To run a reputable business, you must adhere to business standards and essential laws. A company can easily have these merits through a good standing certificate. Some cases will require a copy of this certificate which you’ll come across as you read through.
This certificate is obtainable for an LLC company, cooperation, etc.
What is a certificate of good standing?
A good standing certificate gives you full permission to do business in a state. It shows that you’re an authorized dealer in your industry. The certification proves that your business is operated according to regulations and adheres to paying state fees, taxes, business filings, and more.
The certificate can be used to get a loan, business account, credit card, and more. Most lenders feel secure when you present a good standing certificate of your business.
Quick Tips to Obtain a Good Standing Certificate
If you intend to get a certificate of good standing, here are some ways to circumvent the process.
Verify That You Need a Certificate of Good Standing
It’s not mandatory for a business to have a certificate of good standing but only when necessary. A sole proprietor will not need to register their interaction with the state except corporations or LLC. Companies under the LLC category are expected to register their interaction with the residential state. Both parties will need the certificate in some crucial situations like:
- Getting or renewing the business license
- Obtaining insurance
- Getting a business loan
- Transferring or opening an outlet in another state
- Getting a government loan or contract
- Registering business credit or debit cards in the new system
You can choose to or not have the certificate of good standing if you plan on not involving any of these plans in your business. Since the certificate has an expiring date, it’s best to apply for a good standing certificate only when needed.
2. Register your business
If you intend to register your business, you must reside legally with the state. The document required to get the certificate of good standing in each state varies. Certificate of good place in some states can also be referred to:
- Good standing certificateÂ
- Letter of good standingÂ
- Certificate of existence
- Certificate of status
- Certificate of authorization
- Certificate of authentication
You can only be requested to submit a certificate of good standing in some rare scenarios. You can register your business via the Secretary of State office. Here are quick ways to secure the process.
- Choose a business structure and name.
- Submit a proposal with your business documents, such as a letter of incorporation
- Pay all charges
- The IRS office will issue you an Employer Identification Number (EIN)
- Get a license or permit
- Get state and local tax information
If you’re registering your business in another state, the state may request a certificate of good standing from your business’s residing state. If approved, you’ll be issued a foreign qualification.
3. Research the Fastest Way to Get a Certificate of Good Standing
It would help if you were prepared beforehand to avoid scrambling around when a certificate of good standing is required. Do your research and have a reliable office where you can easily apply for a good standing certificate when needed. States have different procedures for getting a certificate, but most are paperwork. Companies can use the certificate for licensing, annual reports, foreign qualifications, and offering registered agent services.
4. Use Software to Stay Organized
A good standing certificate is only issued to business owners that abide by the state’s laws. A business needs to comply with the scrutiny of the authorized body offering this certificate. Your business needs to pay mandatory taxes, file a report, and manage things with the board. This can be tedious for a business to run, which explains why software will be preferable. The software will keep all these tasks in check, reducing the burden on your shoulders.
5. Make sure your business satisfies the other requirements
This certificate can only be issued to your company if it’s of good standards. These requirements come differently according to states, but generally, your business will have:
- To be up-to-date on taxes and fees payments
- All annual reports of your business should be updated
If the registration is approved, you can check online for your business status through your state’s business registration agency.
6. Request your certificate from the state
If your business is qualified, you can head to the state Secretary’s office or other authorized offices to get your certificate. You will get the requested document at the office, which you’ll need to file after double-checking your business standing.
You can also get this document online, by mail, phone, or fax. If you’re too careful, you can request the assistance of a service agent. When ordering the document, you might be asked to pay a filing fee which varies according to state. For example, the paper costs about $25 in NY and $11.50 in Idaho.
7. Request certificate valid for your specific use
It’s a worry as many states’ good standing certificates have an expiring date. The expiring date is based on the issuing state and purpose for obtaining a certificate.
Photo by Yan Krukov from Pexels
Conclusion
A good standing certificate is vital for a business’s reputation and partnership. Having one will save you confusion when it is requested.