A Certificate of Good Standing, also called a "Certificate of Existence" or "Certificate of Authorization," is a state-issued document that shows that your corporation or limited liability company (LLC) has met its statutory requirements and is authorized to do business in that state.

Among other things, a Certificate of Good Standing confirms that your business:

• Is up-to-date on its state fee payments
• Has filed an annual report
• Has paid its franchise taxes and fees

There's a good chance you'll need to obtain a Certificate of Good Standing from time to time during the life of your business. Many companies request a Certificate of Good Standing occasionally for their own records. A Certificate of Good Standing may also be required by:

• State governments, if you're applying for foreign qualification there
• Lenders, when you're trying to obtain financing
• Banks, for certain transactions
• Potential business partners or investors
• Doing business overseas

You may need to present your Certificate of Good Standing in order to renew specific licenses or permits, and a Certificate of Good Standing is also important evidence when it comes time to sell your business.

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