What is a certificate of good standing? When you need one — and why it matters
- What is a certificate of good standing?
- Who can get a certificate of good standing?
- When you need a certificate of good standing
- Why banks ask for a certificate of good standing
- What happens if you lose good standing
- How to get a certificate of good standing
- What causes certificate requests to be rejected?
- State examples
- How to stay in good standing year-round
- The bottom line
- Build a compliant, cash-ready business with Ramp
If you plan to open accounts, sign important agreements, or expand into new states, one document often stands between you and approval: a certificate of good standing.
This guide explains what the certificate covers, when you’ll need it, how to obtain one quickly, and how to stay compliant over time.
TL;DR: Does your business need a certificate of good standing?
You’ll likely need one if you’re about to:
- Open a business bank account
- Apply for credit, a loan, or a line of credit
- Sign a major contract or commercial lease
- Register your business in another state
- Undergo investor due diligence or fundraising
- Renew certain licenses, permits, or insurance
If none of these apply, you may not need a certificate today—but staying in good standing ensures you can get one quickly when required.
What is a certificate of good standing?
A certificate of good standing—sometimes called a certificate of status, existence, authorization, or compliance—verifies that your company meets the state’s requirements for active operation.
Your state will only issue this certificate if your business:
- Is formally registered with the Secretary of State
- Has filed required annual or biennial reports
- Has paid all state fees and franchise taxes
- Maintains an active registered agent with a physical in-state address
- Has not been suspended, dissolved, or flagged for delinquency
What the certificate typically includes
- Legal business name
- Entity type and identification number
- Formation or registration date
- Statement affirming good standing
- State seal and authorized signature
- Date of issuance (important for banking and underwriting)
This document serves as standardized proof that your entity is legitimate, compliant, and properly maintained.
It functions much like a health certificate for a restaurant: rather than reviewing every underlying requirement, banks and agencies can rely on a single, state-issued confirmation that your business meets all ongoing standards.
Who can get a certificate of good standing?
Only state-registered businesses can obtain this certificate.
Eligible business types
- Limited liability companies (LLCs)
- Corporations (C-corps and S-corps)
- Limited partnerships (LPs), LLPs, and LLLPs
- Professional corporations (PCs, PLLCs)
- Registered nonprofits
These entities file with the state, creating a paper trail the state can verify.
Not eligible
- Sole proprietorships
- General partnerships
Because these structures do not register with the state, no compliance record exists to certify.
When you need a certificate of good standing
Banks, investors, and agencies ask for this certificate to verify you’re legitimate and compliant.
10 common situations when you’ll be asked for a certificate of good standing
1. Opening a business bank account
Banks require a certificate of good standing as part of KYB (Know Your Business) reviews. It verifies that your business is legally formed and active before an account is opened. Entities not in good standing may face delays or denials.
2. Applying for credit, loans, or lines of credit
Lenders use the certificate during underwriting to confirm your business exists, is authorized to borrow, and meets state requirements. SBA loans and venture debt almost always require it.
3. Setting up payment processing or merchant accounts
Providers like Stripe, PayPal, Square, and traditional merchant processors use the certificate to verify legitimacy and compliance. Without it, your business may be unable to accept card payments.
4. Registering to operate in another state (foreign qualification)
Before granting foreign qualification, states require proof that your home state recognizes your business as active and compliant.
5. Signing contracts with enterprise companies or government agencies
Procurement teams often require a certificate to verify vendor legitimacy before entering long-term or high-value agreements.
6. Investor due diligence and fundraising
Investors use the certificate to confirm that your entity is in good standing and authorized to issue equity. If you’ve missed filings or fees, investors may pause or delay diligence.
Example: During a Series A diligence review, an investor discovered that a startup’s certificate was outdated due to a missed annual report. The entity was marked delinquent, and the deal stalled until the lapse was corrected and a current certificate obtained.
7. Selling your business or transferring ownership
Buyers and M&A attorneys rely on the certificate as part of closing requirements to confirm the entity is active and compliant.
8. Signing a commercial lease
Landlords often request a certificate during tenant vetting to ensure they’re contracting with a legitimate, active business.
9. Renewing licenses, permits, or insurance policies
Industries such as construction, healthcare, food services, and finance may require a certificate for renewals. If you’re not in good standing, operations may be disrupted.
10. Maintaining limited liability protections
States can suspend or dissolve entities that fall out of compliance. When that happens, owners risk losing the liability protections of an LLC or corporation. A certificate confirms that those protections remain intact.
Why banks ask for a certificate of good standing
Banks and lenders use a certificate of good standing to meet Know Your Customer (KYC) and Customer Due Diligence (CDD) obligations under the Bank Secrecy Act and FinCEN’s CDD Rule. These rules require institutions to verify a business’s legal existence, formation status, and ongoing compliance before opening an account or extending credit.
A recent certificate—typically issued within the last 30–60 days—helps banks confirm that:
- The business is active and properly registered
- Compliance filings and fees are current
- The entity is authorized to transact and take on financial obligations
Banks may request an updated certificate when you apply for credit, add signers, or open accounts for related entities.
Example: A Delaware LLC applied for a business bank account after an ownership change. The bank required a certificate issued within the last 60 days, but the company had missed its annual report deadline and appeared delinquent. The bank could not complete KYB review until a new certificate was obtained—delaying approval by nearly three weeks.
What happens if you lose good standing
Falling out of good standing can create significant operational and legal obstacles. States may:
- Add penalty fees
- Reject filings
- Block foreign qualification
- Suspend your right to operate
- Administratively dissolve your business
What are the consequences?
While not all entities reinstate, those that do typically wait anywhere from a few days to several months, depending on the state:
- A few days: Fast-processing states
- 1–3 weeks: Most states
- Several months: States requiring tax clearance or multi-year back filings
During administrative dissolution, the business still exists as a legal entity but cannot lawfully operate. This can stall:
- Bank account applications
- Credit approvals
- Payment processing setup
- Fundraising and investor diligence
- Licensing and permits
- Commercial leases
- Insurance coverage
Reinstating good standing typically requires filing overdue reports, paying outstanding fees, and submitting a reinstatement request. The exact cost and timeline vary by state.
How to get a certificate of good standing
The process is straightforward if your business is compliant.
1. Confirm your status
Check your state’s online business registry to ensure you appear as “active” or “in good standing.”
2. Fix any compliance issues
Before submitting your request, make sure:
- Reports are filed
- Taxes and fees are paid
- Registered agent information is accurate
- Business name and address are correct
3. Request the certificate
Most states allow requests:
- Online (fastest; often instant)
- By mail
- In person
What causes certificate requests to be rejected?
Common reasons include:
- Missing or late annual reports
- Unpaid franchise taxes or fees
- Incorrect legal name or entity number
- Using a DBA instead of the legal name
- Lapsed or invalid registered agent
Once corrected, you can reapply.
State examples
| State | Official Name | Methods | Cost* | Processing Time (Typical) |
|---|---|---|---|---|
| California | Certificate of Status | Online, Mail, In-Person | $5 (online/mail) | Online: Minutes Mail: Varies |
| Delaware | Certificate of Good Standing | Online, Mail | $50 (short form) | Online: Same day Mail: Varies |
| Florida | Certificate of Status | Online, Mail | $8.75 (corporations) | Online: Immediate PDF |
| New York | Certificate of Status | Mail, Fax, Email, In-Person | $25 | 2–3 business days (typical) |
| Texas | Certificate of Fact – Status | Online (SOSDirect), Mail | $15 | Online: Immediate Mail: Varies |
*Costs vary slightly by entity type in some states. Some states offer expedited processing for an additional fee.
Names vary, but the purpose is the same.
How to stay in good standing year-round
Think of good standing as an annual health check for your business.
To remain compliant:
- File annual or biennial reports on time
- Pay franchise taxes and required state fees
- Maintain a reliable registered agent
- Update business addresses, officers, and owners promptly
- Track filing deadlines in every state where you operate
A compliance calendar prevents last-minute scrambles. Automated tools can handle reminders and reduce the risk of missed filings.
The bottom line
This simple piece of paper opens doors. It tells banks, investors, agencies, and counterparties that your business is legitimate, compliant, and safe to engage with. You’ll need it for banking, credit, fundraising, contracts, insurance, leases, and expansion into new states.
Maintaining good standing isn’t just about avoiding penalties. It keeps your company operationally ready—able to open accounts, close deals, and move quickly when opportunities arise.
Build a compliant, cash-ready business with Ramp
Staying in good standing keeps your business ready for every opportunity. Ramp Treasury1 helps you put your cash to work with the control, visibility, and safeguards today’s teams expect.
Stay compliant. Stay ready. Strengthen your cash strategy.
Ramp Business Corporation is a financial technology company and is not a bank. Bank deposit services provided by First Internet Bank of Indiana, Member FDIC. Customers with a Ramp Business Account can use the ICS service provided by IntraFi Network LLC. Subject to the terms of the applicable ICS Deposit Placement Agreement, First Internet Bank of Indiana, member FDIC, will place deposits at FDIC-insured institutions through IntraFi’s ICS service. A list identifying IntraFi network banks appears at https://www.intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. To meet the conditions for pass-through FDIC deposit insurance, deposit accounts at FDIC-insured banks in IntraFi’s network that hold deposits placed using an IntraFi service are titled, and deposit account records are maintained, in accordance with FDIC regulations for pass-through coverage. Deposits are insured by the FDIC up to the maximum allowed by law; deposit insurance only covers deposits in the Ramp Business Deposit Account in the event of the failure of the FDIC-insured bank.
Securities products and brokerage services are provided by Apex Clearing Corporation. Apex Clearing Corporation is an SEC registered broker dealer, a member of FINRA and SIPC, and is licensed in 53 states and territories. FINRA BrokerCheck reports for Apex Clearing Corporation are available at: brokercheck.finra.org. The Investment Account is not a deposit product, not insured by the FDIC, and may lose value.
1. Get up to 2% in the form of annual cash rewards on eligible funds in your Ramp Business Account. Cash rewards are paid by Ramp Business Corporation and not by First Internet Bank of Indiana, Member FDIC. Cash rewards are subject to change. See the Business Account Addendum for more information.
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FAQs
Yes. Each state issues its own certificate.
Most banks, lenders, and investors require one issued within the last 30–90 days.
Some banks may allow it, but most require proof of good standing—especially for corporations and LLCs.
Resolve the compliance issue (late filings, unpaid fees, inaccurate agent information), then reapply.
File overdue reports, pay outstanding fees, update registered agent information, and submit reinstatement paperwork if required.
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