Business License Documents FAQs and SoS Info

What Is a Certificate of Good Standing?

A Certificate of Good Standing, Letter of Good Standing, Certificate of Status and Certificate of Legal Existence are all names of documents that have the same meaning. They show that an entity is in compliance, or “good standing,” with the state it does business in.

A certificate of good standing verifies that a corporation or LLC was formed legally, has been properly maintained and is still active. It should not be confused with a certificate of tax status or tax compliance, which shows that an entity is up to date on all its state tax filings and payments.

Who Is Eligible for a Letter of Good Standing?

In most states, registered business entities such as corporations, partnerships, LLCs and limited liability partnerships (LLPs) are eligible to request a certificate of good standing. Before requesting a certificate, businesses should be up to date on their annual reports and fees and registered agent designation.

Businesses that operate as a sole proprietorship or general partnership are unincorporated. Because they’re not registered with the state, they can’t get a certificate of good standing.

When Do Owners Need a Certificate of Good Standing?

For the purposes of daily business, owners do not need to worry about having a letter of good standing on hand. But there will likely come a time during the life of an entity when it will be necessary to procure a certificate. Common reasons you might need a certificate of good standing include:

• Opening a business bank account Applying for business loans
• Soliciting funds from potential investors Registering to do business in a different state Contracting with another company Transferring or selling a business

Are certificates of good standing required to operate a business?

A certificate of good standing is not required to operate a business. But a letter of good standing may be required for taking certain actions, such as selling your business, applying for a loan or establishing credentials.

How long are certificates of good standing valid?

This depends on the state where the business is located, but most letters of good standing are valid for 60-90 days. Check with your state to confirm how long your certificate is valid.

Is it important to maintain a good standing?

Maintaining good standing is incredibly important to a business, even if you won’t need a certificate anytime soon. Remaining in compliance helps preserve your limited liability and ensures you won’t be fined by the state.

Do all businesses need a certificate of good standing?

No, not all business need to have a certificate of good standing, The rules vary by state but, in many of them, LLCS, partnerships, LPs, LLPs and limited liability limited partnerships (LLLPs) all need to have them. However, sole proprietorships do not.

What Is an article of organization?

Known by different names in different states, such as a certificate of formation or certificate or organization, an article of organization is a document specific to LLCs that outlines the initial statements necessary for forming an LLC in most U.S. states. This document, which usually must be filed with your state’s Secretary of State, must include essential information like your business name and address, the purpose of your business, how the business will be managed, contact information for the LLC’s registered agent and, if known, the expected duration of the LLC.

How To Get a Certificate of Good Standing in Your State

Each state, plus Washington, D.C., has its own rules and processes regarding how business owners obtain documentation; in most cases information can be found online through the individual Secretary of State websites or mailing requests.

If you have any further questions, please contact the NASTF support team at support.nastf.org.

Related links:

Business License

Certificate of Insurance