After choosing a name and registering your business, you’re well on your way. But of course, this is still just the beginning of the process. Taking your new business to its best potential will be a long journey. It’s important to keep your business compliant with applicable state laws along the way.
Staying in “good standing” with state laws is a prerequisite to many of the services your business will need to operate. As a result, it’s critically important to understand how you can stay compliant and what you need to do to prove it. That’s where a Certificate of Good Standing comes in.
A Virginia Certificate of Good Standing, sometimes shortened to CGS or COGS, is a legal document that provides proof of a business entity’s existence. More importantly, however, a Certificate of Good Standing serves as evidence that the Commonwealth of Virginia authorized your business to operate within the state and that it’s in compliance with state law.
In Virginia, the Certificate of Good Standing has a slightly different name depending on which entity type it refers to. Corporations receive a “Certificate of Good Standing” while limited liability companies (LLCs) receive a “Certificate of Fact of Existence/Registration.”
The State Corporation Commission for the Commonwealth of Virginia (SCC) issues Virginia Certificates of Good Standing. If a business applies for a Certificate of Good Standing but isn’t wholly compliant with applicable laws, the SCC will deny the application. If you’re at all worried about keeping your business compliant, ZenBusiness offers Worry Free Compliance services to help businesses thrive.
In general, a Certificate of Good Standing shows the requesting party that your business is:
If you’ve ever seen a Certificate of Good Standing, you might wonder how it could be useful; after all, many states’ Certificates of Good Standing contain very little information on them. In Virginia, for example, the Certificate of Good Standing typically includes just three things:
This is because rather than list all the ways your business is compliant, a Certificate of Good Standing is more like a seal of approval from the State Corporations Commission. If they discover any relevant issues with your business, the SCC wouldn’t issue the certificate in the first place. Accordingly, the mere fact that you have a certificate proves that your business is compliant.
Certificates of Good Standing are generally not mandatory. However, they may be required to obtain useful services for your businesses. These may include:
Notice the trend in these common scenarios where you need a Virginia Certificate of Good Standing? They each involve another party. When entering into a contract or providing a business loan, for example, the other party or the bank will want to make sure your business is what you say it is. Getting a Certificate of Good Standing is one of the best ways to do that and helps the businesses you work with conduct their due diligence.
Virginia provides Certificates of Good Standing for corporations and their equivalent — a Certificate of Fact of Existence/Registration — for LLCs and limited partnerships.
Only businesses required to register with the State of Virginia can obtain a Certificate of Good Standing. Virginia requires the following business types to register as soon as they starting “conducting business” within the state:
Sole proprietorships don’t have to register with the State Corporation Commission but may need to obtain other licenses depending on their industry.
The Virginia State Corporation Commission makes it easy for businesses to obtain their Certificate of Good Standing. However, it’s a good idea to follow a few basic steps before requesting one.
Before making a request for a Virginia CGS, confirm that your business is compliant. If it isn’t, the request will be denied and you won’t get your certificate.
Even if you’ve already worked out the details with the requesting party, it can be helpful to double-check that the certificate you’re applying for will be valid for its intended use. Typically, the validity of the certificate depends on the state where it will be used, the state of formation of the business entity, or the entity type.
The SCC offers Certificates of Good Standing and Certificates of Fact of Existence/Registration through the Clerk’s Information System (CIS). Because of how easy it is to use, many businesses obtain a digital certificate through CIS. However, you can still request a paper hard copy by mail if necessary.
Once you’ve logged into the CIS, the process is relatively easy: simply find your business using the Entity Name or Entity ID, select your business, and add the certificate to your shopping cart. Payment can be made by credit card, personal check, or business check. After completing payment, you will have access to your Certificate of Good Standing within minutes.
Alternatively, you can obtain a paper copy of your Virginia Certificate of Good Standing by making a written request to the Clerk’s Office. This written request can be mailed to the Clerk’s Office of the State Corporation Commission, or hand-delivered to their office in Richmond. Check the SCC’s website for the most up to date addresses and other information.
The state charges a fee for the certificate regardless of whether you obtain a paper copy or a downloadable copy through CIS.
Once you have the certificate, you can send it to whoever requested it. If you ordered the certificate online, it should be available shortly after the transaction is complete.
At ZenBusiness, our mission is to make it as easy as possible to start and grow your business. That’s why one of the key features of our services is eliminating as much red tape as we can. With ZenBusiness Worry Free Compliance, we’ll help you keep your business on top of important deadlines, allowing you to focus on what’s important. And, if you need a Certificate of Good Standing, we have a service to help you obtain it.
Check the State Corporation Commission for the Commonwealth of Virginia website to see the most current information on fees and methods of payment available.
If you order the Certificate of Good Standing online, it will be available for instant download through the CIS dashboard. The SCC doesn’t provide an estimate for the delivery of certificates requested by mail.
The SCC doesn’t offer any specific expedition options. But in most cases, you won’t need one because the online CIS system offers an instant download of your CGS. If you need a paper copy on a rush schedule, the SCC may be able to provide more information about rush processing.
No. In fact, it’s the other way around: staying compliant in Virginia is required to obtain a CGS. Remember that your Certificate of Good Standing is like a gold star from the State Corporation Commission confirming that your business has properly maintained its registration through annual filings and taxes. If your business falls out of good standing, you won’t be able to obtain a CGS in the first place.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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