State of Maryland Certificate of Good Standing: Everything You Need to Know
A state of Maryland certificate of good standing is officially known as a Certificate of Status. It's a document showing that your business not only has authorization to conduct business in Maryland but also that your taxes, reports, and fees are all up to date.3 min read
A state of Maryland certificate of good standing is officially known as a Certificate of Status. It's a document showing that your business not only has authorization to conduct business in Maryland but also that your taxes, reports, and fees are all up to date.
In most states, a certificate of good standing is formal proof that a company is authorized to do business there. There are several uses for this certificate, and they're most often required for certain business transactions or during foreign qualification. While the certificate's purpose sounds simple, it proves your entity is legitimate and may also provide important business benefits for your company.
Maryland Certificate of Status
When a business owner wants to form a business in a state other than the one the company is already registered in, this is known as a foreign entity. This process is called foreign qualification. Most states want to see the business's certificate of good standing, or an equivalent document, for this to take place.
Businesses that have intentions of expanding abroad may also need these certificates, which will then be certified for foreign use, with either Apostille or Embassy Certification.
A business that's registered in Maryland and in good standing can obtain a Certificate of Status. It can get its certificate from the Department of Assessments and Taxation.
It usually takes between one business day and two weeks to process orders, depending on the method of ordering. You may order in person, by mail, or online, with online being the recommended method.
The fee for online ordering is $40, and the processing time is immediate. If you order your certificate in another way, processing times can take up to seven days, not counting additional time for mailing. The fee for this is $20. You can pay $20 more to expedite processing, which cuts processing time to about three days, plus additional mailing time.
How to File for a Certificate of Status
Choose one of the following options to obtain your certificate.
- Online: Visit the Department of Assessments and Taxation website. Follow the instructions to search and print a certificate. You'll be able to authenticate, view, and print your certificate immediately. Be prepared to pay by credit card.
- By mail: You'll provide your business name and address. Include your return address, specific request, phone number (if the office has any questions), and payment.
- In person: If you order in person, this is considered expedited processing. You can usually receive your documents the same day. Make sure you have appropriate payment ready, but credit cards aren't accepted for in-person orders.
Reasons for Keeping Your Business in Good Standing
There are a few reasons you want to ensure your company is in good standing.
A lot of lenders require business owners to show proof of good standing before they'll approve financing. It's better to have a certificate ahead of time instead of scrambling at the last minute to obtain one while also going through loan negotiations.
Many states require you to have a certificate of good standing before allowing you to register to do business in their jurisdiction. In addition, some states require to obtain your certificate within a certain window, such as 90 days or so, before filing.
Avoiding fees and penalties
Some states impose fees on businesses that aren't in compliance with state guidelines, so it makes sense to obtain your certificate to avoid paying costly penalties. You also want to keep your business in compliance to maintain your limited liability protection, since some states may revoke this protection for companies that aren't in good standing. Plus, a business that isn't in compliance could be dissolved by the state altogether.
Each state has its own requirements for staying in compliance. If your business is registered in jurisdictions outside of your home state, it's important to know what the requirements are. Not having a certificate of good standing can cost you, legally and financially. It can be costly now and in the future, in regard to lost opportunities. Because obtaining this certificate is simple and usually inexpensive, it's an easy, affordable way to follow state guidelines for operating a business.
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