A Certificate of Good Standing certifies that a business has complied with all applicable state laws. A corporation that is registering to conduct business in another state, for instance, won’t be able to do so without a Certificate of Good Standing.
Some states demand that the Certificate of Good Standing be dated no more than 90 days in the past. Any company that wants to conduct business must have a certificate of good standing, regardless of the cause.
Where to Get a Good Standing Certificate
The Certificate of Good Standing is necessary when registering your firm. This certificate is available from many different government agencies, including the Secretary of State’s office in your state.
Florida Certificate of Good Status is typically free, but the cost can vary in some instances, depending on the amount of information you need, how it will be given, and the nature of your business.
Who is eligible for a Certificate of Good Standing?
For official certification of their good standing, registered entities like corporations, limited liability partnerships (LLPs), and LLCs may apply in the majority of states. Businesses must have their yearly reports, fees, and designated registered agents current before applying for a certificate.
Such documents are required by numerous corporate entities. They must abide by several laws and regulations in addition to their legal obligations. The procedure is fairly simple.
The Importance of a Certificate of Good Standing
- A certificate of good standing is a crucial document that attests to the legitimacy and registration of your company.
- It is a crucial document that proves a company is operating legally and that no dissolution papers have been filed.
- You’ll require it to open a bank account for your business, apply for government contracts, or open a bank account.
- It can help you stay out of sticky circumstances while doing business with another organization
- Before approving a loan or engaging in specific transactions, banks or lenders may check your company’s legitimacy and history.
- It prevents the risk of putting private property at risk.
What Happens If You Don’t Have a Certificate of Good Standing?
- It’s bad to let the company’s condition deteriorate. However, it is possible. The results could be severe.
- If a business doesn’t follow the law, it may be administratively closed down or even expelled from the state where it is registered.
- The proprietors’ personal assets could be at danger if a business has a bad reputation.
- If you don’t comply, a judge can unjustifiably rule that your company’s corporate veil has been penetrated and annul the limited liability protection it offers.
- In actuality, losing good standing might increase a company’s vulnerability to identity theft.
Criminals frequently use search engines to look for businesses in order to discover ones with lapsed good standing.
- If they believe no one is keeping an eye on the business. They make an effort to assume the identity of the business in order to get unauthorized access to accounts and carry out fraudulent actions.
How long will it take for things to start going wrong? There isn’t a technique that is widely used. Some states take many years of non-reporting or non-payment of fees before they uncover a corporation in bad standing.