Small business taxes can be tough to keep up with, especially if you’re running things on your own. Getting everything squared away is no easy feat, so if you’ve managed to do it, you should be proud.
Not only does being compliant keep you out of legal trouble, but it also gives you a better reputation. It opens the door to more opportunities, meaning it’s a badge of pride you should wear.
One way to do this is to get a Delaware certificate of good standing if your company’s in this state. In this article, we’ll discuss what this document is and how you can get one.
What’s a Certificate of Good Standing?
A certificate of good standing is also known as a certificate of status or certificate of existence. In most states, this official document is given out by the Secretary of State. However, there are some states (like Delaware) where another government official is responsible for certificates of good standing.
Regardless of which authority issues the certificate, the idea is the same: it’ll verify that your company is in good standing. What this means is that you’ve paid your taxes and fees, as well as filed all reports, such as your annual reports.
A certificate of good standing typically isn’t legally required to keep your business running. However, there are a few circumstances where you may need to request one.
Banking and Financing
Financial institutions often require a certificate of good standing when you open a business bank account. This may also be the case if you apply for a loan. This certificate shows that you’re legally compliant and in good standing with the state of Delaware, so it gives them more confidence that you’ll be responsible with your finances.
Business Transactions
Will your company deal with mergers, acquisitions, or any other significant business transactions? Then count on the other parties to request a certificate of good standing. They’ll want to make sure that your business is legitimate and compliant with laws.
Licensing and Permits
There are certain business and licenses that’ll require you to provide a certificate of good standing. For example, many who are in regulated industries may deal with this. This is to show your compliance with state regulations.
Renewals and Compliance
Some states or regulatory bodies might require periodic submissions of these certificates. As you might’ve already guessed, this is to prove that you have ongoing compliance. Once you’ve proved that, then you’ll qualify for certain renewals.
Contracts and Bids
Entering into significant contracts with other businesses or bidding for government contracts involves a great deal of trust between parties. With so many potential companies to choose from, it’s not uncommon to see requests for certificates of good standing to check credibility.
Foreign Qualification
“Foreign qualification” means qualifying to do business in another state, not outside the country. Should you want to expand your company and register in another state, you’ll usually need to give a Delaware certificate of good standing to the other state. This is a normal part of the registration process.
How to Get a Certificate of Good Standing in Delaware
Before getting started on the request process, you need to ensure that your company is actually in good standing first. Otherwise, you’ll waste time and money.
Check that you’ve filed all your annual reports and paid all necessary franchise taxes. Upon confirmation, you can then proceed. Make sure you have your company’s official name as registered, as well as its file number. You can find the latter in previous filings or by searching the Delaware Division of Corporations’ database.
If, at this point, you don’t have an open business yet, then consider using our business registration service. Not only is it affordable, but it’s also fast.
Access the Delaware Division of Corporations Website
Get on the Delaware Division of Corporations’ website and navigate to eCorp Business Services. From there, click on “Document Filing and Certificate Request.” Do note that this page is only available from 7:45 am to 11:59 pm EST from Monday through Thursday, and on Friday from 7:45 am to 10:30 pm EST; it’s unavailable during weekends and state holidays.
Once you’ve accessed the request form, enter your company’s information. Select “certificate of good standing” for the type needed.
If you want a short-form certificate, it’ll cost $50; for a long-form certificate, it’ll cost $175. The latter states that all your documents have been filed and lists any name changes if applicable.
Same-day expedited services cost $50 and $80, respectively. 24-hour expedited services cost $40 and $60, respectively.
Use a Certification Request Memo
Would you rather request a certificate of good standing by mail? Then use the Certification Request Memo.
You can get priority 1 (one hour) or priority 2 (two hours) expedited processing. The former costs $1,000 and the latter costs $500. The same fees from above apply for same-day and 24-hour expedited processing.
How Long is a DE Certificate of Good Standing Good For?
There’s no actual expiration date on a DE certificate of good standing. However, its practical validity usually ranges from 60 to 90 days from the date it’s issued.
In general, the validity period will depend on the requesting party’s requirements. For instance, financial institutions typically request the period from above.
To be certain, it’s always a good idea to check with the requesting party to ensure your document is recent enough.
Get a Delaware Certificate of Good Standing
To prove that you’re responsible and reliable, you should get a Delaware certificate of good standing for your company. Because it’s officially from the state’s Division of Corporations, the document will hold weight and be ample proof for requesters.
The certificate of good standing doesn’t cost much to request, and it’s a simple form to fill out too. So if anyone wants a certificate from you, rest easy knowing that it won’t take much time or effort to get.
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