As of 2024, California is still the world’s fifth-largest economy, which is quite impressive for a state to achieve on its own. This has lots of people interested in business here, and you might be one of them.
However, before you start your journey as an entrepreneur, you should learn about the documents you may have to deal with. One example is the certificate of good standing in California.
What is this paper, when would you need it, and how can you get this certificate? Read on to find out more.
What’s a Certificate of Good Standing?
A certificate of good standing is solid proof that your business was legally formed. It also proves that you’ve followed all state-imposed obligations, such as paying all necessary fees and filing annual reports. This document officially certifies that your company can legally operate in California since the government is responsible for issuing it.
In California, and some other states, a certificate of good standing is actually called a “certificate of status.” Another name for it is “certificate of existence.”
While there’s not a huge chance you’ll need a certificate of good standing right away, someone will probably request one from you later. Here are the circumstances that may warrant this document.
Making Financial Moves
It’s good practice to separate your business and personal finances, so naturally, you’d apply for a business bank account. Financial institutions will usually ask for a certificate of good standing; you can expect the same if you apply for loans too.
Getting Investors and Partnerships
No one wants to invest time and money into something that isn’t likely to work. This is why it’s common for investors, partners, and shareholders to request a certificate of good standing. This document will prove to them that you’re trustworthy and responsible.
Applying for Licenses and Permits
Licenses and permits allow businesses to carry out certain actions, so governments will want to ensure that they’re compliant first. Not only will they ask you to produce a certificate upon applying, but also when renewing.
Doing Business in Other States
Doing business in other states is technically considered “foreign qualification.” To qualify, you’ll have to submit a certificate of good standing to the other states. They’ll want to check that you’re compliant in your own state (California) before allowing you to expand to theirs.
How to Get a Certificate of Good Standing in California
To get a State of California certificate of good standing, you must first be compliant with state laws and be up-to-date with all reports and fees. If you aren’t sure this is the case for your company, then check with legal and tax professionals.
If you need to get a business up and running before even thinking of this document, then use our business registration service. We can get your Californian corporation or limited liability company (LLC) registered in as short as a few working days.
Are you now at the step where you can request a certificate of good standing? Then follow the bellow steps.
Use the Secretary of State’s Website
The Secretary of State is typically responsible for business registrations, so it makes sense that you’d ask for this paper on their website. More specifically, you’ll go to bizfile Online. Click on “Free business search & copies” to get started.
On the business search page, look for your company either by name or file number. Find your business on the results page, and click on it to place and complete your order. It’ll cost you $5.00 to get a certificate, and you’ll receive it immediately as a PDF file.
Write the Secretary of State
Those who prefer offline methods can write the Secretary of State instead. You’ll use the Business Entities Records – Order Form.
Fill out the form and include a self-addressed envelope, as well as your daytime phone number in your cover letter. You should also include your payment for the document ($5.00); it should be check or money order payable to the Secretary of State, not cash.
Request in Person
If you’re in a hurry, you can always request the certificate in person. You’ll still use the same order form from the previous section, but you’d drop it off (along with the payment) at 1500 11th Street, 3rd floor, Room 380, Sacramento, CA 95814.
Do note that this method will cost $10.00 extra. However, the fee is worth it since the office prioritizes drop-off orders over mail-in ones.
When Does a CA Certificate of Good Standing Expire?
There’s no official expiration date placed on your certificate of status in California. But a general rule of thumb is that if your paper is over 30-90 days old, it won’t be any good to you.
Keep in mind that when third parties request this certificate, they want recent proof that your company is compliant. So while a year-old document is still technically valid, they’ll probably want to see something much more recent.
If you’re ever uncertain whether your certificate of status is too old, ask the requestor. They’ll give you a clear-cut answer and you can get a new document if needed.
Know How to Get a Certificate of Good Standing in California
A certificate of good standing in California is something most small business owners will have to get at some point.
In the beginning, you probably won’t have to contact the Secretary of State for one, but it’s good to know how to. When you inevitably need to prove your company’s compliant, you’ll know the proper channels to go through to secure that paper.
Sign up with Business Anywhere to take advantage of our comprehensive services for entrepreneurs. Our business registration services are FREE, and you can choose only the essential add-ons that you need, so you don’t have to spend a fortune to begin your business empire.
