What is a certificate of good standing?

A certificate of good standing certifies that a company is properly registered with the state, is up to date on all state registration fees and required document filings, and is legally permitted to engage in business activities in the state. In some states, it is called a certificate of status or certificate of existence. 

A certificate of good standing typically has an expiration date, which is usually when the registration is due to be renewed, or when periodic documents or registration fees are due. This could be at the end of a calendar year, or at some other time during the year when the state's laws require renewal or periodic filings.

An entity that was originally formed in the state can be issued a certificate of good standing, as can an entity that was formed elsewhere and is registered in the state as a foreign entity.

But a certificate of good standing is not like a business or occupational license, which must be obtained in order to legally conduct business. A company can legally conduct business in a state where it is registered without obtaining a certificate of good standing.

Who can get a certificate of good standing

Since not all types of business entities are required to register with the state, not all types of entities will be able to get a certificate of good standing.

If you are operating your business as a sole proprietorship, you will not be required to register in any state, and you will not need to be concerned about a certificate of good standing. On the other hand, all states require registration of corporations and limited liability companies (LLCs).

Various other types of business entities must be registered in some states, but not in others. This includes partnerships, limited partnerships, limited liability partnerships (LLPs), and limited liability limited partnerships (LLLPs). If your business is organized as one of these entities, your state's laws will determine whether registration is required.

Where to get a certificate of good standing

The state agency where your business is registered will issue a certificate of good standing. In most states, this is the secretary of state, or one of its subdivisions. The agency has a different name in the following states:

• Alaska: Department of Commerce, Community, and Economic Development
• Arizona: Arizona Corporation Commission
• Delaware: Division of Corporations
• Hawaii: Business Registration Division, Department of Commerce and Consumer Affairs
• Maryland: Department of Assessments and Taxation
• Massachusetts: Corporations Division, Secretary of the Commonwealth of Massachusetts
• Michigan: Corporations Division, Department of Licensing and Regulatory Affairs
• New Jersey: Division of Revenue and Enterprise Services, Department of the Treasury
• Utah: Division of Corporations and Commercial Code, Utah Department of Commerce
• Virginia: State Corporation Commission
• Wisconsin: Department of Financial Institutions

In the District of Columbia, it is the Corporations Division of the Department of Consumer and Regulatory Affairs.

Information about how to obtain a certificate of good standing, and the fee involved, will be found on the agency's website.

What's needed to get a certificate of good standing

Generally, a business only needs a certificate of good standing when it is asked for one. You will probably only be asked for a certificate of good standing in two situations:

1. You are asked for one by an individual or organization with whom you have some type of business relationship. This is most likely when you want to open a business bank account, set up credit or debit card processing of customer payments, or apply for credit in the name of the business.
2. You apply to register your business in another state as a foreign entity. To register a foreign entity, it is common for that state to require a certificate of good standing from the state where the company was formed.

If your business is not required to register with the state, you will not be able to obtain a certificate of good standing; however, you also will not need one. If your business is registered, you will only need a certificate of good standing when one is requested. Then, it can be obtained from the state agency where your business is registered, or, from the state agency in the state where you're doing business as a foreign entity.