Does My LLC Need a Certificate of Good Standing?

If you own a limited liability company (LLC), you may be required to provide a certificate of good standing to be able to complete certain actions with your business. While a certificate of good standing isn’t something you’ll necessarily need on a frequent or consistent basis, it’s good to know what exactly this certificate is, and what it allows your business to do.

What Is a Certificate of Good Standing?

A certificate of good standing is a simple document that provides proof from your state government that your business is registered with the state, and that you have fulfilled any legal obligations for your business entity. This means that your LLC has paid any applicable formation and maintenance fees, and is current on its annual report filings.

There are some other names for this document in some states, including a certificate of status, a letter of good standing, or a certificate of existence. In most locations though, this document is simply referred to as a certificate of good standing.

Does My LLC Need a Certificate of Good Standing?

One common business task that almost always requires a certificate of good standing is registering an LLC as a foreign LLC in a new state. While there is a small handful of states where foreign registrations can be acquired without one, most states require LLC owners to produce a certificate of good standing from their domestic state when registering as a foreign entity.

Furthermore, there may be an additional requirement dictating that the certificate of good standing needs to be recently obtained within a specified timeframe before applying for a foreign registration. Some states require a certificate of good standing that is no more than 30 days old, some give you up to a year’s grace period, and some have no time-based requirement. It’s important to check with your state to see what exactly is required before you start the foreign qualification process.

There are also some business activities that require a certificate of good standing. For example, banks will sometimes request one if you’re opening a business bank account. You might also need one if you’re setting up a credit and/or debit card payment system, or if you’re applying for a loan.

In general, you mostly need certificates of good standing in the early days of your LLC’s lifespan, or when you are expanding or moving your business.

How Can I Obtain a Certificate of Good Standing?

In most states, you can acquire a certificate of good standing from the Secretary of State’s office, or the equivalent state agency. You will likely need to pay some sort of fee as well, unless you started your business in Colorado or Wyoming, the two states that issue certificates of good standing free of charge.

There are typically several different ways to get your certificates, and depending on your state, you can probably acquire them online, in person, by mail, by fax, etc. Also, keep in mind that some states require an original certificate of good standing, while others will accept copies.

Can I Hire Someone to Acquire My Certificate of Good Standing?

If you would rather not obtain your own certificate of good standing, you can have an online business services company acquire one on your behalf.

In Conclusion

Certificates of good standing come in handy more often than you might think. They’re a vital component of registering an LLC in a foreign state, and there are also several banking activities (like opening a business bank account, applying for loans, setting up credit card processing, etc.) that often require certificates of good standing as well.

We hope this article helped you develop your understanding of when an LLC needs a certificate of good standing!