate a business's clear, organized, and legal structure.

Review Business Licenses and Permits

Depending on its nature and location, LLCs often need licenses or permits to conduct business.
 

These include:
 

  • Business licenses

  • Health permits

  • Zoning permit

  • Sales permits

  • Labor and Employment Commissions

  • Regulatory or Professional Associations
     

Verify licenses and permits through local government websites or contact relevant regulatory agencies.

Verify the EIN (Employer Identification Number)

Another way to check an LLC's legitimacy is with its EIN. 


The IRS issues these to businesses in the United States for tax purposes, and they also act as a unique identifier for the LLC.
 

There are a few different ways to find an EIN for another business:
 

Check for Online Presence and Reviews

A company's online presence and reviews can indicate its legitimacy, although this isn't foolproof.
 

However, a website lends credibility and should list the LLC’s services and contact information.  It also may show the actual name of the business if they are using a trade name or DBA.  A good tactic is to look at the terms and conditions or privacy policy and search for the actual company name before searching on the Secretary of State websites.
 

You can also check the LLC's ratings on Google, Yelp, and the Better Business Bureau to see what other customers or businesses say about it.
 

Look for trends in negative reviews that could point to a larger problem. Other potential red flags include a lack of an online presence and numerous unresolved complaints.

The Better Business Bureau

The Better Business Bureau's online database rates businesses from A+ to F, which can help you determine whether a company is in good standing.
 

On the BBB, ratings are based on a company's age and the number of consumer complaints filed against it.
 

The database provides the location and names of companies' owners or managers, and alternative names for businesses.
 

Make sure to visit the BBB search engine for more information.


 

Naming an LLC

 

Although we have primarily discussed how to check if an LLC is legitimate in the context of protecting yourself before doing business with it, this is also relevant when you're creating a business.
 

If you're forming a business and have a business name in mind, you should also check if there is already a registered LLC or corporation with that name. This is important because your name must be easily distinguishable from other corporation or LLC names.
 

When naming an LLC, you can use the same corporation or LLC database to find out if a name for your new company is available. If the name is available and not registered, you won't find any records during your search.
 

You can also call or send a request to the Secretary of State to see if a name is available and to reserve a name before you register. 


 

Get Help with Checking LLC Status

 

Keeping your business in good standing helps preserve its limited liability status, protecting your personal assets in lawsuits.
 

Conversely, if you are considering doing business with a company, don't hesitate to follow the LLC verification process to get the necessary information.
 

Your search can tell you whether a company is in good standing and legally able to enter into contracts and warn you of any potential red flags before you proceed.
 

Fortunately, knowing where your business or someone else's stands is relatively straightforward because most states have search engines for checking a business's status.
 

If you need help with LLC verification, post your legal needs on UpCounsel's marketplace to find a top attorney in your state.


UpCounsel accepts only the top 5% of LLC lawyers on 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.