Certificate of good standing: when you need one, when you don't
A short, official-looking piece of paper that opens bank accounts, lands contracts, and sometimes saves a deal.
A certificate of good standing — sometimes called a certificate of compliance, a certificate of existence, or, in Texas, a certificate of fact — is a state-issued letter that confirms three small but important things about your LLC:
- It is currently registered with the state.
- It has filed everything the state requires of it.
- It has paid every fee that the state has billed it for.
Who asks for one
You don't need a certificate of good standing to operate. You need one when a third party — usually a bank, a landlord, a licensing board, or a buyer — wants proof that they're dealing with a real, current business. Common moments:
- Opening a business bank account. Many banks ask for one alongside your EIN letter, especially if the account is opening more than 90 days after formation.
- Signing a commercial lease. Landlords for nicer spaces will often request a fresh certificate before handing over keys.
- Registering to do business in another state. The other state needs to know you exist back home before it lets you operate there.
- Selling the business or taking on a partner. Due diligence almost always includes a certificate, dated within 30 to 60 days.
- Bidding on government or institutional contracts. Procurement officers want recent proof of compliance.
The "freshness" rule
A certificate of good standing is a snapshot in time. Most recipients want one dated within the last 30, 60, or 90 days, depending on what they're using it for. Don't bother saving an old one in a drawer — pull a new one when the moment calls for it.
If you can't get one
If the state refuses to issue a certificate, that's a signal. Usually it means an annual report is late, a franchise tax is unpaid, or your registered agent is no longer valid. The fix is rarely complicated. The cost of ignoring the signal usually is.