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