Simply put, a certificate of good standing in California is proof that a limited liability company (LLC) or corporation has been legally constituted and properly maintained. Basically, having a Certificate of Status (COS), also known as a Certificate of Good Standing or Certificate of Existence, is required if you want to create or transfer an existing business in another state. This certificate certifies that your company is legitimate and that it is operating in accordance with all relevant laws. Also, when applying for a loan or selling your business, you may need a Certificate of Occupancy (COS). The Secretary of State can issue you a California Certificate of Good Standing if you follow the steps outlined below.
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How to Get a Certificate of Good Standing in California: Overview
It is possible that, for a variety of business or legal reasons, you will need to formally demonstrate that you are registered to do business in California. Obtaining a Certificate of Good Standing demonstrates that your business is in full compliance with all applicable state regulations.
For a Certificate of Good Standing in California, you must file a records request with the office of the Secretary of State to process. A certificate carrying the seal of the state of California and the signature of the Secretary of State would be issued if your firm is in good standing.
Furthermore, to prove that your firm has been suspended or dissolved, you can use the status request to establish that it is in a bad state. In some cases, you may need to get certified information on a business other than your own.
All of the filings for a business, including the initial articles of incorporation and the original registration if it is from another state as well as any subsequent conversions or modifications, can be ordered as a certified collection.
Certificate of Good Standing in California, Explained
A California Certificate of Status certifies that the following is true of your company:
- Your company has been officially recognized as a legal entity in the state of California.
- The Franchise Tax Board has not put a halt to it.
- Your company is permitted to conduct business in the state of California.
On the other hand, the usual course of business does not necessitate the acquisition of a Certificate of Status. You may require one in the following situations:
- Finding a bank that will provide you a new line of credit
- Creating a new bank account for your business
- Investing in business insurance
- Contracting with the government or another company
- Transferring or selling off a portion of your business.
- Exemptions and licenses that need to be renewed
- Establishing a new location for your enterprise
Furthermore, to be eligible for a California COS, you must be a recognized state organization. Certificates of Status are mostly requested by corporations and LLCs (limited liability companies), two of the most common types of business entities. Conversely, nonprofits and limited partnerships both may occasionally require one. But because sole proprietorships are not required to register with the state, you will be unable to get a Certificate of Good Standing.
When Do You Need a Certificate of Good Standing in California as an LLC or Corporation?
A Certificate of Good Standing may be required for mergers and acquisitions, as well as if you’re purchasing or selling a business. Certification of Good Standing is an important step for any business.
Also, if you’re asking for a company loan or line of credit, you’ll typically need to show proof of good standing.
To be on good terms with California, you must not be in violation of any tax process, but you can owe taxes and still be in good standing with that state. In some cases, a good standing certification may also be required for licensing purposes.
The most common use of a Certificate of Good Standing is to apply for a business license in a different state. Documentation expiration dates must be factored into your calculations.
A certified status must be fewer than 30 days old in some states, while it can be up to 60 days in others.
Certificate of Good Standing or Certificate of Status?
Other countries may refer to the Certificate of Good Standing as a Certificate of Status or an Existence Certificate. California’s Franchise Tax Board does not suspend an entity’s registration to do business if it is in conformity with applicable corporate regulations and licensing requirements and has not been revoked.
Do I Need a Certificate of Good Standing in California as an LLC or Corporation?
Even though you don’t need a certificate of good standing to run a business in California as an LLC or corporation, there are a number of circumstances in which you may need one. Among them are:
- Investing in commercial insurance
- submitting an application for a business loan
- Account opening in the name of a business
- Obtaining a business license in another state
How to Get a Certificate of Good Standing in California
Prior to submitting, verify that your business is in compliance with all applicable state laws. This suggests that your business is as follows:
- All your state, federal, and local taxes are up to date. Payroll taxes and unemployment insurance are included in this calculation.
- The Secretary of State has received and processed your company’s annual report (called a “Statement of Information” in California). This includes any past years’ reports that you may have forgotten to file.
- Be up-to-date on all state license and fee requirements. All of your attorneys must be in good standing with the California State Bar Association if your business is a law firm.
Read Also: Is California a No Fault State?
Step-by-Step Process
As earlier mentioned, requesting a certificate of status, also known as a certificate of good standing in California, from the state’s secretary of state will get you one.
However, obtaining a certificate of good standing is a two-step process.
- Maintaining the legality of your LLC
- Ordering Your Certificate of Good Standing
The First Step Is to Ensure That Your California Company Is Legally Compliant
To be eligible for a certificate of status in California, your firm must be in conformity with the state’s rules and regulations.
Permits and Licenses
A business in California must be licensed by the federal government, the state, and local jurisdictions. Regulations such as health and building permits are examples.
The California CalGold website provides information on state licensing requirements.
Taxes levied by the state
Depending on the nature of your business, you may be required to pay a variety of California state taxes. Sales tax, withholding tax, and Unemployment Insurance (UI) tax are all examples of this.
The state of California also imposes a yearly franchise fee on enterprises. To get started, you’ll need at least $800.
Quarterly Reports
A statement of information is required for all California corporations and limited liability companies. Over the past two years, your company’s finances have been summarized in this document.
You can file this report online, via mail, or in person every two years with the Secretary of State. However, there is a $20 filing fee.
In the second step, order your California Certificate of Good Standing
The Secretary of State will issue you a California certificate of status if your company continues to comply with state regulations. This can be done in person or over the mail.
The Secretary of State accepts orders via mail or in person.
In-person filing is $15, whereas mailing a document costs $5.
Obtaining your Certificate of Good Standing in California as an LLC or Corporation
The Secretary of State of California issues your Certificate of Good Standing or Status. The form can be downloaded, printed, filled out, and mailed in with the necessary fees, as long as the fees are paid. Here’s what you’ll need to include:
Requester Information
The first box asks for the requester’s details. The Certificate of Status should be sent to your home address. When obtaining a copy of a record, you may provide this information. If the Secretary of State wants to get in touch with you, make sure you include your phone number.
Return Method Requested
Filling out this form in person at the Sacramento office allows you to specify how you wish to receive your Certificate of Status. Pickup or delivery is available, generally the following business day.
Business Name
Ensure you fill out Box 2 with the exact name of your company as it appears on the Articles of Incorporation. Include the Secretary of State’s Entity or File Number.
If your Articles of Incorporation were processed, this information should have been included in the correspondence you got afterward. This number is optional, but it will expedite the process of receiving your Certificate of Status.
In addition, indicate the type of business you run by checking the appropriate option.
Report Copies
You can use this box to place orders for a variety of reports related to your company.
For a fee, you can get a printed copy of your company’s articles of incorporation, amendments, and more. This field can be left blank. Ordering copies of these documents for the purpose of obtaining your Certificate of Status isn’t necessary in the vast majority of cases.
Certificate Requests
The California Certificate of Status can be requested at this point. If you’re dealing with various agencies or organizations, you can order multiple copies. Fill out the far right column with the quantity of certificates you want.
Fax Number
Prior to receiving your certified paper copies, you can request a fax copy of your Certificate of Status.
In the space provided, enter the fax number. Keep in mind that receiving these faxes will cost you $5 or $10.
Calculate Fees
Fill up the fee schedule in the lower right box. The costs are clearly stated on the application. Verify that the charge schedule is complete and accurate. Fees can be paid to the Secretary of State of California with a check or money order.
Alternatively, if you’re submitting your paperwork in person, you can pay with a credit or debit card. But while filing in person expedites the procedure, the additional $10 processing fee is required.
Filing Your Request
There are two ways to submit the form after you’ve finished filling it out. There is currently no way to seek a Certificate of Status from the California Secretary of State via email or online.
The following address is where you can send your request form by postal mail:
Secretary of State
BE Certification and Records
P.O. Box 944260
Sacramento, CA 94244-2600
However, if you’d prefer to file this in person, you can drop off the form at:
1500 11th St., 3rd floor, Room 380
Sacramento, CA 95814
Processing Times
Requests for Certificates of Status made in person will be processed the following working day. You must return to the same location to retrieve it.
Any other way of requesting certificates of status will be processed within one or two business days after receiving the request in writing by postal mail. After that, you’ll have to wait for the certificate to be mailed back to you.
Receiving Your Certificate
Verify the validity of your Certificate of Status once you’ve received it. The validity of a certificate is determined by the entity or jurisdiction issuing it. Return the certificate to the parties seeking it if it is valid. This will almost always be done via postal mail. Make sure the mailing address is correct before you send it out.”
