Certificate of Good Standing vs. Certificate of Existence

Submitted by UCS on June 13, 2014

A Certificate of Good Standing or a Certificate of Existence is used by a business entity to prove that they are incorporated and legally authorized to do business in a particular state or jurisdiction.   Generally speaking, a Certificate of Good Standing will show that the entity does not owe any outstanding taxes, fees or penalties to the State. It can also reflect that the entity has not filed for dissolution, has adequate registered agent service, and that the most recent annual reports have been filed with the State.

A number of states do not issue a Certificate of Good Standing that attests to the status of the entity, but instead issue certificates that verify only that the entity exists on the State’s records. These are sometimes called Certificate of Existence, Subsistence Certificate or a Certificate of Fact.  

In addition to the different vernacular there are also different types of good standing certificates you can obtain.   In most cases you will probably only need a short form good standing.  The short form is exactly how it sounds; it’s a quick view of the entity’s profile in that state.  The Certificate gives the entity’s basic information such as the name, the status with the State and displays the seal of the Secretary of State.  In most cases, it will give the date of incorporation or qualification and in some instances for qualifications; it will refer to the domestic or home state.

There is a second type of good standing you can obtain and it is called a long form certificate of good standing.  Generally a long form good standing certificate will have all of the information that a short form contains but will also reference all documents that have been filed for that entity.  The long form good standing certificate essentially gives the corporate history of the entity in a certificate format.  Most states charge a higher fee for a long form good standing, may take a bit longer to obtain and not every state issues a long form good standing certificate.  It’s important to note that certified copies of the documents listed are not automatically attached and must be requested separately. Note, not all states offer a long form good standing certificate.

There are a few States such as California that offer a Certificate of Listing that will reference all the documents on file for an entity but will not indicate the company’s status.  This certificate combined with a Certificate of Good Standing will give you the same information as if you had obtained a long form good standing certificate.

It is important to remember that in most cases when obtaining a certificate of good standing for an entity that the status only relates to the company’s compliance with the Secretary of State statutory requirements for good standing and generally does not included any Department of Revenue tax obligations the entity may have.    There are some States such as Delaware that will provide certain tax information on the good standing but for the most part an additional search is required with the Department of Revenue to obtain tax status.

There are a few States such as New York, Pennsylvania and Texas where a tax status can be easily obtained without consent.  For most states, tax information is confidential and company consent is required.

Many times, closer to the closing, a client will order bring down good standings. To retrieve information on the status of a company the Client Service Representative (CSR) will contact the listed states and obtain verbal confirmation of the status.  The CSR will then create a letter stating the entity name, date of the call and the status. Good standing certificates are valid for a limited amount of time and should a closing be delayed, many clients re-order the good standings closer to the closing date.

As you can see ordering a good standing not always as cut and dry as you may think.  It is important to know ahead of time what you will be using the certificate for so that the correct certificate is obtained.

Contact us for assistance or call your Client Service Representative at 800-899-8648 for more information on ordering Good Standing Certificates for your next closing.