An official state-issued document that confirms a company is legally registered, up-to-date with all required filings, and authorized to do business in that state.
What is a Certificate of Good Standing?
A Certificate of Good Standing—also known in some states as a Certificate of Status or Certificate of Existence—is an official document issued by a U.S. state authority (typically the Secretary of State) that verifies a business entity is legally registered, compliant with all state requirements, and authorized to operate in that jurisdiction.
This certificate serves as proof that the company has met all necessary legal obligations, such as filing annual reports, paying franchise taxes, and maintaining a registered agent. If a company fails to meet these obligations, it may lose its good standing status, which can lead to penalties or even administrative dissolution.
Why would a non-U.S. founder need this? While not required for day-to-day operations, a Certificate of Good Standing is often requested in specific situations. These include applying for a business loan, opening a bank account, entering contracts with large vendors, registering to do business in another state (foreign qualification), or seeking investment. It provides external parties—like banks, investors, or government agencies—reassurance that the business is properly maintained and in full legal compliance.
The document typically includes the business name, entity type, formation date, and a statement confirming that the business is in good standing as of the date of issuance. It does not guarantee that the business is financially sound or reputable—it solely confirms legal compliance and active status.
Each state has its own process and fee for obtaining a Certificate of Good Standing, and the certificate is usually valid for a limited time (often 30 to 90 days), depending on the purpose it is being used for. If a company is not in good standing, it might be because of missing a report or tax – remedying that (filing and paying) can restore good standing, but until then the state might list the company as “delinquent” or “void” (in Delaware, not paying franchise tax by a certain time can make a corporation void). A Certificate of Good Standing would not be issued in that case until issues are resolved.
In summary, a Certificate of Good Standing is an essential compliance document that validates your business’s legal status. For U.S. and international entrepreneurs, especially those expanding operations, opening accounts, or attracting partners, having this certificate readily available is a sign of credibility and responsible management.
