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Certificate of Good Standing in Texas

Certificate of Good Standing in Texas

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93% of business executives agree that building and maintaining trust improves the bottom line. However, this task is easier said than done. Not only does it take a huge effort, but it also takes time.

However, a relatively simple way to build that trust is to get certifications, as they’re confirmations and validations from official organizations. For example, there’s the certificate of good standing, which is available in all states.

Want to hear more? This article explains what this document is and how you can get a certificate of good standing in Texas.

What’s a Certificate of Good Standing?

“Certificate of good standing” is actually an outdated term in the state of Texas, although it’s still used in most other states. Today, it’s known as a “certificate of account status”.

This is an official document that’s usually issued by the Secretary of State. But in Texas, you’ll get it from the comptroller. The document is proof that your business has filed all of its reports and paid its fees, which means that it’s cleared to do business in Texas.

It’s not mandatory to have a certificate of good standing. However, it’s a key document for establishing and building trust. Here are some situations in which you’d probably be requested to get a certificate of account status.

Getting Business Loans and Financing

Lenders want to have peace of mind knowing that you’re reliable and trustworthy. Otherwise, you could run away with a large amount of money.

This is why it’s common for lenders to require a TX certificate of good standing (certificate of account status) as part of the loan application process. This ensures that your company’s in good standing and has no outstanding state compliance issues.

The same goes for opening a business bank account. The financial institute can confirm the legal status of your company with this document.

Renewing Business Licenses and Permits

You might be able to get away with non-compliance if you currently have valid business licenses and permits. If there were no requirements for renewals, then you could keep neglecting these responsibilities with no consequences.

Some licensing authorities may ask for a certificate of account status to verify that your business is current with state filings and taxes. Only with this verification will they let you renew.

Doing Contract Bidding and Government Contracts

Like lenders, clients (including the government) want to know that they can trust you with their money. For reassurance, clients may ask for a certificate of account status to prove that your company’s legitimate and compliant.

Having this document is advantageous though. If you have it ready, then it can be what makes you stand out from your competition.

Performing Mergers and Acquisitions

This is similar to the previous section in that you’re entering a contract with other important stakeholders. You won’t want to go into business with a company that has loose ends, so it’s standard for this document to be requested. This can happen with vendors and suppliers too, as well as investors.

Expanding to Other States

The expansion to other states is called “foreign qualification,” even though you’d still be in the same country.

Of course, the new states will want to make sure you’re in good standing before allowing you to do business. So don’t be surprised if they ask for a certificate of account status to register as a foreign entity.

How to Get a Certificate of Good Standing in Texas

You can request a State of Texas certificate of good standing (aka certificate of account status) if you’re sure that your company has filed all its tax returns and paid all relevant fees. Otherwise, it’ll be a waste of time, as you’ll be denied.

If you don’t already have an LLC or corporation, then use our business registration service. We detail all the services you’ll get and what prices you’ll pay so you know exactly what to expect.

Those who have an existing company in Texas can follow these steps.

Use the Texas Comptroller’s Website

On the Texas Comptroller of Public Accounts page, you can do a taxable entity search. You can either input the 11-digit Comptroller’s Taxpayer Number or the 9-digit federal employer identification number (EIN). Other choices include the entity name or file number, which is assigned by the Texas Secretary of State.

On the results page, find your business and click on “Details” on the left. On the popup, click on “Obtain a certification for filings with the Secretary of State.”

The next page will tell you that you can request certificates of account status by using the comptroller’s online system, Webfile. Here, you’ll need to create a profile to make the request.

How Long Is the Certificate Valid For?

Generally speaking, your certificate doesn’t have an expiration date. However, requesters will understandably want an up-to-date document. This means that typically, certificates older than 30-90 days may be considered too old for its purposes, and you’ll probably have to get a new one.

Get a Certificate of Good Standing in Texas

It may not be mandatory, but a certificate of good standing in Texas is smart to have. 

It’s a good idea to request one beforehand if you’re hitting company milestones, such as applying for loans, looking for investors, or signing mergers. The document proves that your business is compliant and that you’re responsible, so it can back up your reputation. 

Sign up with Business Anywhere now if you’d like to start your own business. It’ll take mere days for us to process your paperwork.

About Author

Picture of Rick Mak

Rick Mak

Rick Mak is a 30-year veteran businessman, having started, bought, and/or sold more than a dozen companies. He has bachelor's degrees in International Business, Finance, and Economics, with masters in both Entrepreneurship and International Law. He has spoken at hundreds of conferences around the world during his career on entrepreneurship, international tax law, asset protection, and company structure. Business Anywhere Editorial Guidelines

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