Business Miscellaneous

What Is a Certificate of Good Standing, and Why Does It Matter?

As a business owner, you may have heard other entrepreneurs discussing something called a Certificate of Good Standing. But maybe you’re unsure what this actually is and why it matters.

Very simply, a Certificate of Good Standing is not necessarily a requirement, but it can be one feature that’s nice to have for your business. It is definitely something to keep in mind if you are just forming your business, though it can also be useful if your business has been around for years.

Below, we’ll break down what a Certificate of Good Standing is, why having one matters and how you can obtain one yourself.

What Is a Certificate of Good Standing?

On Incfile’s Certificate of Good Standing resource page, it notes that: “A Certificate of Good Standing is an official document issued by your state’s secretary of state office to verify that your business is compliant within the state of incorporation and therefore is in ‘good standing.’”

You can compare this to having your driver’s license or other forms of personal identification, since it helps prove that your Limited Liability Company (LLC) or corporation is officially registered and authorized to operate in your home state.

A Certificate of Good Standing is also known as a Certificate of Existence, Certificate of Authorization, or a Certificate of Status. It’s a one-page document provided by your secretary of state that shows proof of your business entity.

Why Does a Certificate of Good Standing Matter?

Now that you know what a Certificate of Good Standing is, you can hopefully see why it also matters when it comes to your business. This is an important document you can use to show proof that your business is officially registered and allowed to operate in a specific state.

This could come in handy when obtaining a loan, renew a business license or filing your business taxes. Having this type of certification will showcase your business’ good reputation and prove you are a law-abiding business owner who complies with the rules.

General reasons you may need a Certificate of Good Standing include the following:

  • Other state governments may need it as part of the process of applying for Foreign Qualification, which is how you register to do business in states other than your home state.
  • Lenders or banks may need proof of your business’ existence and history as part of evaluating your creditworthiness for a loan.
  • Investors, business partners or other stakeholders may want to ensure your business is legitimate and in compliance with laws and regulations.
  • Licensing agencies and regulators may need it when you renew or obtain certain permits and licenses.
  • Business brokers or buyers may need it if you are seeking to sell your business and need to show proof of its existence, history and compliance.

How Do You Get a Certificate of Good Standing?

Now that you are sold on becoming an upstanding business owner who wants to comply with the rules and get your Good Standing Certification, the next question is, how do you get one? It’s fairly simple.

Once you have your business entity formed and registered as a legal entity with the secretary of state, you will then need to file the appropriate Good Standing Certificate form with your state.

After you file and receive, make sure to stay up-to-date on any fees to the secretary of state to renew your business, file your Annual Reports and pay any other necessary business taxes.

Get Your Certificate of Good Standing Today

Ready to get your Certificate of Good Standing? Incfile can handle the paperwork for your Certificate of Good Standing for just $49 (plus any applicable filing fees in your state). So save your time and let Incfile handle the logistics while you keep focusing on what matters most: growing your company.

This article was originally published on the Incfile Blog.

About the author


Lisa Crocco

Lisa Crocco is a marketer for an international food manufacturer by day and a freelance writer/marketer for startups & small businesses by night. She's written for outlets like USAToday College, Career Contessa, Cloudpeeps, and Fairygodboss.