Other names often used for "Certificate of Good Standing"
Certificate of good standing is also known as certificate of facts, certificate of existence, certificate of status, letter of good standing.
What is the use of certificate of good standing?
Business entities use certificate of good standing to prove their existence that they are incorporated and authorized to do business in the state. The good standing status signifies an entity is current with the filing requirements of the secretary of state's office, as well as being current with the entity's corporate franchise taxes. During the financing process, banks will often require a certificate of facts from a business.
Why do I need a certificate of good standing?
As certificate of good standing or certificate of status is an official document, Businesses are in need of it in certain conditions as follow:
- opening bank account
- completing official business transactions or contracts,
- filings in a new state, such as a foreign qualification,
- selling the business.
A certificate of good standing may also be used in order to prove that a company has come back into compliance with the state of formation or qualification. However, if your company has not fixed the issues that caused it to fall out of compliance, then obtaining this document will show that your company does exist but is considered "in bad standing" with the state.
Who issues Certificates of Good Standing?
Certificates of Good Standing for corporation or LLC are issued by the Secretary of State in which the corporation or LLC is formed, or in which the corporation or LLC has qualified as a "foreign corporation."
How can I obtain certificate of good standing?
To obtain a Good Standing Certificate, your company must be registered as a legal entity in your state and cannot be in default of corporate rules or suspended by the state.
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