Know about Delaware certificate of good standing
The Certificate of Good Standing, given by the Delaware Secretary of State, certifies that your company is legitimate and has complied with all state regulations, including submitting yearly reports and franchise taxes.
It is known as a “certificate of existence” or a “certificate of authorization” in some regions. When your company grows into a new state (often referred to as the foreign qualifications) or you are required to apply for or renew specific kinds of finance, loans, or permits, such as in a merger acquisition, you’re going to require the Certificate of Good Standing.
Businesses are required by various state-specific rules and requirements to ensure corporate compliance. Keeping up a Registered Agent, settling taxes and fees, submitting yearly reports on schedule, and keeping all company licenses are a few of these.
When Is the Delaware Certificate of Good Standing Required?
The Delaware certificate of good standing is often required in order to open an account at a bank within the name of the business. Regardless of whether your business is a Limited Liability Company (LLC), S-Corp, or even C-Corp, this paperwork will be valid for a maximum of six months. Yet, in an attempt to more proactively manage hazards, your bank can request one that’s under thirty days old.
A CGS may also be necessary in the following circumstances:
- Obtaining business financing.
- Putting in an insurance claim.
- Obtaining finance for a launch.
- Getting contracts for the company.
- Getting contracts with the government.
- Launching a company in a different state.
- Selling your company.
- Renewing licenses for businesses.
- Drafting agreements.
If you want to periodically capture pictures of your organization’s current state, you may also get a CGS. However, keeping a current, official copy of the CGS available for “rainy day” scenarios is usually not essential.
Ordering a Delaware State Certification of Good Standing
Many platforms can get a replica of a Delaware Certificate of Good Standing on your behalf if you need one. You may request the paperwork online, and depending on your preferred level of assistance and speed, they will retrieve it from the relevant state and transmit it to you.
In the event that it is established that the organization is not in a good standing state, they can also handle every document and give you the data you need to assist you in reviving the business.
What is the time frame for getting a Delaware certificate of good standing?
The Delaware certificate of good standing, often referred to as a Certificate of Status and the Tax Clearance Certificate, is issued by the Government of Delaware – Division of Corporations.
If you choose standard processing or fast shipping, the typical processing period might range from four days to three weeks. “Expedited delivery” requires an additional cost, which ranges from $40 – $1,000 based on the accelerated time frame.
What transpires if the business is no longer in good standing?
A few things might cause your entity to lose its stellar standing, such as:
- Failure to pay the yearly renewal cost.
- Failing to keep up with an office or registered agent.
- Fail to submit necessary paperwork, such as a yearly report or renewal form.
- Failing to pay franchise costs or taxes.
- Make errors on a filed form, including not signing it or not filling out a needed area.
- Your company’s license is lost.
- Conduct fraud or an offence.
Dropping your good standing might have detrimental effects on your brand, prevent you from doing business in emerging states, make it more difficult for you to obtain business financing, and result in higher taxes, interest, and fines. In addition, your corporation will be liquidated, and your international qualification will be deleted if you are unable to get your company’s name into good standing.