It is a foreign corporation in other states. A corporation or LLC is “domestic” in its state of formation and “foreign” in other states.įor example, a business that was incorporated in Ohio is a domestic corporation in the state of Ohio. In this context though, “foreign” simply means a different state. “Foreign” usually means a different country.
Registering to transact business in a state other than your state of formation is generally called foreign qualification.
Failing to appropriately maintain a registered agent or registered officeĪ requirement for doing business in other statesĪ Certificate of Good Standing is often required in order to register to do business in other states. However, any failure to maintain good standing is a compliance red flag that needs immediate attention.Ĭommon reasons why an entity loses “good standing” status include. The “proof” concept behind a good-standing certificate is fairly simple. The document the state provides may be called a “Certificate of Good Standing”, a “Certificate of Existence”, “Certificate of Authorization”, or something similar. It serves as proof, or evidence, that the entity exists and is authorized to transact business in the state.īusiness entity laws vary among the states. Generally, a Certificate of Good Standing simply indicates that the entity has filed all reports and paid the necessary fees with the Secretary of State’s office. The meaning of Certificate of Good Standing Maintaining good standing helps to avoid delays caused by trying to update your status with a state agency in the middle of a deal or loan. Lenders may require a Certificate of Good Standing to approve financing. Quickly obtain a “good standing” certificate for lenders. Preserve the limited liability that using an entity provides. 
Ensuring the entity’s “good standing” status at all times helps to Doing so, however, means keeping your entity in compliance with state filings and other requirements.Īfter a corporation, limited liability company (LLC), or other entity is formed, the entity needs to maintain “good standing” status in state records. Has your business ever been asked to provide a “ Certificate of Good Standing”? This state-issued document is something you always want to be able to provide if asked.
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