Good Standing is a legal term used to indicate that a business entity (such as a corporation or LLC) is compliant with all required state or federal regulations and is authorized to operate in that jurisdiction. A company in good standing has filed all necessary documents, paid all required fees or taxes, and met other regulatory requirements set by the state. Maintaining good standing is critical for preserving liability protections, entering into contracts, obtaining financing, and expanding to other states.
Simplify credential management
Tracking employee certifications and licenses doesn't have to be complicated. Expiration Reminder helps you send automated notification and keep your company compliant.
Key Facts
- Compliance: Means a business has submitted required filings (for example, annual reports) and paid taxes and fees.
- Certificate of Good Standing: A formal document issued by the state confirming a business’s active status.
- Legal Protection: Maintains the business’s limited liability status and legal recognition.
- Consequences of Loss: Loss of good standing can lead to penalties, suspension, or even involuntary dissolution.
- Multi-State Operations: Required to obtain foreign qualifications in other states where business is conducted.
1. What does it mean for a business to be in good standing?
It means the business has complied with all state laws, including tax filings and annual reports, and is legally authorized to operate in that jurisdiction.
2. How do I check if my business is in good standing?
You can check with the Secretary of State’s office (or equivalent agency) in your state, often through an online search of the business registry.
3. What is a Certificate of Good Standing?
It’s an official state-issued document proving that your business entity is active and has met all legal requirements to operate.
4. Why is good standing important?
Good standing is crucial for maintaining legal protections, securing loans, forming contracts, expanding into other states, and maintaining business credibility.
5. How do I restore a business to good standing?
You must file overdue reports, pay outstanding fees or penalties, and possibly submit a reinstatement application depending on the state’s process.
Make sure your company is compliant
Say goodbye to outdated spreadsheets and hello to centralized credential management. Avoid fines and late penalties by managing your employee certifications with Expiration Reminder.
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