Certificate of Good Standing: What It Is, Why It Matters, and What to Do If You Lose It

What is a certificate of good standing?

A certificate of good standing is an official document issued by your state's business registration agency (typically the Secretary of State or similar department) that confirms your business entity is legally registered, authorized to operate in the state, and in compliance with all state requirements. 

The certificate verifies several key aspects of your business status:

• Your entity was properly formed and registered
• All required fees and taxes have been paid
• Mandatory annual reports or renewal documents have been filed
• No dissolution proceedings have been initiated

Most certificates also include your business name, formation date, registered agent information, and the current status of your entity.

Alternate names and definitions by state

Different states use various terms for this document, but they all serve the same fundamental purpose. You may encounter these alternate names depending on your state of formation:

• Certificate of status
• Certificate of account status
• Certificate of existence
• Certificate of authorization
• Letter of good standing
• Certificate of compliance

How a certificate of good standing differs from a business license

Many business owners confuse certificates of good standing with business licenses, but these serve distinctly different purposes in your business operations. A license grants you permission to operate a specific type of business or profession within a particular jurisdiction, while a certificate of good standing simply confirms that your business entity exists and remains compliant with state business requirements.

Business licenses are typically required before you can legally conduct business activities and may involve industry-specific regulations, zoning approvals, or professional qualifications. In contrast, you can legally operate your business without ever obtaining a good-standing certificate—it's simply documentation you may need for specific transactions or relationships.

The key distinction lies in their purpose: Business licenses authorize your business activities, while certificates of good standing document your entity's legal status and compliance with state requirements.

Why do businesses need a certificate of good standing?

Certificates of good standing serve as essential documentation in numerous business scenarios where third parties need verification of your company's legal status and compliance history. Here are some common use cases for certificates of good standing:

• Opening a business bank account. Financial institutions almost universally require certificates of good standing when opening business bank accounts or processing loan applications. Banks use this documentation to verify that your business is legitimate and properly maintained, reducing their risk when establishing financial relationships.
• Contract negotiations. Many organizations include good-standing requirements in their vendor qualification processes to ensure that they're contracting with compliant businesses. 
• Expanding business to a new state. You'll typically need to register as a foreign entity with the new state and provide a certificate of good standing from your formation state to prove that your business is active and compliant.
• Merger and acquisition activities. These almost always involve extensive due diligence processes that include reviewing certificates of good standing for all involved entities. Buyers want confirmation that target companies are properly maintained and free from compliance issues that could create future liabilities.
• Professional licensing boards. Many states require certificates of good standing for businesses seeking professional licenses or renewals. This is particularly common in regulated industries like healthcare, finance, and legal services, where professional entities must demonstrate ongoing compliance.
• Legal proceedings. Courts and opposing counsel may request a certificate of good standing to verify a company's legal capacity to participate in certain proceedings, like pursuing litigation or defending against claims. 

Think of a certificate of good standing as your business' "report card" from the state, showing that you've kept up with all state requirements and remain in good status with regulatory authorities.

How to get a certificate of good standing: Step-by-step

Obtaining a certificate of good standing typically involves a straightforward process through your state's business registration agency, though specific requirements and procedures vary by state. 

Keep in mind that only state-registered business entity types—like corporations, limited liability companies, limited liability partnerships, and limited partnerships—so sole proprietorships and general partnerships are excluded.

1. Identify your state's issuing agency

Most certificates of good standing are issued by the Secretary of State's office, though some states delegate this function to other agencies. For example, Arizona businesses will obtain their certificates through the Arizona Corporation Commission. Visit your state's official business registration website to locate the correct agency and its specific requirements.

2. Verify your business' current status

Check your business' status through your state's online business entity search system. If your search reveals problems, address them immediately. This typically involves filing missing annual reports, paying outstanding fees or taxes, or updating required information like registered agent details.

3. Complete the certificate application

Most states offer online applications, and some still allow written requests. You'll typically need to provide your business name and entity number and specify how many certified copies you need.

4. Pay the required fees

Certificate fees typically range from $5 to $50, depending on your state and processing options. Many states offer expedited processing for additional fees if you need the certificate quickly.

5. Receive and use your certificate

States typically offer electronic delivery, mail, or in-person pickup options. Electronic certificates are becoming increasingly common and are often accepted for most business purposes.

Certificates of good standing are typically valid until the date of your next annual filing (verify this information with your state). But keep in mind that many third parties ask for recent certified copies of certificates that are no more than 60 to 90 days old.

What causes a loss of good standing?

Most of the time, a loss of good standing results from administrative oversights rather than serious business problems, making recovery straightforward in most cases. Understanding the following common causes can help you prevent future issues and maintain continuous compliance with state requirements.

• Missed annual report filings. Also known as statements of information, these reports require basic business updates, financial performance information, filing fees, and even business taxes. Missing the deadline for an annual report doesn't immediately revoke your business registration, but it does prevent the issuance of good standing certificates.
• Unpaid state fees and taxes can quickly lead to compliance problems, particularly franchise taxes, registration fees, or industry-specific assessments. States often impose penalties and interest on late payments, making prompt resolution more expensive than timely compliance.
• Registered agent issues can cause problems when your registered agent resigns without proper notice, moves without updating their address, or fails to forward important state correspondence. Since registered agents receive official notices, communication breakdowns can lead to missed deadlines.
• Administrative errors in filed documents, such as incomplete forms, missing signatures, or incorrect information, can prevent acceptance of required filings and lead to compliance gaps.
• Loss of professional licenses. If you lose a business license that is required for operation in your state or local jurisdiction, this can cause a loss of good standing, as certain industries, professions, and business activities require an active license.

How to recover good standing status

Restoring your business’ status is fairly straightforward when you take the following steps.

1. Identify specific compliance issues

Contact your state's business registration agency or check your business’ status through the state’s business entity search portal to determine exactly what's required for restoration. Denial notices often include the outstanding requirements necessary to recover good standing.

3. File missing documents

Complete and submit any required annual reports, amendments, or other documents, like professional licenses, that caused the compliance lapse. Ensure that all information is accurate. Many states allow online filing for faster processing.

4. Pay all outstanding amounts

Calculate and submit payment for all missed fees, late-filing penalties, and interest charges. Some states require separate payments for different types of obligations, while others accept consolidated payments.

5. Request confirmation

Once you've addressed all issues, request written confirmation of your restored status. This may involve waiting for system updates before certificates can be issued.

State-specific recovery tips and timelines

The following are examples of the good-standing recovery process in certain major states:

• Maryland businesses can use the Maryland Business Express system to check compliance status and file missing reports online. The state typically processes restoration requests within 7–14 business days once all requirements are met, with expedited options available for additional fees.
• California entities may face higher penalty amounts for extended non-compliance periods. The state typically processes restoration requests within 1–2 business days.
• Delaware corporations can either submit their request for a certificate of good standing via the state’s document filing portal or by mail via a written request. There are several options for certificate timelines. However, Delaware's franchise tax calculations can be complex, potentially requiring professional assistance.
• Texas businesses can use the state's SOSDirect system for online compliance management and typically get a restored Texas certificate of good standing within a few hours or up to three business days.