Obtaining a Certificate of Compliance in Alabama

As business entities grow or dabble in other areas of industry, they sometimes have to provide proof of their official designation and standing with the state. The document that helps achieve this in Alabama is a Certificate of Compliance (COC), more commonly known as a Certificate of Good Standing (CGS).

What is an Alabama Certificate of Compliance (COC)?

An Alabama Certificate of Compliance is a legal document that provides proof of existence for a business entity as well as a show of authorization for conducting business in the state. In other words, a COC proves a company is in compliance with state regulations.

The Alabama Department of Revenue is responsible for issuing Certificates of Compliance.

The process of filing for and obtaining a COC may be complicated for some entities. ZenBusiness’s Certificate of Good Standing service can help with this endeavor, making sure all pertinent paperwork has been properly submitted to obtain a COC for the business in question.

What does an Alabama Certificate of Compliance confirm?

A Certificate of Compliance confirms the legal existence of a business in Alabama. The document provides proof of the company name and corporate structure. It shows that your entity has followed all state requirements for business registrations to date and is current on any fees associated with the establishment and maintenance of your entity.

Alabama Certificate of Compliance Specifics

The information found on an Alabama Certificate of Compliance includes the following:

• The Alabama Secretary of State’s name and address
• A note stating the authority of the Secretary of State to issue such a decree
• The name of your business entity
• The date the designation is being made
• A line noting that the official state records do not disclose the cancellation or termination of the business registration
• The Alabama state seal
• The date and signature of the Alabama Secretary of State

The official nature of this certificate is one of the reasons that it generally suffices when entities are asked to provide proof of existence and standing with the state. Depending on whom the document is being submitted to, the COC should be proof enough.

What Alabama entities can obtain a COC?

Businesses that have officially registered with the state of Alabama may apply for and receive a Certificate of Compliance. This is any Alabama business operating in the state either through formation or foreign registration. Companies that generate any form of profit subject to state sales tax are also eligible as these entities should be officially registered with the state.

This means that companies registered as Alabama LLCs, nonprofits, corporations, and all other properly registered business entities are eligible to apply for a Certificate of Compliance.

Entities that aren’t required to register as businesses with the state include sole proprietorships, consisting of individuals doing business under their personal Social Security numbers. These individuals would not be eligible for a COC because they’re not designated as official business entities with the state.

Why might a business need an Alabama Certificate of Compliance?

There are several key reasons a business might find an Alabama Certificate of Compliance useful or necessary. They include:

• Registration to do business in another state or region
• Sale or transfer of the entity
• Establishing a business bank account
• Soliciting other business or state contracts for the business
• Obtaining a company insurance policy
• Applying for additional licenses or permits
• Obtaining capital for your business

There may be other situations that require the use of an Alabama Certificate of Compliance. As such, your entity may want to apply for a certificate to have on hand. If you opt to do so, however, keep in mind that some entities require a COC signed and dated within 60 days of submission.

How to get an Alabama Certificate of Compliance

The Alabama Department of Revenue administers the Certificate of Compliance process via its Business Services website.

Start by making sure your business is compliant with the state

If you plan to obtain an Alabama Certificate of Compliance, start by making sure that your business is in compliance with the state. Check with the Alabama Department of Revenue to ensure no outstanding fees are owed, and check your annual reports and any additional documentation to show your business is up to date on all administrative elements.

The more thorough you are in the initial check of your administrative files, the less likely it is that you’ll experience delays when submitting your application.

Go online to request an Alabama Certificate of Compliance

The online application can be found on the Alabama Department of Revenue site. It takes approximately three to five days to process, but processing time will vary based on volume. You can use the searchable feature via the Alabama Secretary of State website to bring up your business record and then move forward from there.

Double-check the validity of its use

There are many reasons why your entity may need an Alabama Certificate of Compliance. In some instances, the COC must be accompanied by other documents supporting the existence and viability of your enterprise. For example, if you’re setting up shop in another state, you may also need to provide additional documentation supporting the financial viability of your business as well.

In addition, most requesting parties will require a current COC, so pay attention to the date your COC is issued. Most recipients require a COC or other certificate of good standing to be no older than 60 – 120 days past issue.

Submit the COC

The last step in this process is the submission of your Alabama Certificate of Compliance to the party that has requested it.

Before submitting the document to the entity that has requested it, make a copy to keep in your records. Even if you ultimately print multiple documents as your entity grows, it’s prudent to keep a copy of each one you print and submit for recordkeeping purposes. Retain this information with other important business documents, such as your operating agreement or Articles of Incorporation.