A certificate of good standing, or certificate of existence, shows that a business has paid taxes, filed required documents, and otherwise complied with regulations in the business’s state of formation. You can obtain a certificate of good standing from your state’s business filing agency. It might be required when opening a business bank account, applying for a loan, or raising funds from investors.

A certificate of good standing verifies that a business is legally registered with the state and is authorized to do business there. This certificate is a physical document that you would acquire from the state agency where you register your business entity type.

There are several situations where you might be asked to show a certificate of good standing:

• When opening a business bank account

• When applying for small business insurance

• When purchasing or selling real estate

• When trying to form a contract with a new supplier or other company

• When applying for a government contract or government-backed business loan (e.g. an SBA loan)

• When registering to do business in a state other than your state of formation