Obtaining a Certificate of Compliance in Ohio

An Ohio Certificate of Good Standing (CGS) is an important document if you’re looking to build business relationships. You’ll also likely need one for things like expanding your business to another state. We’ll walk you through the process plus highlight a few important considerations when requesting an Ohio CGS.

What Is an Ohio Certificate of Good Standing?

An Ohio Certificate of Good Standing is a document that confirms that a business exists and has met the legal obligations to do business in Ohio. These legal obligations can include keeping up to date with required fees and franchise taxes.

Which office issues the Certificate of Good Standing?

The Ohio Secretary of State (SOS) issues Certificates of Good Standing when all the requirements have been met. Compliance plays a big part in the issuing of a CGS. At ZenBusiness, our worry free compliance service can help you keep track of the state’s compliance requirements.

What does a Certificate of Good Standing confirm?

A CGS confirms that the business is up to date with certain regulatory requirements. It also confirms that the business has the authority to conduct business in that state. While there’s no expiration date on a CGS, it’s important to note that the status can change. The requester, therefore, has to determine the validity period.

Information on a Certificate of Good Standing

In Ohio, a CGS includes a declaration by the Secretary of State of Ohio, their signature, and seal. It confirms the business entity’s name and type, registration date, license number, and the words “Good Standing.” The certificate also includes a validation number that can be confirmed online.

Why a Business Would Need a Certificate of Good Standing

A CGS isn’t always a requirement for business. Some businesses will go years without ever having to provide one; however, that doesn’t absolve them of the responsibility of keeping up with compliance matters.

This changes when a business needs to formalize its business activities and enter into certain agreements. While not all entities may request a CGS, there are some institutions that list one as part of their standard documents. These are just a few of the instances that may require a CGS.

• Establishing a banking relationship: Not all banks require a CGS to open an account. However, when the business requires additional services such as loans or other funding, the Certificate of Good Standing may become a mandatory requirement. Some banks request the certificate at the beginning of any relationship with all businesses. If you wish to secure funding with investors and other types of financial institutions, a request for the CGS is usually standard, so be prepared with one in hand.
• Entering long-term agreements: Whether this is embarking on a project with another business, accepting a project from a client, or even entering a lease agreement, a CGS will be one of the documents requested.
• Important business transactions: Selling some or part of the business, or taking on a partner, will kick off due diligence on their part. The CGS is a document they’ll want to see.
• Applying for permits/licenses: Renewing licenses and permits may require the production of a CGS to reduce the risk of the issuer. If a business isn’t in good standing, these licenses and permits may be denied.
• Doing foreign business: Businesses who wish to request a Certificate of Authority to do business in another state may need to present that Secretary of State’s office with a CGS.
• Taking care of business risk: When setting up business insurance, the underwriters might request a CGS as part of their risk calculations.

What Ohio entities can obtain a Certificate of Good Standing?

In Ohio, only state-registered entities can request a Certificate of Good Standing. Entities that fall within this category include for-profit corporations, Ohio limited liability companies (LLCs), and Ohio nonprofit organizations. These are businesses that have gone through the formalizing process of submitting their formation documents and obtaining a company number.

Some businesses that aren’t required to register to conduct business don’t need to obtain a CGS. Sole proprietors fall within this category. While this might make it difficult to conduct business with certain entities or financial institutions, some businesses can overcome this with alternate documentation. A tax clearance or letter of good standing from the IRS might be a good place to start.

Other Reasons You Might Not Be Able to Get a CGS

One of the standout reasons an organization requests a Certificate of Good Standing is to ensure and prove that the business they legally formed is compliant with Ohio state laws. When there are compliance issues, the Secretary of State may deny the request for a CGS. This is why it’s so important to make sure your required business taxes and fees are paid.

In Ohio, a quick search of the entity will reveal whether it’s active, which is a good place to start. There are three statuses on their database: active, canceled, or dead. A CGS should only be requested on an active business.

The Ohio SOS may deny a request for a CGS for the following reasons:

• Franchise taxes aren’t up to date
• Failing to pay the fees for business registration renewal
• All required information isn’t on file
• There are legal proceedings against the business or its directors/members/officers
• The activities of the business aren’t approved
• Permits and licenses aren’t in place

How to Get an Ohio Certificate of Good Standing

The actual request for a CGS is fairly simple and now must be completed online only at the Ohio SOS site – Obtain a Certificate of Good Standing (ohiosos.gov). Before submitting the request, it’s important to ensure that all the requirements have been met to ensure a smooth process. If not, your request may be unnecessarily delayed or even denied for failure to comply with Ohio state laws.

Check to make sure your business is compliant

Professional corporations and large businesses often appoint a compliance officer to ensure the business remains compliant. In smaller businesses, however, this can fall to the owner or an office administrator. With ZenBusiness, the worry free compliance service offers services to help keep a company in compliance.

To stay in compliance, businesses need to ensure:

• Franchise taxes and other federal, state, and local taxes are timely paid.
• Any periodic registration and service fees are up to date.
• Industry-specific licenses and permits are in order.
• Business operations and transactions are legal and authorized by the state.

Visit Ohio’s SOS site

The request is simple enough. Visit the Ohio SOS website at https://cogs.ohiosos.gov/ and select the option that says Obtain a Certificate of Good Standing (ohiosos.gov). This page reveals a legal notification, and once accepted, the applicant can continue the request. Candidates can receive a standard CGS for $5 and a long-form CGS for $25.

Process Request Online

By registering a profile, the requester can complete the entire transaction online, including the payment by credit or debit card. Once done, the certificate will be processed. The requester will be notified by email that the certificate is ready for printing. Also, the profile can be accessed again in the future, and the certificate will be available for download anytime.

It’s important to note that the date of the certificate is fixed, and if a new, more recent certificate is required, it will need to be requested again.

Process Request Via Mail

Currently, due to COVID-19 restrictions, all requests must be filed online. The information below can be used once these restrictions are lifted in the future.

The manual request form can be found on the SOS Business Portal and, once completed, can be emailed to business@OhioSoS.gov or mailed to:
Secretary of State
22 North Fourth St.
Columbus, OH 43215

The form also needs to include a completed credit card authorization form to facilitate payment. Once processed, the CGS is sent via email, which can then be forwarded to the requesting party.

Conclusion

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 help 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 an Ohio 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.