Obtaining a Certificate of Compliance in Virginia

After choosing a name and registering your business, you’re well on your way. But of course, this is still just the beginning of the process. Taking your new business to its best potential will be a long journey. It’s important to keep your business compliant with applicable state laws along the way.

Staying in “good standing” with state laws is a prerequisite to many of the services your business will need to operate. As a result, it’s critically important to understand how you can stay compliant and what you need to do to prove it. That’s where a Certificate of Good Standing comes in.

What is a Virginia Certificate of Good Standing (CGS)?

A Virginia Certificate of Good Standing, sometimes shortened to CGS or COGS, is a legal document that provides proof of a business entity’s existence. More importantly, however, a Certificate of Good Standing serves as evidence that the Commonwealth of Virginia authorized your business to operate within the state and that it’s in compliance with state law.

In Virginia, the Certificate of Good Standing has a slightly different name depending on which entity type it refers to. Corporations receive a “Certificate of Good Standing” while limited liability companies (LLCs) receive a “Certificate of Fact of Existence/Registration.”

The State Corporation Commission for the Commonwealth of Virginia (SCC) issues Virginia Certificates of Good Standing. If a business applies for a Certificate of Good Standing but isn’t wholly compliant with applicable laws, the SCC will deny the application. If you’re at all worried about keeping your business compliant, ZenBusiness offers Worry Free Compliance services to help businesses thrive.

What does a Certificate of Good Standing confirm?

In general, a Certificate of Good Standing shows the requesting party that your business is:

• A real, registered business authorized to conduct business in Virginia
• Paid in full for any franchise or other taxes it may owe
• Up to date with the filing of any annual reports required by the state

If you’ve ever seen a Certificate of Good Standing, you might wonder how it could be useful; after all, many states’ Certificates of Good Standing contain very little information on them. In Virginia, for example, the Certificate of Good Standing typically includes just three things:

• The name, entity type, and state of incorporation of your business
• The date on which your business was registered with the state
• A brief statement that the business is “in good standing” as of the date the certificate was issued

This is because rather than list all the ways your business is compliant, a Certificate of Good Standing is more like a seal of approval from the State Corporations Commission. If they discover any relevant issues with your business, the SCC wouldn’t issue the certificate in the first place. Accordingly, the mere fact that you have a certificate proves that your business is compliant.

Why might a business need a Virginia Certificate of Good Standing?

Certificates of Good Standing are generally not mandatory. However, they may be required to obtain useful services for your businesses. These may include:

• Registering to do business in another state as a “foreign” entity
• Securing funding, such as with a business loan
• Opening a business bank account
• Obtaining business insurance
• Entering into contracts with other businesses or state entities
• Conducting a sale of all or part of the business
• Renewing permits and licenses that apply to your business or industry

Notice the trend in these common scenarios where you need a Virginia Certificate of Good Standing? They each involve another party. When entering into a contract or providing a business loan, for example, the other party or the bank will want to make sure your business is what you say it is. Getting a Certificate of Good Standing is one of the best ways to do that and helps the businesses you work with conduct their due diligence.

What Virginia businesses can get a Certificate of Good Standing?

Virginia provides Certificates of Good Standing for corporations and their equivalent — a Certificate of Fact of Existence/Registration — for LLCs and limited partnerships.

Only businesses required to register with the State of Virginia can obtain a Certificate of Good Standing. Virginia requires the following business types to register as soon as they starting “conducting business” within the state:

• Stock, nonstock, or professional corporations
• Standard and professional limited liability companies
• Business trusts
• Limited and general partnerships
• Registered limited liability partnerships

Sole proprietorships don’t have to register with the State Corporation Commission but may need to obtain other licenses depending on their industry.

How to Get a Virginia Certificate of Good Standing

The Virginia State Corporation Commission makes it easy for businesses to obtain their Certificate of Good Standing. However, it’s a good idea to follow a few basic steps before requesting one.

Step 1: Confirm that your business is in compliance

Before making a request for a Virginia CGS, confirm that your business is compliant. If it isn’t, the request will be denied and you won’t get your certificate.

Step 2: Confirm that the certificate is valid for the intended use

Even if you’ve already worked out the details with the requesting party, it can be helpful to double-check that the certificate you’re applying for will be valid for its intended use. Typically, the validity of the certificate depends on the state where it will be used, the state of formation of the business entity, or the entity type.

Step 3: Request the certificate

The SCC offers Certificates of Good Standing and Certificates of Fact of Existence/Registration through the Clerk’s Information System (CIS). Because of how easy it is to use, many businesses obtain a digital certificate through CIS. However, you can still request a paper hard copy by mail if necessary.

Obtaining a Virginia CGS Online

Once you’ve logged into the CIS, the process is relatively easy: simply find your business using the Entity Name or Entity ID, select your business, and add the certificate to your shopping cart. Payment can be made by credit card, personal check, or business check. After completing payment, you will have access to your Certificate of Good Standing within minutes.

Obtaining a Virginia CGS by Mail

Alternatively, you can obtain a paper copy of your Virginia Certificate of Good Standing by making a written request to the Clerk’s Office. This written request can be mailed to the Clerk’s Office of the State Corporation Commission, or hand-delivered to their office in Richmond. Check the SCC’s website for the most up to date addresses and other information.

The state charges a fee for the certificate regardless of whether you obtain a paper copy or a downloadable copy through CIS.

Step 4: Send the certificate to the requesting party

Once you have the certificate, you can send it to whoever requested it. If you ordered the certificate online, it should be available shortly after the transaction is complete.

ZenBusiness can you help you take your business to the next level

At ZenBusiness, our mission is to make it as easy as possible to start and grow your business. That’s why one of the key features of our services is eliminating as much red tape as we can. With ZenBusiness Worry Free Compliance, we’ll help you keep your business on top of important deadlines, allowing you to focus on what’s important. And, if you need a Certificate of Good Standing, we have a service to help you obtain it.