No, you don’t always need a certificate of status for your LLC; however, note that this document helps to establish your LLC as a legitimate venture.
A certificate of status certifies that a company is duly registered with the state, is up to date on all state registration fees and all necessary document filings, and is legally allowed to carry out business activities in the state. In some states, it is called a certificate of good standing or a certificate of existence.
A certificate of status is not the same as a business or occupational license. Without obtaining a certificate of status, a company may still carry out business activities, though you may be asked to provide a certificate of status for your company at some point. Owing to that, it is pertinent to check your entity’s status with the state on a regular basis, most preferably monthly.
Note that doing this for your LLC manually could be time-consuming, but it is well worth it. Various management software are available to help you monitor your good standing status. Aside from that, you can leverage a full-service registered agent to help you monitor your entity.
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Situations You Might Need a Certificate of Status For Your LLC
While you are not requested to have a Certificate of Status to conduct business in your state legally, you may need one if you are in any of the following situations:
- Vying for a government contract
- Opening a business bank account
- Insuring your business
- Funding your business
- Looking to attract potential business partners
- Establishing a contract with another company
- Registering to do business in another state
- Renewing certain licenses and permits
- Selling your business
- Setting up a system that will allow you to process credit or debit payments
How to Obtain a Certificate of Status for Your LLC
An LLC only requires a certificate of status when it is asked for one. To get a certificate of status for your LLC, here are the necessary steps to take;
Ensure your business satisfies the other requirements
To obtain a certificate of status anywhere in the United States, your company must also be “in status” in that particular state. Although the necessary requirements will vary from state to state, it generally means that:
- You are current on all your taxes and fees
- You have filed all necessary reports
In most states, as long as your company is registered with the state, you can check its status online—must often with your state’s business filing agency.
Request a certificate from your state’s business filing agency
As long as your business meets all necessary requirements for the certificate, you can request a certificate of status from the business filing agency in your state.
Most often, this is your secretary of state office (or one of its subdivisions) or the equivalent agency that is tasked with the filing of entities and maintaining state records. Depending on your state, you may be able to request a certificate in person, online, over the phone, or by mail, email, or fax.
Ensure the certificate of status is valid for your specific use case
Certificates of the status usually have expiration dates, and they will mostly vary by state and purpose. For instance, one lender may require a certificate no older than 60 days, while another may accept one that is up to a year old. Certificates are often valid for up to 90 days. You can check with the location that requested the certificate to see if yours is still valid.
If you intend to do business in a state you aren’t registered in, also note that you may be asked to register in that state as a foreign entity and make available a certificate of status from your home state. Have it in mind that varying states may request that your certificate is dated within a stipulated frame of time, therefore be sure your certificate is valid before filing with that state. Here are some of the varying states’ requirements:
- Less than 30 days old: Arkansas, Washington D.C., Michigan, New Jersey, New Mexico, South Carolina, Vermont, and Wyoming
- Less than 60 days old: Arizona, Hawaii, Illinois (for LLCs), Indiana, Missouri, Nebraska (for corporations), New Hampshire, Oklahoma, Oregon, Rhode Island, Tennessee, and Wisconsin
- Less than 90 days old: Connecticut, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Nevada, North Dakota, Ohio, South Dakota, and Washington
- Less than 6 months old: California, Delaware, Mississippi, Montana, Nebraska (for LLCs), and North Carolina
- Less than a year old: New York and West Virginia
- Doesn’t require a certificate: Alaska, Colorado, Kentucky, Minnesota, Pennsylvania, Texas, and Alabama (for LLCs)
Even as certificates of good standing are not necessary for business owners, specific businesses may require one. Certificates of Status more or less include the entity’s name, a brief clause stating that the entity is permitted to do business in the jurisdiction and is completely reliant on the jurisdiction where it was obtained, and it may also be on specific ornamental paper or have an ornamental embossed seal of some kind to prove its authenticity.