5 Reasons To Consider A Good Standing Certificate For A Company

Standing Certificate

A good standing certificate (CGS) indicates that your business entity exists, is valid, and has the authority to conduct business in the stated state. The certification assures you that an entity complies with the state’s rules for conducting business; that is, has paid all fees, has all the necessary licenses, all reports filed with the Secretary of State’s office, and so on. However, a good standing certificate is not inclusive of shareholders’ details or a statement of capital. If you wish to access them, you will need to fill out a confirmation statement to date.  Due to varying entity laws between the states, the certificate of good standing has many names, such as certificate of authorization, certificate of existence, letter of good standing, and good facts. You can get the document from the state’s secretary of state office or an equivalent agency, and it is available to any business registered by the state.

Obtaining a certificate of good standing in the UK

There are various sites you may visit if you wish to get certificate of good standing in UK online. You could contact the Companies House Contact Centre and have your document processed. This is always the cheaper solution, averaging at £15. Note that the government is not responsible for courier or legislation costs; you have to cater to these yourself. Christmas and new year orders are processed by 1 pm on 24th December and 31st December; however, postal delays are inevitable over the holiday period.

Further, private companies can also assist you to obtain the document. These include the Rapid Formations Blog, Simple formations, among others. The procedure costs on average £49.99 (excl. VAT), and it takes about 5 days to process your document. In some cases, you may have the document processed within two days. Consult your service provider on Express services, which are often at an added cost. To place an order for your certificate, you will need to provide your full name, contact details, company name, registration number, delivery address, and invoice address. These are also referred to as the components of a certificate of good standing.

Why a Good Standing Certificate?

1. For self-satisfaction; that is, to have a well-organized and presentable company 

A certificate of good standing in a company proves that you are still in business since incorporation and that there are no ongoing attempts to deregister the company. Most companies stay in good standing for self-satisfaction since a good standing certificate demonstrates that a company is professional and well-organized. Therefore, staying in good standing attracts financiers, investors, and clients while simultaneously fending off incompetent competitors. A good standing certificate acts as evidence or proof that the business entity is valid and in compliance with the state.

2. To boost the confidence of interested parties  

It comes as no surprise that the document gives confidence to interested parties, such as banks, lenders, vendors, and suppliers, for business transactions and financing. Lenders require the record as a condition for a loan offer and bankers as a requirement for opening a new account. The document shows you comply with the state government’s laws, as a requirement by various stakeholders. Prospective business partners and investors need the form to present a good standing of the company. Additionally, if you decide to sell the business, it is a requirement that you provide a certificate of good character. A good place’s missing certificate raises many concerns and looks like an indication something is wrong; hence, the interested parties view your company as an increased risk. 

3. For foreign expansion

The main reason for a certificate of good standing is to conduct business abroad. A good standing certificate for foreign qualification is called a certificate of authorization, indicating that your company is allowed to perform business activities in its registered state. Therefore, if you are looking to expand your company and start a foreign branch in another state, you must register and provide a certificate of good standing to the official registrar in the county you are looking to set up. You are also required to provide the certificate of good standing of the company’s original state.

4. Losing good standing has adverse consequences  

As aforementioned, losing good standing has severe consequences, such as penalties and additional fees, lack of funding due to increased risk and tax liens, inability to expand, vulnerability to identity theft, and even the dissolution of your company. Moreover, a company cannot access the court system when it needs to sue. While it’s not in good standing, employees working for your company can be fined if they had prior knowledge of its neglect. The court can also revoke foreign qualifications once your company loses its good standing; usually, there is a given time limit for reinstatement. 


5. Saves on time and money

Research shows that staying in good standing saves  time and money. Your company saves time as all of its records are in order, and there are no problems with the law. Reinstatement after your company is found not being in good standing takes time and money. The state requires penalties, fees, and interests after your company’s records are labelled void or dissolved after being found in non-compliance. Administrative dissolution leads to additional reinstatement fees on top of the costs mentioned. Continued non-conformity can make your company lose its name, thereby allowing for another company’s formation under that name. After reinstatement, your company has to pick another name, which creates additional expenses to change the new name’s marketing strategies and products. This process can be tedious, money, and time-consuming. 



Generally, maintaining good standing is a constant and crucial process whose reward is highly beneficial to you, your company, your stakeholders, and your employees. You must agree that it is better safe than sorry. Try to handle compliance problems as soon as they arise to keep them from piling up and causing catastrophic consequences to your precious business. Staying in compliance is an excellent way to ensure your company is well-organized, professional, and presentable, reducing stress, time, paperwork, and money. Be sure to choose the right agent to ensure you stay in good standing. Notably, your company or small business can outsource its compliance responsibilities to companies that specialize in that line of work to ensure efficiency. 

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