Certificate of Good Standing

Your business is finally taking off. The loan you have waited months for closes in less than 48 hours. The investor wires their funds on Monday, and the lease is ready to be signed. Then, suddenly, you get an email requesting a certificate of good standing before anything can move forward! What do you do?

What Is a Certificate of Good Standing?

A certificate of good standing is an official state document proving that your business is legally registered, has filed all required reports, and has paid its state fees. It confirms your company is authorized to conduct business and has not been suspended or dissolved. They are issued by the Secretary of State (or a similar authorized agency).

A certificate of good standing has nothing to do with a company's financial health or debt. These certificates hinge on three requirements. A company must be current with its annual reports, have paid all state fees, and have an active registered agent to qualify.

What Is It Called in Your State?

Although the certificate is generally called a certificate of good standing, the name varies in other states. In a few cases, the document itself is not identical and may be used only in specific circumstances. The chart below shows the six document name variants.

Name Variants

What Does a Certificate of Good Standing Include?

A certificate of good standing is a one-page document that contains specific information about a company that third parties rely on to verify the entity before doing business with it. Six standard items appear on every state-issued certificate, although some states do add additional fields.

Standard Items on Every Certificate

• Business Legal Identity/Name: Your business's exact legal name as it is registered with the state.
• Entity Type: Your registered entity type (corporation, LLC, LP, or other structure recorded at the time of formation).
• State-Issued ID Number: The unique identifier assigned by the state when the company was formed.
• Date of Formation: The official date the entity was registered with the state.
• Compliance Details: A formal statement that the company is active (not dissolved), has filed all required annual reports, and is up to date on state fees and franchise taxes.
• Secretary of State Seal & Signature: The issuing agency's seal and signature (usually the Secretary of State) and the exact date the certificate was issued

It is essential that the entity name listed on the certificate exactly match what appears in the transaction and formation documents, as even minor formatting or name differences can cause issues at closing.

What a Certificate of Good Standing Does and Doesn't Confirm

A certificate of good standing is often mistaken for a comprehensive seal of approval, but it has strict limitations. It does not provide a clean bill of health for the business; it only reflects compliance with the Secretary of State requirements as of the date it was issued. Things could have changed since then, and other issues may still exist.

What The Certificate CANNOT Verify

• Financial Solvency or Creditworthiness: The certificate confirms regulatory compliance, not financial stability. It is not proof that the company is profitable, has money in the bank, or has no outstanding debts or liabilities. It is possible to find a company in perfect standing that is behind on payments to creditors or carrying significant debt.
• Federal and State Tax Compliance (Beyond Franchise Taxes): A certificate of good standing does not indicate whether the company has fulfilled its federal tax obligations with the IRS. It also does not indicate whether a company is current on state income or sales taxes. In most states, franchise tax is tracked by the secretary of state, but to find any additional tax obligations, you must search with the relevant tax authority.
• Local Business Licenses, Permits, and Zoning: The certificate confirms only state-level registration. It does not verify that you hold the necessary professional, occupational, or local (city, county, industry-specific) licenses and permits required to run your specific type of business.
• Pending Litigation or Outstanding Judgments: Good standing is unrelated to lawsuits or legal disputes. A company in good standing could still have outstanding court judgments or be involved in ongoing litigation. The state does not check if your business is currently involved in lawsuits, facing judgments, or embroiled in internal ownership disputes.

Who Needs a Certificate of Good Standing and When?

You may never need a certificate of good standing for routine day-to-day operations. However, during certain business actions, you will need one when a third party explicitly requires it to verify your company's legitimacy. Banks, government agencies, and investors will want to confirm that your company is real and compliant before committing to any partnership.

Six Trigger Scenarios

• Bank Financing: You may need a certificate to open a business bank account and again when applying for loans, lines of credit, or SBA financing. Lenders demand it during the underwriting process when you apply for a business loan or line of credit.
• Foreign State Registration: If you register your business to operate in a new state as a foreign entity, the state's filing office will usually require a certificate from your home state authorizing your operations there. This is common during multi-state expansion.
• Real Estate Leases: Landlords, property managers, and vendors often request a certificate before you can sign a commercial office lease or close a large vendor contract. It is quite common in office, retail, and warehouse leases.
• Government and Vendor Contracts: During government RFP processing or vendor procurement, government agencies and large corporate buyers will request a certificate before onboarding or qualifying your bid.
• Business Acquisition: Venture capitalists and potential buyers will request a certificate confirming your business has no hidden compliance issues before entering into a deal. During M&A or asset sales, buyers and their attorneys verify good standing as part of standard due diligence.
• Investor Transactions: Angel investors and lenders who run closing checklists routinely include a current good-standing certificate as verification that your company is compliant. Some situations that apply are seed rounds and drafting term sheets.

What Causes a Business Entity to Lose Good Standing?

A business typically loses its good standing status with the state due to missed compliance obligations. The most common causes are failing to file annual reports, missing franchise tax deadlines, or neglecting to maintain an active registered agent. Although the certificate process is similar across entity types, requirements, use cases, and edge cases do differ.

LLC (Limited Liability Company)

An LLC typically loses its good standing by missing annual report deadlines, failing to pay franchise taxes or state fees, or failing to maintain a designated registered agent. A lapsed business license or industry-specific assessments can also render an entity non-compliant immediately. Operating or transacting business across state lines without properly registering (qualifying as a "foreign entity") in the new state is also how an LLC can lose its good standing.

Corporation (C-Corp and S-Corp)

A corporation usually loses its good standing status due to administrative noncompliance with state regulations. The primary causes include missed annual report filings, unpaid franchise taxes or state renewal fees, letting the registered agent lapse, or failing to report fundamental company changes, such as address or management updates.

Nonprofit Corporation

A nonprofit corporation most often loses its good standing by failing to meet state and federal compliance requirements. Common causes include missing annual reports, failing to pay franchise taxes, lacking a registered agent, or failing to file IRS Form 990s for three consecutive years.

Limited Partnership (LP) and Limited Liability Partnership (LLP)

Limited partnerships and limited liability partnerships lose good standing due to administrative compliance failures. The most common causes, similar to other entities, include missing annual or biennial report deadlines, failing to pay state franchise taxes or fees, and lacking an active registered agent.

Sole Proprietorship

Sole proprietorships do not have a formal legal standing to lose because they are not distinct legal entities from their owners and require no state registration. However, they can lose their "good standing" to operate legally if they fail to maintain local business licenses, neglect DBAs, or trigger tax issues.

Reasons a Business Loses Good Standing

You can lose your good standing quietly, without even realizing it. The state does not always send reminders about annual reports or fees. By the time a business discovers the issue, a certificate request has often already been rejected, and your reputation is soiled. Some states move faster than others toward administrative dissolution once compliance lapses.

The main reasons a business loses its good standing are:

• Missed Annual Report Filing: Most states require annual or biennial reports. Even if you miss one report, it can instantly place you “out of compliance,” and some states move quickly to administrative dissolution.
• Unpaid Franchise Taxes or State Fees: Franchise taxes, renewal fees, and late penalties accumulate silently. Even if your business remains registered, you will lose good standing if you miss any of these, and to resolve this, you must clear the balance.
• Lapsed Registered Agent: If you lose your registered agent or remove it without appointing a replacement, the state may flag your company as non-compliant.
• Administrative Dissolution: Some states proactively dissolve entities that have been out of compliance for a specified period. Reinstating a dissolved entity is a separate, more expensive process.

How to Restore Good Standing

Restoring your good standing is possible for most business entities, but the timelines and costs depend on how long the entity has been out of compliance.

• File All Overdue Annual Reports: You must file all overdue reports, starting with the first missed one.
• Pay Outstanding Fees: Pay all the outstanding state fees (annual renewals typically cost money). Pay any other outstanding franchise or state taxes to bring your balances current.
• Confirm Your Registered Agent: Ensure your registered agent information is active, on file, and correct. Even a small mistake could throw you into non-compliance. Update any incorrect or missing information.
• Wait for an Update: Once you have made all the corrections and brought your account current, you must wait for the state to review everything and update your status. Then you can request a certificate of good standing.

If the state has administratively dissolved your business, you will face a separate reinstatement process in addition to these steps and possibly additional fees.

How to Get a Certificate of Good Standing

Obtaining a certificate of good standing is a straightforward process. However, the most common delays occur when a business discovers a compliance gap only after being asked for the certificate. The six steps below cover how to get a good standing certificate.

• Confirm Your Entity is Currently in Good Standing: Before you submit your certificate request, check for overdue annual reports, outstanding fees, and your registered agent status. If you discover a compliance gap after requesting one, you will need to start over. Use EntityCheck.
• Identify the Correct State Agency
• Choose Your Filing Method
• Submit the Request with the Required Information
• Pay the Filing Fee: When requesting a certificate, you must pay the fee. Fees range from $10 to $200 depending on the state. You can request expedited processing, which costs extra. Always keep your payment confirmation receipt if the certificate is delayed,
• Receive, Verify, and Deliver: Check that the entity name on the certificate exactly matches what appears in the transaction documents. Even a comma difference can cause issues at closing. Deliver the certificate immediately before it ages past the requester's validity window (typically 30-90 days). Use EntityCheck.

For International Use: What Is an Apostille?

When a foreign counterparty (bank, investor, or partner in another country) requests a certificate of good standing, the standard state-issued certificate may not be legally recognized without an additional authorization step called an apostille. Below is a definition of an apostille, details about when it is required, and the 4-step process to obtain one.

An apostille is a government-issued certificate that authenticates the origin of a public document (such as a birth certificate, certificate of good standing, or contract) so it is legally recognized in foreign countries.

A business generally needs an apostille when expanding internationally or conducting transactions with foreign entities that are parties to the Hague Apostille Convention of 1961. Some scenarios include opening foreign bank accounts, registering a subsidiary, qualifying to do business abroad, or executing international contracts & trademark filings.

The 4-Step Process to Obtain an Apostille

• Identify the Issuing Authority: Determine whether your document was issued at the state level (e.g., certificates of good standing or court records) or the federal level (e.g., FBI background checks).
• Notarize or Certify the Document: Before submitting, most documents must be notarized by a local notary public or contain an authorized signature from the issuing agency.
• Submit the Application and Fee: Mail or bring your documents, the required application/request form, and the processing fee (e.g., $10 per document) to the designated authority.
• Receive the Apostille: The issuing office will attach the physical apostille certificate to your document and return it to you. State-level processing times usually take a few days, while federal processing can take several weeks.

This process does not apply to domestic U.S. transactions.

Short Form vs. Long Form Certificate of Good Standing

Most businesses will only ever need the standard short-form certificate. However, some transactions, including complex M&A deals, legal opinion letters, and institutional financing, require the long form with additional details. Ordering the wrong form can delay a transaction. Long-form certificates are only available in some states.

Certificate of Good Standing vs. Similar Documents

A certificate of good standing is just one of several business documents used in transactions. Confusing them could mean submitting the wrong form, delaying the process, or even negating a deal. The table below clarifies the four most commonly mixed-up documents.

Certificate of good standing = current compliance snapshot. Articles of incorporation = the document that creates the entity. Business license = the permission to operate in a specific area or industry.

Where to Get a Certificate of Good Standing

The correct place to request a certificate of good standing depends on both the state of formation and the filing method chosen.

How to Get a Good Standing Certificate in Each State

State-by-State Reference Table

How Much Does a Certificate of Good Standing Cost?

The cost for a certificate of good standing is minimal, but it's also only one side of the coin. Businesses with lapsed compliance often pay significantly more to restore their good standing before they can even request the certificate. Below is the general cost breakdown for obtaining a certificate of good standing, followed by a state-by-state table.

For most businesses, the certificate is inexpensive. The real cost is restoring your good standing after compliance lapses.

State-by-State Cost + Processing Timetable

How Long Is a Certificate of Good Standing Valid?

Although the certificate itself does not have an explicit expiration date, the party requesting it most often will enforce a validity window. Depending on the state, these windows can span 30 to 90 days.

Request a copy of your good-standing certificate no more than two weeks before the transaction deadline to ensure its validity. Allow enough time for processing delays, but late enough to stay within the requester's validity window.

Common Mistakes When Requesting a Certificate of Good Standing

Most businesses only request a certificate of good standing when they need it urgently for an upcoming transaction. However, the most common problems aren't procedural; they are timing and compliance gaps that surface only after you request a copy of the certificate. The most common mistakes include:

• Requesting Before Confirming Compliance: The most common mistake. Businesses submit a request assuming they are in good standing, only to discover they missed filing an annual report or paying a state fee, and the state rejects the request. Always check the status first.
• Letting the Certificate Expire Before Use: If you order the certificate too early, your requester could reject it. If you ordered it four months ago, your lender or counterpart may request a fresh copy. Most companies require a certificate dated within 30-90 days of the transaction. Don't request too early.
• Requesting From the Wrong State: The certificate must come from the state of formation, not the state you operate in. A Texas LLC registered in Delaware needs a Delaware certificate, even if it operates entirely in Texas.
• Name Mismatch with Transaction Documents: If the certificate lists “Smith Holdings LLC” but the loan document lists “Smith Holdings, LLC,” even a single comma can cause counterparties to flag and reject it. Verify the name matches exactly across all documents before submitting to avoid rejection.

How to Maintain Good Standing Year-Round

The best time to think about a certificate of good standing is well before you need one. Businesses that run into problems are those that only check compliance when they need a certificate for a transaction. Use the four best practices below consistently to remain in good standing so that your certificate is available on demand with no remediation costs, no timeline delays, and no closing surprises.

Good Standing Best Practices

• Track State Deadlines and Annual Reports: Most states require an annual or biennial report to keep your entity's basic information up to date. Research your state's requirements and set up a compliance tracker or calendar with notifications to ensure you don't miss any annual report deadlines.
• Maintain an Active Registered Agent: In all states, you must maintain a reliable registered agent authorized to receive legal mail on your behalf. Check that their address is current and that you respond promptly to any notices, so you do not miss official state correspondence.
• Pay All Franchise Taxes and Fees: Remaining in good standing means more than just paying your standing income taxes. Many states also impose an annual franchise tax or localized business renewal fees that are easy to miss. Check your local and state fee requirements to ensure these payments are processed in full on schedule.
• Renew Local Licenses and Permits: Depending on your operations and physical location, you may need various municipal, county, or state permits (e.g., health department certificates, sales tax permits, or professional licenses). Check your U.S. Small Business Administration licensing guidelines annually to ensure all your local permissions are up to date and active.

How to Check a Business's Good Standing Status

A company's good standing status is public record; anyone can look it up for any reason, not just the business itself. Below are two of the main reasons someone might check a good standing status.

Verifying Your Own Status Before You Request

Surprises at closing are expensive. Run a quick SOS check before any major transaction to confirm your standing is clean. Use EntityCheck to search quickly and easily.

Vetting a Vendor, Partner, or Counterparty

Anyone can verify another entity's standing before signing a contract, wiring funds, or onboarding a supplier. Always check a company's good standing before signing.

Ready to Verify Before You Need It?

Frequently Asked Questions