Certificate of Good Standing: What’s in a Name?

Reagan Lehman
Posted on July 16, 2018 by Reagan Lehman in Business Compliance, Nonprofit Compliance.

Certificate of good standing, certificate of existence, certificate of status: states call them by different names, which can cause a bit of confusion for people who don’t work with them all day. In fact, one of our specialists recently ran into a glitch that illustrates just how complex state paperwork can be—even to state administrators.

The Case

Our client was registering to begin operations in a new state, a process called foreign qualification. As part of the process, we ordered a certificate of good standing from the client’s home state. Certificates of good standing are required for many common business transactions, including expanding beyond your home state, opening a bank account, applying for a loan, and getting many state licenses.

In Connecticut, where the client was incorporated, the certificate is called a certificate of existence. When our specialist submitted the foreign qualification package to the new state, it was rejected. Our specialist saw the status change and immediately called for an explanation. The administrator who processed the application explained that it was rejected because a certificate of good standing was not attached. She didn’t recognize the certificate we submitted because Connecticut uses different terminology.

Worse, the administrator wouldn’t budge, even after our specialist explained that states use different names for the certificate of authority. Our specialist had to take the issue up with a supervisor, who apologized and explained that the administrator was still in training. She approved the foreign qualification package right away.

Case Solved!

So if you’ve ever been confused about government paperwork, you’re clearly not alone! In this case, the client had the benefit of a seasoned specialist to advocate for their application. For someone with less experience, that rejection could have led to a lot of wasted time and second-guessing until someone figured out the real issue.

Good Standing Certificates

So what purpose does a certificate of good standing serve? It certifies that your organization has met all of its regulatory obligations within a certain state, including being registered, filing timely annual reports, and maintaining a registered agent. In many states, it also indicates whether you have paid all taxes due on time.

Often, good standing is viewed as an indication of your organization’s financial health, stability, and viability. Many states publish searchable databases that show whether organizations are in good standing. A lapse can do lasting damage to your reputation and your ability to win the trust of potential supporters, partners, and customers.

If you need a certificate of good standing — or existence, or status — we can order one for you easily. Usually, when a certificate is required, it needs to be issued within a certain period, generally 30 days, so make sure to order it close enough to your deadline to ensure that it falls within the required period.

And if you would like to turn over the work of state filings to a specialist who speaks compliance, and who can wrangle your filings through any regulatory roadblock, just give us a call, 1-888-995-5895, or get in touch. We’ll be glad to help.


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