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, certificate of existence, or certificate of compliance. 

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. However, the party requesting the certificate (such as a bank) may impose their own requirements (i.e., dated within the last 30 to 90 days). 

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.

Why do you need a certificate of good standing?

While you aren’t required to have a certificate of good standing readily available at all times, there are several situations where you might need to present one. Here are some examples of when your business needs a certificate of good standing. 

Business loans and finances

When you apply for business loans or financial support, lenders often ask for a certificate of good standing to prove your entity's status and legal compliance. It may also be necessary if you apply for business bank accounts, seek new investors, or need to show it as proof during a financial audit. 

Expanding into other states

If you ever relocate or expand your business entity into a different state, you’ll typically need to register as a foreign entity. Many states require a certificate of good standing with your application to confirm your business complies with your home state’s regulations.   

Contracts and partnerships

A certificate of good standing might be necessary if you enter into a significant contract or form a new business partnership. Potential partners or clients may request this document since it proves that your company is legally authorized to conduct business in your state and fulfill its contractual obligations. 

Renewing business licenses

Some jurisdictions may require a certificate of good standing when you renew certain business licenses or permits. This ensures that your business is still compliant since you originally obtained the licenses or permits, though the exact renewal requirements depend on your jurisdiction. 

Transferring or selling

If you decide to transfer ownership or sell your business, it’s common for potential buyers to request a certificate of good standing as part of their due diligence process. It can assure them that your company is free from any compliance issues, which can help facilitate a smoother transaction. 

Who can get a certificate of good standing

Typically, the following business structures can request a certificate of good standing: 

• Limited liability companies (LLCs)
• Corporations
• Limited partnerships (LPs)
• Limited liability partnerships (LLPs)

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.

For instance, if you are operating your business as a sole proprietorship or general partnership, you will not be required to register in any state, so you also won’t be able to get a certificate of good standing. On the other hand, all states require registration of corporations and limited liability companies (LLCs), so these businesses may receive a certificate of good standing.

Various 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 (SOS) or one of its subdivisions. The agency has a different name in the following states, but it’s best to confirm with your state authorities since the application procedures are subject to change. 

• 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: Department of Revenue
• 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
• District of Columbia: 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 each agency's website.

How do I get a certificate of good standing? 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 structure is not required to register with the state (such as sole proprietorships), 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.

In order to get a certificate of good standing, you’ll first need to identify the relevant state government agency that issues them. This is usually your state’s SOS office or a subdivision, as previously discussed. 

Next, you can follow these steps to request a certificate. 

1. Ensure compliance

Before you apply for a certificate of good standing, you want to verify that your business is, in fact, fully compliant with state regulations. This may include these tasks: 

• File all required annual reports or statements
• Pay any outstanding taxes, fees, or penalties 
• Maintain a registered agent (also known as a statutory agent) in the state where your business resides
• Keep your business information up to date with the relevant state authorities
• Renew any necessary licenses or permits as needed

Take the time to review your business’ status and address any compliance issues before proceeding. If you’re unsure of how to proceed or have any questions about maintaining good standing, you might reach out to your state's office or a business attorney for assistance. 

2. Submit an application

When you’re ready to request your certificate, you can follow these steps next: 

• Gather necessary information. You’ll typically need to provide your business name and registration number (along with any other information or proof required by your state). 
• Choose your application method. Your state may allow you to apply online, by sending a written request, or in person. Be sure to consider the processing time for the certificate, not to mention additional waiting time if you apply by mail. 
• Pay the required fee. Fees vary by jurisdiction and can range from $0 to $50 or more, which you’ll typically pay upfront. 

Some states may require additional information or have unique procedures, so double-check with your state’s official website for the most up-to-date requirements. Better yet—if you’d rather not handle the process yourself—our team at LegalZoom can request the certificate of good standing on your behalf and send it to you once it’s ready. 

3. Wait to receive your certificate

After submitting your application, you’ll wait for your certificate to be processed and delivered. In some states, you may receive your certificate immediately or shortly after submitting it, while in others, it may take a few business days to several weeks. If you need your certificate quickly, you might be able to request expedited processing for an additional fee. 

FAQs

How much does it cost to get a certificate of good standing?

The cost of a certificate of good standing varies by state, typically ranging from $0 to $50. The cost also depends on the application method, whether by mail, online, or in-person, so it’s best to check with your state for official pricing. 

What information is included in a certificate of good standing?

A certificate of good standing typically includes your business name, entity type, and confirmation that your business is authorized to operate. It may also state that you’ve filed required reports, paid necessary fees and taxes, and have no pending disputes or issues. 

How long is a certificate of good standing valid?

A certificate of good standing is usually valid until your next required filing or fee payment, which could be at the end of the calendar year or another date set by state law.  However, the party requesting the certificate might ask for a more recent copy, often issued within the last 90 days.  

Is a certificate of good standing state or federal? 

A certificate of good standing is generally issued at the state level, not federal. Still, each state has its own process for issuing these certificates through its Secretary of State (SOS) office or similar agency. If you operate in multiple states, you may also need certificates from each relevant state. 

Do I need my articles of organization to get a certificate of good standing? 

No, you don’t typically need to provide articles or organization when you apply for a certificate of good standing. However, there might be some details in the articles that you’ll need for your application, so having it on hand can be helpful.

 Edward A. Haman, Esq., contributed to this article.