When operating a business such as an LLC or corporation, you will need to remain in compliance. This may include registering properly with the state and staying up to date on all documents with the state. You will also need to pay registration fees as well as annual compliance fees. If you do this, you will be considered “in good standing” and will receive a certificate of good standing. Having this certificate means that you are legally permitted to engage in business activities in that state.
What is a Certificate of Good Standing?
The certificate of good standing is a document that certifies that your company is properly registered with the state. In order to hold this good standing, you will need to have paid all your registration fees in the state of Florida, as well as annual filings. It essentially means that you are legally permitted to engage in business activities in the state of Florida. This can be called other names in other states, such as the certificate of status or certificate of existence.
The certificate of good standing typically has an expiration date. This means that you will need to renew it every so often. Typically this is annually and is when you need to pay your annual fees. Some states have periodic renewals such as every two years.
When you originally form your business in one state and stay in good standing, you can take that certificate and form in another state. You would need to do this as a foreign entity.
It is important to note that a certificate of good standing is not a business or occupational license. Although this is necessary in order to legally conduct business, it is also not possible to conduct business without being in good standing. The difference lies in that it is possible to register without obtaining a certificate of good standing.
Who Can Get a Certificate of Good Standing?
Not all types of business entities need to register with the state. Because of this, it means that not all types of entities can get a certificate of good standing. Businesses that register with the state, such as corporations, s corps, LLCs, and limited partnerships, can obtain a certificate of good standing. Sole proprietorships and general partnerships cannot get an official certificate, because they do not need to register with the state.
Where to Get a Certificate of Good Standing
The state agency where your business is registered is the same agency that will issue a certificate of good standing. In most states, this is the secretary of state. In Florida, it is at the Division of Corporations and called “Certificate of Status”. It is not necessarily important to know what the certificate is called, but you should find out where to obtain this from your secretary of state if it is another state other than Florida.
How to Get a Certificate of Good Standing
In order to get a certificate of good standing, you can request it from a state agency where you are a registered business. In Florida, it is at the Division of Corporations. The fee varies from state to state but the cost is $5 for LLCs and $8.75 for corporations and limited partnerships. In order to keep your business in good standing, you need to ensure that you pay business taxes on time. You should also be sure to pay any annual fees involved in the type of business you own.
When Do You Need a Certificate of Good Standing?
There are many situations in which you may need a certificate of good standing. For example, you may be asked for your certificate of good standing by an organization that you plan to do business with. Another reason would be to open a business bank account or apply for a business loan. Any time you seek investments or funding you may need to show this as well.
One other common reason to need proof of a certificate of good standing is if you decide to register your business as a foreign entity (meaning in another state.) In this case, you would need a certificate of good standing from the state of formation to prove that you can do business in that state as well.