In California, potential creditors or investors might request a certificate of good standing for your LLC, and you’ll need to be able to provide one or risk the loss of key business financing. Thankfully, this guide provides all the information you need to get this certificate in California.
What is a Certificate of Good Standing for California?
In California, a certificate of good standing verifies that you’re a legally registered business entity that is up to date on all filings and fees and permitted to do business in the state. You do not have to obtain this certificate to do business in California, or in any state. It is simply used to verify your strong status to third parties such as banks.
Why Do I Need a Certificate of Good Standing?
Your LLC only needs a certificate of good standing if another party requests one. For instance, a bank might request one if you’re opening a bank account or applying for a loan. The credit firm might request one if you apply for a business credit card, or if you set up credit card processing for customer payments.
If you’re registering as a foreign LLC in another state, you will probably be asked for a certificate of good standing.
A foreign entity is simply a business entity doing business in a state other than the one in which it’s registered. For example, if your business is registered in California but you also do business in Georgia, you’ll need to register a foreign entity in Georgia.
Where to Get a Certificate of Good Standing in California
In California, the Secretary of State issues certificates of good standing. Just go to the secretary of state’s website to fill out the required form. There is no fee for an online request for the certificate and you should receive your certificate immediately via email.
Requirements for a Certificate of Good Standing
You must be registered as a business entity in that state. Operating as a sole proprietorship or a partnership does not require registration in California, so those entities are not able to obtain a certificate of good standing.
Corporations and LLCs, like your business, must be registered with the state, so they are able to obtain the certificate.
How Much Does a California Certificate of Good Standing Cost?
Again, a certificate of good standing in California is free when you make the request online, so it’s well worth the time it takes to apply. This is an official document that proves your business’ financial accountability and could open the door to greater investment and expansion.