Authorized to do business
A Certificate of Good Standing, sometimes called
a Certificate of Existence or Certificate of Authorization, is a state-issued
document used to demonstrate that a corporation or limited liability company (LLC) exists or is authorized to do business in the state and has complied with
all state-required formalities.
Why it’s important
A Certificate of Good
Standing is typically required when a company wishes to register to transact
business in another state (a process called foreign qualification) and may also be required before a
company can enter certain contracts or relationships. The Certificate of Good Standing
sets forth:
- Your company’s name
- That your company is incorporated and authorized to do
business in that state
- That all fees, taxes and/or any applicable penalties owed
the state have been paid
- That the company’s
most recent annual report has been filed
- That Articles of Dissolution have not been filed
Keep in Mind
If your company is not in good standing with the state when a Certificate of Good Standing is requested, the state will often return a document stating that your company is in existence but is in “bad standing,” which can have a negative impact on your business.
Business Compliance Requirements & Consequences