If you’re looking to access business financing from a bank, investor, or other lender, you may be asked to provide a certificate of good standing.
Obtaining one isn’t difficult, but it's important to understand what they’re for and what information you’ll need to request one.
In this article, we’ll discuss what a certificate of good standing is, who needs one and why, and the steps involved in obtaining one.
What is a certificate of good standing?
A certificate of good standing is an official document issued by a state or government authority that confirms a business is legally registered and compliant with its ongoing requirements.
The main purpose of this certificate is to verify that the entity:
- Exists
- Is authorized to operate
- Has met all mandatory obligations required to remain active under state law
A certificate of good standing serves as trusted proof of a company’s legal and compliance status. It's used by banks, lenders, investors, government agencies, and large customers before:
- Approving financing
- Opening accounts
- Executing contracts
- Allowing a business to register or operate in another state
Without a valid certificate, routine transactions can be delayed or blocked, even if the business is otherwise operating normally.
What does a certificate of good standing prove?
A certificate of good standing proves that a business is legally registered and compliant with the requirements of the state or government authority where it was formed.
More specifically, it confirms that:
- The entity is active and authorized to operate
- Required filings like annual reports have been submitted
- Applicable state fees or franchise taxes are current
- The business has not been administratively dissolved, suspended, or revoked by the state
Because it is issued by an official authority, the certificate serves as a trusted, third-party verification of a company’s legal and compliance status at a specific point in time.
For this reason, banks, lenders, regulators, and counterparties rely on it as a trusted document when assessing risk, approving transactions, or confirming that a business is eligible to operate or enter into trade agreements.
Why do you need a certificate of good standing?
You need a certificate of good standing because it provides formal proof that your business is legally compliant and eligible to operate, which is often required to complete important commercial and regulatory actions.
For instance, in many business financing scenarios, your bank, lender, or investor may require the certificate before:
- Opening an account
- Issuing a loan
- Extending credit
- Finalizing funding
The certificate of good standing is also commonly requested during mergers, acquisitions, and contract negotiations to confirm that the business is legally active and in good standing at the time of the transaction.
In many cases, it may be required for specific licenses and permits.
For example, a government agency may request one when using or renewing a professional license or industry-specific permits. If you’re registering to do business in another state or jurisdiction, authorities regularly request a certificate of good standing to confirm the business is compliant in its home state before approving foreign registration.
Maintaining a certificate of good standing supports a positive business reputation. It signals reliability, compliance, and operational maturity to customers, partners, and regulators. Businesses that can readily produce a current certificate avoid delays, reduce compliance risk, and demonstrate that they manage their legal and administrative obligations proactively.
What does a certificate of good standing include?
A certificate of good standing typically includes several core components, including:
- The legal name of the business entity
- The state of formation
- Confirmation that the entity is active and compliant
- A statement that required filings and fees are up to date
- The date of issuance
- An official seal or authorization from the issuing agency
Who needs a certificate of good standing?
A wide range of businesses and entities may need a certificate of good standing.
Common scenarios where a company might require a certificate of good standing include>
- Opening or maintaining a bank account
- Applying for a loan or line of credit
- Entering into a significant contract with a large customer or supplier
- Expanding into a new state
- During a merger, acquisition, or ownership change
- For license and permit applications or renewal
How to obtain a certificate of good standing
Obtaining a certificate of good standing follows a clear, repeatable process. While details vary slightly by jurisdiction, the steps and requirements are generally consistent.
1. Confirm your business is in good standing
Before you submit an initial request, it's important to verify that your business is indeed compliant with state requirements.
This includes:
- Filing all required annual or periodic reports
- Maintaining an active registration
- Paying any applicable state fees or franchise taxes
If your business is not compliant with any of the above, the state will not issue a certificate until you resolve the outstanding issues.
2. Identify the issuing authority
Next, determine which government agency issues certificates of good standing in your jurisdiction. In most cases, this is the Secretary of State or an equivalent business registry office in the state where the business was formed.
3. Submit the certificate request
This is where you submit the actual request, using the issuing authority’s online business portal, or, where available, by email or in person.
Generally, you’ll need to provide the legal name of the business or its entity identification, and then select a certificate of good standing from the available document options.
4. Pay any required fees
Most states charge a fee to issue a certificate of good standing. Fees vary by jurisdiction but are usually modest. Payment is typically required at the time of submission and can often be completed online for faster processing.
5. Receive and review your certificate
Once processed, the certificate is issued digitally or mailed to the requester.
When you receive it, review the document to confirm that the business name, status, and issuance data are accurate.
This last piece is important, as many banks, lenders, and agencies require certificates issued within a specific timeframe, often within 30 to 90 days.
Required documentation and fees
In most cases, no additional documentation is required beyond the request itself, since the state already maintains the business’s records. The primary requirement is that the business is fully compliant at the time of the request.
Fees vary by state and should be confirmed in advance to avoid delays.
Typical processing times
Processing times can vary a lot depending on the jurisdiction and the request method.
Online requests are typically processed within one business day or even immediately. Requests submitted by mail or in person may take several business days or longer. Expedited options may be available in some states for an additional fee.
Tips for a successful application
Here are a few tips to make sure your application is smooth and easy:
- To avoid delays, ensure all filings and payments are current before submitting a request
- Use the exact legal business name as registered with the state
- Request the certificate close to when it will be used to meet freshness requirements
Beyond certificates of good standing
A certificate of good standing is more than a one-time document. It reflects a business that consistently meets its legal, financial, and administrative obligations, and can prove compliance when it matters most for financing, contracts, or expansion.
For new businesses, maintaining that level of discipline from day one is critical.
BILL helps companies automate payments, approvals, and financial workflows so obligations are met on time and records stay accurate.
By strengthening the financial operations that support compliance, BILL helps businesses stay prepared to request a certificate of good standing whenever the opportunity arises.
