Being a business owner is challenging; in addition to managing day-to-day operations, it can be challenging to navigate the legal aspects of running a corporation. States have distinct laws, and in order for businesses to function legally and profitably, they must have the appropriate paperwork and certifications. For instance, if you are running a business in New York, you must have New York Certificate of Good Standing.
A Certificate of Good Standing, also known as a Certificate of Existence or Certificate of Authorization, is one of the key elements of running company legally.
This blog post defines a Certificate of Good Standing, describe how to obtain one, and discuss what it implies for your company and other parties interested in doing business with you.
What is a Certificate of Good Standing?
A state’s government can certify that a company is legitimate to conduct business in that state by issuing a Certificate of Good Standing, which is a legal document. Additionally, it serves as confirmation and assurance to other companies and people looking to do business with your company that your business has state certification.
Why do I need a Certificate of Good Standing for my business?
For small enterprises and limited liability companies (LLCs) wishing to submit an application for overseas qualification, a Certificate of Good Standing is typically issued. When a company wants to open a new site, move an existing location, or conduct business in another state, they need to obtain foreign certification. A Certificate of Good Standing is typically required by financial institutions before considering financing a company entity.
If your company wants to get funding, form a foreign firm in another state, open a bank account, sell the business, or organize a foreign entity, you will need a Certificate of Good Standing. It could also be necessary to demonstrate that you are now in conformity with state or federal laws after previously breaking them.
A Certificate of Good Standing: How can I obtain it?
Following the fulfillment of the following requirements, the Secretary of State will issue you with a Certificate of Good Standing:
- Your company is recognized by your state as a legal entity.
- Your business is not in default of any corporate rules
- The state has not currently suspended your operation.
- Taxes and other debts are paid in full before submitting the application.
If a company satisfies all of these requirements, it may submit an application for a Certificate of Good Standing directly to the state or, for an additional cost, through a third party.
In order to confirm a company’s legitimacy and existence, it can also be required at some stage to see if it has a Certificate of Good Standing. If the need arises, certified public search services are the best means to check the standing certificate of a business entity.
If you are planning to start your business in any state, a Certificate of Good Standing is one of the crucial documents that you need to pay attention to. Thankfully, it is pretty straightforward to obtain it.