If you own a limited liability company (LLC) or corporation in Delaware, you may at some point need a Certificate of Good Standing (CGS) from the Delaware Secretary of State, Division of Corporations. It’s proof that your business is active and in compliance with state law. Below we’ll discuss instances where you may need this and how to get it.
But it’s not only about compliance. The CGS (also called Certificate of Existence or Status in some states) is evidence that your company exists. Essentially, it’s a “business passport” for LLCs and corporations and provides many benefits for growing businesses.
The document is required for quite a few important aspects of business. If you’re looking to expand to other states, a CGS is needed. Your CGS might also be needed for opening up business bank accounts, securing financing, forming partnerships, landing contracts, and renewing licenses.
Below we discuss the various aspects of the CGS, how to go about applying for one, and answer common FAQs.
What is a Delaware Certificate of Good Standing?
A Delaware Certificate of Good Standing is an official document proving that your company has permission to do business within the state. It also serves as verification from the Secretary of State that your company complies with the state’s business regulations.
Who issues the CGS? Your Delaware CGS is issued by the Delaware Secretary of State, Division of Corporations.
To remain in good standing, you need to pay taxes and submit annual reports and other filings as required. A lot happens in the first year of business, and it can be hard to keep track of all the deadlines.
ZenBusiness can keep you in good standing with our worry free compliance service. With this service, we not only help keep you in the state’s good graces, but we can also secure a CGS for you if you need one; you just pay the state fees. And, if you don’t have our worry free compliance and still need a CGS, our Certificate of Good Standing service can help.
What does a Certificate of Good Standing confirm?
Your CGS confirms that your Delaware LLC or Delaware corporation is a legally valid Delaware entity. It shows that your company is up-to-date with taxes and fees and has filed annual reports if required.
Companies with outstanding taxes and annual reports won’t receive their Certificate of Good Standing (CGS) until liabilities are settled or documents are received.
So, what type of information is on the Certificate of Good Standing form? The form contains the company name and number, date of acceptance, and various declarations and acknowledgments. There are short-form and long-form versions, both accessible from the Delaware Secretary of State office.
The short form indicates that the LLC or corporation is up-to-date with franchise taxes. For corporations and other entities, it also confirms that annual reports have been filed.
The long-form provides a bit more historical data, in addition to details about franchise taxes and annual reports. Long forms provide a timeline of the documents that have been filed since incorporation. In addition, the long-form provides a detailed outline of the legal history and company structure.
Why might a business need a Delaware Certificate of Good Standing?
The CGS is issued by the Delaware Secretary of State. The document comes in handy when applying for business loans, registering for insurance, opening bank accounts, and securing funding. Businesses looking to secure government funding or contracts will need the certificate as well.
A Certificate of Good Standing isn’t a mandatory requirement when it comes to forming an LLC or corporation. However, this legal document is required when registering to do business in another state. The certificate may also be required if you wish to sell the business, renew licenses, and draw up contracts.
It’s important to remember that a CGS might need to be renewed, depending on what the requester requires. Some banks and investors might require a CGS document no older than 30 days. Typically, a certificate in Delaware lasts up to six months.
What Delaware entities can obtain a CGS?
Businesses that have registered with the Delaware Secretary of State can apply for a Certificate of Good Standing. These include corporations, LLCs, LLPs, and limited partnerships, and other structures that register with the state. Because of this, many types of businesses can apply for a Certificate of Good Standing.
Not all business entities are required to register with the state. One example is a sole proprietorship. Because state registration isn’t required, these entities can’t apply for a Delaware CGS. However, if a business is registered, its Certificate of Good Standing may include an annual report and other information showing that it’s a legitimate business that’s in compliance with the state’s corporate laws.
How to get a Delaware Certificate of Good Standing
Firstly, you need to conduct the relevant checks to see if your business is in compliance. The state won’t issue a CGS if there are outstanding tax payments. Also, if a corporation or LLC hasn’t submitted its Delaware annual report, then the state won’t issue the CGS. If this report is required for your entity, ZenBusiness will take care of your business compliance needs, ensuring you are free to focus on your flourishing business.
When you’ve verified that you’re in compliance, it’s time to submit the legal documents. You can visit one of Delaware’s Division of Corporations at 401 Federal Street in Dover, Delaware, to get the documents.
Alternatively, you can download the forms through the online portal on the State of Delaware’s business website. The online portal service is available Monday to Thursday from 7:45 a.m. to 11:59 p.m. (EST) and on Friday from 7:45 a.m. to 10:30 p.m. (EST). The online portal isn’t available during weekends, state holidays, and unexpected closures of the Division of Corporations.
After you download and fill out the form, you can mail it along with your payment to:
Division of Corporations
401 Federal St., Suite 4
Dover, DE 19901
Your check should be made out to the Delaware Secretary of State. Your request is sent first class mail unless you specifically provide the state with a FedEx or UPS account number.
Remember, when filling out your form, it needs to be accurate. Your certificate must be valid for its intended use. Your document will be returned to you via mail, complete with the printed great seal of the Delaware Secretary’s office. The certificate contains your business identification number and verification code that’s viewable on the state’s official website.
In the first year of business, there’s a lot of paperwork, administration, and on-the-ground business issues. Keeping up compliance can create a few headaches. It helps to have a knowledgeable partner like ZenBusiness to take care of your business compliance. Our worry free compliance package means that we keep track of alerts and notifications, while you hit the ground running with your business.
With the worry free compliance service, we can help you with annual report deadlines, amendments and additional filings, and alerts and notifications.
Delaware Certificate of Good Standing FAQ
- How much does a Delaware CGS cost?
The CGS short form for both foreign (out-of-state) and domestic entities is $50. The long-form for foreign and domestic entities costs $175. Long-form versions contain a timeline of filed documents. For extra certificates, such as mergers and name changes, it costs an additional $50. Unofficial corporate status reports are also available for $10 or $20.
- How long will it take to get my Delaware Certificate of Good Standing?
The standard time to process and mail your Certificate of Good Standing takes anywhere from one hour to 3 weeks depending on the filing method and if you choose to expedite the processing. All requests are processed and sent out by regular first-class mail unless a courier service such as FedEx or UPS is stipulated.
- Can I expedite a CGS request?
Yes, but there is a cost involved. It’s important to note that if you have another file pending with the Delaware Secretary of State, you cannot expedite your documents. It costs $1000 for a 1-hour turnaround and $500 for a 2-hour turnaround time.
Domestic CGS long forms cost $80 for same-day delivery and $60 for a 24-hour turnaround. The short forms for foreign and domestic costs $50 for same-day processing, and $40 for a 24-hour turnaround. These fees are in addition to the filling cost.
*None of the turnaround times in processing include the time it takes for mailing it to you.
- Is a CGS required to stay compliant in Delaware?
No. For your business to remain compliant, you need to follow the state’s annual compliance requirements. Once a year, you’ll need to file a number of documents. The requirements to stay compliant in Delaware include paying the annual Franchise Tax Fee and the annual Registered Agent Fee.
Corporations will need to file their annual report to stay compliant, and professional companies will need to periodically renew their licenses. You’ll need to have compliance if you renew your CGS, so it’s important to keep all paperwork and tax obligations up to date.
Compliance may not be simple to keep up with, especially when considering all the other aspects that make a business go round. At ZenBusiness, we understand that your business needs don’t stop after the business has been registered. ZenBusiness can keep you in good standing with our worry-free compliance service. With this service, we not only help keep your business in compliance, but we can also secure a Delaware CGS for you if you need one; you just pay the state fees. And, if you don’t have worry free compliance but still need a CGS, our Certificate of Good Standing service can help.