A South Dakota Certificate of Good Standing is an important document that shows your business is up to date on all filings of annual reports, has all the proper licenses and permits, and has paid its franchise taxes.
In this guide, we’ll walk you through the process of obtaining this document while explaining its benefits.
What is a South Dakota Certificate of Good Standing?
When running your business in South Dakota, you may need a CGS for many reasons, though obtaining one isn’t mandatory in order for a domestic (in-state) company to conduct business within the state. This one-page document proves your legal existence and registration in the state. It also verifies that you’ve paid the applicable state taxes and filed your annual reports with the South Dakota Secretary of State (SOS).
The document is proof of your compliance with certain state laws and is also called a Certificate of Existence in South Dakota.
Which South Dakota office issues Certificates of Good Standing?
The Secretary of State’s office issues the CGS to businesses registered in the state. Apply for the document on the SOS’s website via their online process. You can also download and print the form to send it via mail.
Once you process the payment, your document will be ready to download immediately as a PDF. All you need to do is provide your corporate ID or entity name on the form with the other required information. The cost of a South Dakota CGS is $20, and you can expedite it by paying $50.
Whether you need help filing for this certificate or remaining compliant with state laws, you can reach out to ZenBusiness for assistance with our worry free compliance service.
What does a Certificate of Good Standing confirm?
A South Dakota Certificate of Good Standing proves that your entity adheres to statutory requirements. It also confirms that you pay state taxes and file annual reports on time. It proves your entity’s legal existence, history, and authorization to conduct business in the state.
A CGS has the state seal and signature of the South Dakota Secretary of State. Any business corporation, limited liability company (LLC), or limited liability partnership (LLP) can apply for this legal document. It contains vital information about your business and includes the following:
- Business entity name
- Date of its formation in South Dakota
- A declaration that the entity is registered to do business in the state
- A certification that all required documents and fees are filed with the Secretary of State office
- A guarantee that the organization is in good standing with the state
- A declaration that the certificate does not endorse, recommend, or approve the financial status or business practices of the entity
Why might a business need a South Dakota Certificate of Good Standing?
Per South Dakota state laws, obtaining a CGS isn’t mandatory to run your business. However, this certificate comes in handy when you need a business loan, insurance, or bank account. It even helps expand your business to other domains than South Dakota. You’ll likely need it in the following circumstances:
Registering to Do Business in Another State
When you plan your business growth, you may be looking to expand into other states or countries. In this case, your entity would become a foreign (out-of-state) corporation or LLC in those states.
You’ll need a South Dakota CGS to obtain the Certificate of Authority in that particular state. It proves to the authorities that you’ve complied with the laws in your state of formation.
As your business grows, you’ll need financing to run it smoothly. However, banks, investors, and credit unions usually require a CGS to prove that your business is legitimate.
Opening a Business Bank Account
A bank account is essential to keep your personal finances separate from your business funds and liabilities. If you want to open a business bank account in South Dakota, the institution may ask for some proof of your entity’s legitimacy, usually a Certificate of Good Standing.
Buying Business Insurance
In South Dakota, business entities must purchase specific insurance policies for covering general liability, professional malpractice, and workers’ compensation claims. To buy these policies, you may need a South Dakota Certificate of Good Standing — again, this is proof of your business’s existence.
Contract Formation with State/Other Business
A CGS is a legal snapshot of your entity’s legality and history in the state. If you have this certificate ready, it can help your business enter into a contract with the state or other organizations.
Selling/Transferring Part or All of the Business
When contemplating your business’s sale or transfer, you may attach a CGS to prove your compliance status with the state. It helps the buyers and investors in gauging your goodwill and legal standing.
Renewing Certain Permits and Licenses
Business licenses and permits need regular renewals to keep your business running as usual. A Certificate of Good Standing shows your compliance with various state laws and can help move the process along quicker.
What South Dakota entities can obtain a CGS?
Any business entity registered with the state can apply for a CGS. Entities that can apply for a South Dakota CGS include:
- Business corporation
- Professional corporation
- Nonprofit corporation
- Limited liability company
- Professional limited liability company
- Limited liability partnership
- Trusts and voluntary associations
Entities that Can’t Get a CGS
According to the Secretary of State’s website, entities that can’t apply for a CGS are “General Partnerships, Reserved Names, Registered Names and Doing Business As (DBA)-Business Names.”
How to get a South Dakota Certificate of Good Standing
An online process allows you to request a CGS from the South Dakota Secretary of State. The process involves these steps:
Check to make sure your business is in compliance
Before moving forward with the application process, check if your entity is compliant with state regulations and updated on its filings. Ensure that you have up-to-date permits and licenses to conduct your business. Also, keep your annual reports updated and file them on time with the registered agent details.
If you need any help with these compliance checks, contact ZenBusiness for a worry-free compliance solution.
Go to South Dakota’s business website to request a Certificate of Good Standing
You may request a Certificate of Good Standing with an online format available on the Secretary of State’s website. Enter your business entity name or corporate ID in the required fields of the form to conduct a business search.
After selecting the right option, provide the required details and complete the payment. Once this is done, you can download the certificate as a PDF. However, this document will not be emailed or sent by mail for online requests.
You can also download the form, fill it in, attach the proper fee, and send a copy to the Secretary of State’s office.
Make sure your Certificate of Good Standing will be valid for its intended use
A South Dakota Certificate of Good Standing has no expiration date specified by the Secretary of State. Typically, the validity of this document depends on the requesting party. Entities generally want one that’s dated within 60 days, although some may require one that’s more recent (within 30 days).
Send to requesting party
Once you obtain the Certificate of Good standing, you can send it to the requesting party.
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 a South Dakota 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.
South Dakota Certificate of Good Standing FAQs
How much does a South Dakota CGS cost?
As of 2021, the cost to obtain a South Dakota CGS is $20 for online requests. You can pay to expedite the process, but remember all these are subject to possible future changes.
How long will it take to get my South Dakota Certificate of Good standing?
You can download the CGS after completing the online process and paying the fee, if approved. Mailing the form and receiving the certificate through mail orders can take a little longer. You’ll get your CGS in one to two business days, while expedited services speed the process up.
Can I expedite a South Dakota CGS request?
Yes, you can expedite your CGS request in South Dakota by paying a fee.
Is a CGS required to stay compliant in South Dakota?
No, a CGS isn’t required to stay compliant, though you must be compliant to get a CGS.