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How to Stay in Good Standing with Your Secretary of State’s Office

Everything is going smoothly with your business. But did you know if you aren’t in good standing with your Secretary of State’s office, you could be putting your business at risk? Any corporation, Limited Liability Company (LLC) or Limited Liability Partnership (LLP) must take certain steps to stay in good standing.

Why is good standing important?

Staying in good standing with your Secretary of State’s office is vital. A Certificate of Good Standing (which may be called a “Certificate of Existence,” “Certificate of Authorization,” “Certificate of Status” or “Certificate of Fact” depending on which state your business is in) is required in many situations during the life of your business, including:

  •   Obtaining or renewing business licenses or permits
  •   Registering to do business in other states
  •   Opening a bank account, applying for a loan or other financial actions
  •   Selling your business

A Certificate of Good Standing is also an important protection if your business is ever sued, because it proves that you are following the rules of being a corporation/LLC/LLP. If you aren’t in compliance, the plaintiff could argue that your corporate shield has been pierced and that you personally are liable for any damages, putting your personal assets at risk.

What is a Certificate of Good Standing?

A Certificate of Good Standing is a document proving your business has met all of the compliance requirements for the state in which it’s registered, including paying all required fees and taxes and filing necessary paperwork, and is authorized to do business there.

How do I earn good standing?

In most states, qualifying for a certificate of Good Standing requires that you:

  •   File an annual report (sometimes called a “Statement of Information”) with your Secretary of State’s office
  •   Pay all relevant state fees

You can find all of the information and steps for meeting these requirements at the website for your Secretary of State. It’s a good idea to set an annual reminder on your calendar giving yourself plenty of notice when each item is due.

In addition to these three basic tasks, you should also follow these steps:

  • Maintain good corporate records. No matter how small your company is, hold the required annual meetings (shareholders, board of directors, etc.) and keep minutes of all meetings as well as any corporate resolutions. These records will protect you in the case of any effort to pierce the corporate shield.
  • Notify your Secretary of State’s office of any changes to your business. Changes to the corporation or LLC/LLP require notifying the state by filing an “amendment.” This might include changing your business address, changing your name, or an owner leaving or joining the business.
  • Get qualified before doing business out of state. Whenever you do business in a state outside of the state where your business was formed, you first have to qualify as a “foreign” corporation or LLC/LLP there. Contact that state’s secretary of state’s office for more information on how to do this.
  • File a DBA if needed. If you are conducting business under a name different than your corporate or LLC/LLP name, you have to file a DBA (“doing business as”), typically with your state or county. For example, my business is SMB Connects Corp. DBA GrowBiz Media.

To find out your specific requirements for remaining in good standing, visit the SBA website for links to the Secretary of State’s office in all 50 states.



Rieva Lesonsky

Rieva Lesonsky

Contributor at Fundera
Rieva Lesonsky is a small business contributor for Fundera and CEO of GrowBiz Media, a media company. She has spent 30+ years covering, consulting and speaking to small businesses owners and entrepreneurs.
Rieva Lesonsky