General Information about Certificates of Good Standing aka Existence, Compliance, Status
A certificate of good standing is issued by a state for a limited liability company (LLC), corporation, limited partnership, limited liability partnership, limited liability limited partnership, etc.
Good standing simply means that a company has paid all franchise taxes or fees and that any annual reports have been filed with the jurisdiction where the company is incorporated.
Reasons to obtain a certificate of good standing include:
- to foreign qualify your company in another state
- opening a bank account
- leasing office or warehouse space
- obtaining credit from a bank or leasing company
- prove to a court of other entity
Even though a company may be in good standing in the state where it is incorporated, the company may still be involved in any one or more of the following:
- investigation for labor law violations
- an audit for unpaid payroll. unemployment, and/or trust-fund taxes
- having its property seized for unpaid state and federal income taxes
- delinquent on its property taxes
- convicted of multiple felony crimes
- under suspicion for securities fraud
- in bankruptcy
- being sued for causing people to die due to its products being defective, and
- have the entire board of directors indicted for suspected criminal behavior