5 Reasons To Get a Certificate of Good Standing

Establishing a business is no child's play. It requires strenuous hard work, strong determination, and solid resistance to build a business. One needs to complete a list of requirements before reaching the final stage of completion. One should note that many owners do not follow a mandatory course of action. In this regard, many owners may opt-out of securing documents deemed necessary for the success of a firm's smooth running. 

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However, those with an ambitious drive try to secure documents for a registered office address for a limited company in UK. Documents like the Certificate of Good Standing to stay relevant in their work line. It is an important document that aids entities during various engagements. 

What is a Certificate of Good Standing?

While it is not mandatory universally, the Certificate of Good Standing still has actual merit to it:

  • This document aids in establishing your business as a legitimate enterprise.
  • It offers assistance in the legal aspects of authorizing a business.
  • It mandates that the Company remains mindful of state filings and other standards.
  • It serves as evidence that the Company exists and is allowed to do business in the state. 

Five Reasons to Get a Certificate of Good Standing

As has been highlighted earlier, it is not mandatory to issue this certificate. It means, not everyone is required to obtain it. Additionally, registration laws vary from state to state, and while some states may demand a Certificate of Long Standing, it may not be deemed consequential in others. 

 Listed below are five reasons for a company to get a Certificate of Good Standing:

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Allows you to operate a business bank account

Companies require a Certificate of Good Standing to open a business bank account. To accept bank card purchases on your sales, you'll need a bank (merchant), which means you'll need to open a business bank account as the first step. You might need a company bank account for your point of sale system if you have a retail business. Moreover, one needs to keep the company looking professional at all times.

Helps expand your Company to the Other States

Following the formation of a corporation, limited liability company (LLC), or other organization, the entity must retain "good standing" in state records, expanding the business. Your goods and services get exposed to a broader audience as a result of business expansion. Increasing your customer base would allow you to convert more leads and increase your revenue. Profits will increase as a result of this. 

Aids With Seeking funding from Investors

Issuing a Certificate of Good Standing will establish your Company as one possessing premium qualities. It, in turn, will attract investors with a desire to help a business grow. The capital (or money) you have access to will offer you an edge in finding and securing investment in your small business. This money is for various purposes like building your website, advertising, upgrading your tools, renting a workspace or store, and developing your website.

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Avoid State-Sanctioned Fines and Penalties

It is not unbeknownst to us that staying compliant with ever-changing regulations is a necessary business imperative. Failing to do so can place companies in a bind. A Good Standing document pushes one to remain vigilant of rules and regulations. At the corporate level, compliance entails following a slew of rules, regulations, laws, and standards to safeguard your company’s aspects. A company must follow all local, state, and federal laws at all times. 

Helps in Purchasing Small Business Insurance 

The most significant advantage of having small business insurance is that you get protected from liability. Small business insurance will also cover the cost of lost or stolen equipment or products. Moreover, small business insurance against natural disasters protects the properties and inventory if destroyed by natural disasters such as floods or earthquakes. 

There are many benefits of possessing a Good Standing Certificate. The reasons mentioned above are not exhaustive of the entire list. Let's figure out the situations under which this certificate is mandatory:

  • As has been highlighted earlier, you will need to produce the said certificate if demanded by an individual or Company with whom you have a business relationship. Be prepared the next time you choose to open a business bank account, set up customer credit or debit card processing, or apply for credit in the Company's name.
  • You apply to register the Company as a foreign corporation in another state. It is usual for a state to request a good standing certificate from the state where the Company was founded to register a foreign corporation. 


The Secretary of State grants a Certificate of Good Standing after a few conditions suffice. A Company becomes a legal entity in the home territory. It is not in violation of any corporate policies, the state cannot suspend the Company, and before submission, all taxes and other financial commitments come in order.