What is a certificate of good standing?
What does the certificate actually say?
Texas describes its certificate of fact - status as official evidence of an entity's existence or authority to transact business in Texas, and says it gives the entity's current legal name, date of formation and a statement of the entity's status. California's order form says its certificate of status lists the entity status, which may read good standing, active or suspended. The document can come back saying something you would rather it did not.
Colorado is blunt about the limits. Good standing there means statutory filing requirements have been met with the Secretary of State's office, and that office says it does not review or verify the information submitted in those filings and does not regulate or investigate business practices. The certificate proves your paperwork is current with one agency. It proves nothing about the business itself.
What is it called in your state?
Ask for the name your state uses, not the name the bank used. Texas issues a certificate of fact - status, and says a certificate of status is often required when qualifying or registering to do business in other jurisdictions. Florida, California and New York issue a certificate of status. Delaware and Colorado issue a certificate of good standing. Alabama and Georgia issue a certificate of existence. Wyoming's fee schedule puts all three names on one line, certificate of existence, evidence or good standing, because they are the same piece of paper.
The office differs too. It is the Secretary of State in most states, the Department of State in New York and Pennsylvania, and the Division of Corporations in Florida and Delaware. Good standing by state has the name, the office and the fee for each one.
Is a tax clearance letter the same thing?
No, and in some states the two come from different agencies. Alabama's Secretary of State issues the certificate of existence, and its own application form says plainly that this is not a certificate of compliance, the good standing document issued by the Alabama Department of Revenue. A lender asking an Alabama company for tax good standing is asking about the Department of Revenue's document, not the Secretary of State's.
So read the request before you order. If it talks about taxes, the revenue department is usually the office that has it. If it talks about the company's registration, existence or status, the business filing office is the one.
When do you actually need one?
The usual reason is registering in a second state. The SBA says many states require a certificate of good standing from your state of formation, and Delaware's statute wants a certificate from the jurisdiction of formation evidencing the company's existence as of a date not earlier than 6 months before the filing date. That is the one hard age limit here, so order the certificate close to the day you file rather than months ahead. Registering in another state covers the rest of that filing.
Banks, lenders and buyers ask for one as well, and they set their own age limit instead of following a statute. Nothing on the certificate expires on its own, because it states the company's status as of the day it was issued.
What does one cost?
Colorado charges nothing. Its Secretary of State offers the official version on its website free, and warns that third parties solicit people to pay for the same document. Wyoming issues the electronic certificate at no cost too, and charges $20 for a paper one. California charges $5 for any entity. Florida charges $5 for a limited liability company and $8.75 for a corporation. Texas charges $15 per certificate. Alabama charges a $25 processing fee for the Secretary of State's certificate of existence, and that one is mailed in.
Delaware is the expensive end. Its statute sets $50 for a certificate of good standing, $175 for the long certificate that recites all of a company's filings, and up to $175 for any certificate issued through the state's online services. Fees by state lists the rest.
What if the state will not issue one?
Then something is unfiled or unpaid, and the refused certificate is only the symptom. Colorado says that if the status of the entity is anything other than good standing, a certificate cannot be issued.
Work backwards from what the state is missing. A late annual report is the usual cause, and annual reports by state has each state's due date and fee. A resigned or missing registered agent will do it, and so will an unpaid franchise tax. Once the state records the filing, the certificate can be ordered the same way as before. If the state has already dissolved or revoked the company, reinstatement comes first, and we can file that for you.
Questions
Is a certificate of existence the same as a certificate of good standing?
Usually yes, under a different name. Alabama and Georgia issue a certificate of existence where Delaware and Colorado issue a certificate of good standing, and Wyoming's fee schedule lists existence, evidence and good standing as one item. Alabama is the exception to know: its Secretary of State's certificate of existence is not the certificate of compliance the Department of Revenue issues for taxes.
Can I check my company's good standing for free?
Usually yes. California's free business search shows an entity's status, Florida has a check certificate of status page, and Delaware has a check entity status tool. Those tell you whether a certificate would be issued today. They are not the certificate itself, so a bank or another state will still want the issued one.
How long does a certificate of good standing take?
Minutes, where the state issues it online. Colorado opens the certificate as a PDF from the entity's summary page, Florida emails the PDF once the payment processes, and Texas says an online order may take up to 10 minutes to become available. Alabama's certificate of existence is requested on a mailed form, so allow for the post.
Does a certificate of good standing expire?
Nothing on it expires, because it states the company's status as of the day it was issued. Whoever asked for it sets the limit instead. Delaware's statute is the strict case: a foreign registration there needs a certificate dated not earlier than 6 months before the filing date.
Do I need a certificate of good standing to form an LLC?
No. The certificate is about a company that already exists, so a new LLC has nothing to certify yet. You order one later, when a bank, a buyer or a second state asks for proof that the company is registered and current.
$0 + state and processing fees. Takes seconds.
Sources
- Texas Secretary of State: ordering copies and certificates
- Colorado Secretary of State: certificate of good standing FAQ
- Alabama Secretary of State: application for certificate of existence
- California Secretary of State: business entity records requests
- Florida Division of Corporations: fees
- Wyoming Secretary of State: business division fee schedule
- Delaware LLC Act, section 18-1105
- Delaware LLC Act, sections 18-901 to 18-907
- SBA: Register your business