Everyone sees the vision of starting their own business, but only a few get the chance to convert their business idea into a reality. Establishing a brand and starting a business is not as easy as shelling peas. But once you start your business, you need some legal documents to set up your business.
A certificate of good standing is not one of the documents that you require to operate a business. But, it has a connection with basic legal requirements to do business in your business registration state.
This blog contains everything crucial about the business document, a certificate of good standing.
What is a Certificate of Good Standing?
This certificate indicates that you are running a registered business with the state. Your business is on the list of legit businesses.
It is not a licence to do business. This certificate is needed when you want to apply for your business insurance or to get a government contract.
Where to Get a Certificate of Good Standing?
The Secretary of State’s office of the State where you reside and running your business will provide you with a certificate of good standing.
Generally, the fee for issuing this certificate varies depending on the State and type of business.
Which Businesses Can Apply for a Certificate of Good Standing?
You can apply for your good standing certificate if you want to register your business with the state. Here is the list of businesses that can get a certificate of good standing to give a hike to their business.
- Limited liability companies (LLCs)
- S corporations
When Do You Need a Certificate of Good Standing?
This certificate is also known as a Certificate of Existence that you need for your business for the following reasons:
- For investments from investors
- To open a business insurances bank account
- National Certificate in Education
- Apply for a business loan
- To do business in another state
If you do not have a certificate of good standing, you can still apply for a business loan with your tax returns or financial statements.
On the other hand, this certificate won’t last forever. Your certificate may expire when you apply for your business’s state registration.
Read More: Commercial Document Attestation
What are the Disadvantages of Not Having a Certificate of Good Standing?
- If your business fails to comply with the law, it can lead it to be dissolved administratively, or even the state where your business is registered can disqualify it.
- Unregistered businesses create risk for their personal assets.
- Not having a good standing certificate could indicate to the government that your company is susceptible to identity theft.
What is the Importance of Having a Certificate of Good Standing?
- It is confirmation to your audience and government authority that you are running a legally registered and legitimate business.
- A certificate of existence is crucial for your business to have a bank account or compete to get government contracts.
- It is one of the essential documents you need to run your business with another entity.
- It helps the bank verify your company’s existence and background prior to granting a loan or certain transaction.
What is the Right Time to Get a Certificate of Good Standing?
You can get a certificate of existence for your business dated within one month of its last use. This certificate comes with a validity of only six months. The correct time to get this certificate depends on your business type and the state where you want to register your entity.
What are the Common Requirements to Maintain your Good Standing in the Government?
- Pay your taxes on time
- Maintain your annual report
- Keep an accurate record of business and professional permits
- Follow all corporate guidelines
- Timely pay franchise taxes
Read More: What is Export Invoice
How to Apply for a Certificate of Good Standing (CGS) Online?
Here is a way to apply for a certificate of existence online for Tamil Nadu.
It is an example of applying for a CGS for a medical business. Each state follows certain rules and regulations regarding how business owners can obtain their good standing certificate.
Documents Required for Applying for a CGS:
- MBBS Registration Certificate
- Additional Qualification Registration Certificate
- Two testimonials from a gazetted officer
- ID Proof
- Online Payment
Online Processes to Get a CGS Are:
- Go to the TNMC Account website and log in
- Fill out the required details
- Upload scanned documents
- Apply for Normal or Tatkal Application Registration
- Pay online
Once your application is successfully submitted, choose your appointment date with your registered mail Id. After the successful verification, you will get your CGS on your registered e-mail.
Going through one website to another to find the method to get a good standing certificate for your company is not easy as shelling peas, and it is time-consuming.
It is worthwhile to hire an authorised agency to apply for your business good standing certificate under compliance management systems.
Businesses require a certificate of good standing to confirm to their customers and government that they are running a legal business.