Certificate of Good Standing

A Certificate of Good Standing is the state-issued document confirming a corporation or LLC is properly registered, current on filings, and authorized to do business. Also called a Certificate of Existence, Certificate of Status, or Certificate of Authorization depending on the state, it is commonly required during fundraising due diligence, M&A processes, foreign qualification in additional states, opening business bank accounts, and certain commercial contracts where counterparties want to verify the entity is in good standing. It is the "proof of compliance" document that surfaces during transactions and reveals any administrative debt the company has accumulated.

The basics: each state's Secretary of State office issues Certificates of Good Standing for entities formed in or qualified to do business in that state. The certificate confirms the entity exists, is current on filings (annual reports, franchise tax payments, registered agent designations), and has not been administratively dissolved or had its authority to do business revoked. Costs and turnaround: Delaware charges $50 for a basic certificate, $200 to $300 for expedited service; California charges $5 plus additional fees for certified copies; most states fall in the $10 to $50 range. Turnaround varies: Delaware online same-day; most other states 1 to 10 business days; expedited options 1 to 2 days for an additional fee. When you need one: at every venture fundraising round (investor counsel typically requires recent certificates from state of incorporation and every state where qualified), at M&A closing (acquirer's counsel requires fresh certificates), when foreign-qualifying in a new state (the new state often requires a certificate from the home state to confirm the entity is in good standing there), opening business bank accounts (banks often require this), and signing major commercial contracts (large counterparties may require it). The certificate is dated and considered current only for 30 to 90 days depending on the transaction's requirements.

What founders get wrong: Letting Delaware franchise tax or annual reports lapse, then discovering at fundraising diligence that the Certificate of Good Standing won't issue. The fix (back-paying franchise tax, filing missed annual reports, restoring good standing) takes 1 to 4 weeks and slows the entire fundraise. Stay current proactively.

Related: Incorporation · Foreign Qualification · Delaware C-Corp · Registered Agent

FAQ

What is a Certificate of Good Standing?
A state-issued document confirming that a corporation or LLC is properly registered with the state, current on annual reports and franchise taxes, and legally authorized to do business. Also called a Certificate of Existence, Certificate of Status, or Certificate of Authorization depending on the state.

When do I need a Certificate of Good Standing?
At venture fundraising rounds (investor counsel requires recent certificates), at M&A closing (acquirer's counsel requires fresh certificates), when foreign-qualifying in a new state, opening business bank accounts, and signing major commercial contracts with large counterparties.

How much does a Certificate of Good Standing cost?
Delaware: $50 standard, $200-$300 expedited. California: $5 plus additional fees. Most states $10-$50. Turnaround: Delaware online same-day; most other states 1-10 business days; expedited options 1-2 days. The certificate is typically considered current for 30-90 days depending on the transaction.