Building shareholder trust can be difficult, especially if you’ve only just started out as a business owner. Without trust, you can’t get anywhere. Yet people will hold you at an arm’s length if you haven’t proven yourself, so it’s a catch-22.
Luckily, there are legal documents that can prove that you’ve been a responsible and reliable entrepreneur. One that you can get is a ‘certificate of good standing’ in New Jersey.
What’s this certificate, and how can you get one? Read on to find out everything you need to know on this topic.
What’s a Certificate of Good Standing?
A certificate of good standing is also known as a certificate of existence or certificate of authorization. This is an official document issued by the state of New Jersey, and it confirms that your business is compliant with state regulations and that it’s authorized to do business in the state. Essentially, it proves that you’ve filed all relevant reports and paid all necessary fees to keep your company running.
The certificate of good standing isn’t something you need to have all the time. But it’s common for third parties to request it since they use it to establish your credibility and trustworthiness before continuing with crucial actions. Below are some examples of when you’d be expected to produce this certificate.
Business Transactions
There’s a good chance that you’ll need to take out loans to fund your business; 20% of small businesses get them, and 28% lack enough capital without taking one out.
However, financial institutions won’t just hand over money without doing their due diligence. They’ll often require a certificate of good standing as part of the documentation for business loans or other financial transactions.
You’ll also usually need to get this document if you have mergers and acquisitions, as well as if you’re talking to investors. The other party will want to see that your business is in good standing before proceeding.
Contracts and Agreements
When dealing with large sums of money with clients or vendors, they might ask for a certificate of good standing. This is to ensure that your business is legitimate and compliant with state regulations.
The same goes for if you’re bidding on or entering into contracts with federal, state, or local governments. Plus, expect it if you’re forming partnerships with other businesses.
Business Operations
If you think you can get away with not keeping up with reports and taxes, then think again. Many municipalities may ask you for one when you’re renewing business licenses or permits. So you’ll have to either be non-compliant in multiple ways, or you’ll have to stay on track with administrative work to operate legally.
Also, are you thinking of expanding your business outside of New Jersey? Then this is called foreign qualification, and you’ll likely need to provide a NJ certificate of good standing.
Legal Matters
In certain legal situations (such as lawsuits or arbitration), you might need to provide proof that your business is in good standing.
In addition, your company may also go through audits by regulatory bodies or for compliance purposes. This document may be needed to prove its status.
How to Get a Certificate of Good Standing in New Jersey
Before you get a State of New Jersey certificate of good standing, make sure you’re actually eligible. If all the necessary filings are up-to-date and all required fees are paid, then you’re surely good to go.
Don’t have an actual business yet? Then utilize our business registration service. We have experience setting up LLCs and corporations in all 50 states, so you won’t have to deal with the hard work yourself.
Now, assuming you’ve confirmed your company’s compliant, these are the steps to get your certificate of good standing.
Request It From the State of New Jersey
The State of New Jersey has these documents available on their NJ Department of the Treasury Division of Revenue and Enterprise Services page. More specifically, you have to go to their business records service page. Under “Obtain business entity information,” click on “Business entity standing certificates.”
On the next page, you can choose which search type you want. Choose from business name, entity ID, principal name (office/director, manager, managing member, etc.), registered agent, or associated name (this can be an alternate, fictitious, or previous name used). After selecting which one you want, you can type the relevant information in the box that comes up, then click on “Continue.”
When you see your company name and information on the next page, click which type of certificate you want (short form, ong form with filing history, or long form with officers). Hit “Add to cart” on the bottom, and you can then pay for the certificate and receive it.
The certificate of good standing in New Jersey costs $25 for corporate and limited partnerships. Short-form certificates for LLCs and LLPs cost $50, and long-form certificates for them cost $100.
If you want expedited services within 8.5 business hours, it’s $15 extra for corporations, non-profits, and LPs, and $25 for LLCs and LLPs. Do note that you can only get this service if you put your request in by fax, courier service, or in person.
How Long Is the Certificate Good For?
There’s technically no expiration date for the certificate of good standing. However, third parties that request it will want to see recent information, so as a rule of thumb, documents older than one to three months may not be valid. You should always check with the requester to see what they require.
Request a Certificate of Good Standing in New Jersey
You won’t always need a certificate of good standing in New Jersey, but if you want to grow your business, it’s very likely you’ll run into at least one request in the future. As you can see, third parties like lenders, vendors, and investors are likely to ask for this document.
By learning how to get a certificate of good standing now, you can get this document with ease. And as a result, this will lead to less stress and quicker proceedings.
Sign up with Business Anywhere to get started on your entrepreneurial journey. We’ll help you set up a company quickly and easily.
