Why you need a certificate of good standing, and how to get one

You’ve just landed a game-changing partnership, but there’s a catch: the other company wants proof your business is legally compliant. Or maybe you’re applying for a loan, and the bank asks for a document you’ve never heard of. Enter the certificate of good standing—a critical, often overlooked piece of paperwork that validates your business’s legitimacy. 

Whether you’re a startup or an established LLC, understanding this document can mean the difference between closing a deal and hitting a bureaucratic wall. Let’s break down what it is, when you’ll need it, and how to get yours fast.

What is a certificate of good standing?

A certificate of good standing (also called a certificate of status or certificate of existence) is an official document issued by your state. It confirms that your business:

• Is legally registered and active.
• Has filed all required reports (e.g., annual reports).
• Has paid state fees, taxes, and penalties.
• Complies with state regulations.

This certificate doesn’t expire, but its relevance does. Most banks, investors, or partners will request one issued within 30–90 days to ensure your business is currently compliant.

Why your business needs a certificate of good standing

A Texas-based LLC once lost a $500K investment because their certificate had lapsed—they’d forgotten to file an annual report, defaulting their "good standing" status.

That’s why you need to be wary of when you need a certificate of good standing. 

Common use cases include:

• Opening a business bank account: Banks require proof of legal status.
• Securing loans or funding: Lenders verify you’re not in arrears.
• Expanding to new states: Registering as a foreign entity often requires a certificate from your home state.
• Applying for licenses or permits: Many industries (e.g., healthcare, construction) mandate compliance.
• Forming partnerships or selling the business: Buyers want assurance there are no hidden liabilities.

How to get a certificate of good standing

The process varies a bit by state, but here’s the gist of what you’ll need to do:

Step 1: Check if you’re actually in good standing

Head to your state’s Secretary of State (SOS) website—here’s New York’s, California’s, or Texas’s as examples. 

Look for the Business Entity Search tool (sometimes called “Corporate Search”). 

Punch in your business name to check:

• All annual reports are filed.
• All fees and taxes are paid.
• No pending penalties or compliance issues.

Here’s a quick tip: If your state’s website feels like a maze, try Googling “[Your State] Secretary of State business search” for a direct link.

Step 2: Fix any problems (if you’re not in good standing)

Found a red flag? Maybe you missed a report or have unpaid fees. 

No biggie—simply file overdue docs, pay fines, or clear up whatever’s blocking your status. Most states let you do this online.

Step 3: Request the certificate

Once compliant, apply through your state’s SOS portal. 

You’ll typically need:

• Your business name and entity number (found in your SOS account).
• A payment (usually $10-$50)
• A rush fee ($50-$100) if you’re in a hurry (like needing it in 24 hours).

This timeline also could differ based on where you’re requesting it. In Florida, you’ll get the certificate instantly. In New York, it takes 1–2 weeks unless you pay extra.

Step 4: Get your certificate

Most states email a PDF same-day. Others, such as Virginia, mail a paper copy. Double-check if you need a notarized version—some banks or foreign states require it.

This is all simpler than it sounds, but if you’re juggling multiple states or deadlines, tools like Rho’s compliance tracker can auto-remind you about filings and fees.

Other state-specific quirks to know

• New York: Certificates list “NYDOS” (Department of State) and require notarization for some uses.
• California: The SOS offers a “certificate of status” (same as good standing).
• Delaware: Favored by LLCs for privacy, but charges $50 for certificates.
• Texas: Certificates expire 30 days after issuance for certain transactions.

Three costly mistakes to avoid

Even minor oversights in compliance can derail critical business opportunities. 

Here are some common errors to look out for, plus tips on managing them to ensure your certificate of good standing remains valid and actionable:

1. Overlooking compliance requirements

Many businesses assume they’re compliant until a problem arises. But there’s a lot you’ll need to do proactively. For example, missing an annual report filing or a franchise tax payment can revoke your “good standing” status, even if all other obligations are met!

Compliance requirements typically vary, but most states mandate:

• Annual/biennial reports (ownership/activity updates).
• Franchise or privilege taxes (often due yearly, even with no revenue).
• License/permit renewals (industry-specific, like healthcare or contracting).
• Registered agent/address changes (update within 30–60 days).

You can check your state’s business portal for exact deadlines and forms.

2. Relying on outdated certificates

Certificates of good standing don’t “expire,” but their relevance does. Most banks, lenders, or partners require certificates issued within the last 30–90 days. 

For example, a California-based tech startup had to delay a merger by three weeks because their certificate was six months old. Always request a new certificate before major transactions.

3. Neglecting multi-state compliance

Expanding to a new state? You’ll need to both maintain good standing in your home state and register as a foreign entity in the new state. 

A Florida e-commerce business, for instance, faced penalties in Georgia for operating without foreign qualification, despite being compliant in Florida. Research target states’ SOS requirements early.

How Rho keeps your business in good standing

A certificate of good standing is proof your business is trustworthy, compliant, and ready to grow. But staying in good standing requires meticulous tracking of filings, fees, and deadlines. Rho can help you stay ahead.

Rho’s platform helps you minimize administrative burdens by:

• Automating deadline alerts: Receive reminders for annual reports, tax payments, and license renewals, tailored to your state’s requirements.
• Centralizing documents: Securely store and access certificates, licenses, and compliance records in a single dashboard.
• Streamlining payments: Schedule and pay state fees, taxes, and penalties directly through Rho, avoiding missed deadlines.

Need a partner to streamline compliance? Explore Rho’s tools to track deadlines, pay fees, and manage documents—all in one place.