Are Businesses Required to Have a Certificate of Good Standing in Georgia?
No, businesses are not required to have a Certificate of Good Standing for normal day-to-day operations in the state of Georgia. However, there are specific situations where a business may be asked to provide a valid Certificate of Good Standing in Georgia to demonstrate compliance with state requirements.
Here are some business situations that may require a Certificate of Good Standing:
Securing financing – The process of obtaining a business loan generally requires the borrower to present a Certificate of Good Standing/Existence to prove their legal authority to operate in the state.
Purchasing business insurance – Insurers usually want to see a Certificate of Good Standing before issuing a policy covering a particular business.
Opening a bank account – Businesses are normally required to show a valid Certificate of Good Standing in order to open an account with a bank or a payment processing company.
Transactions with other businesses – It’s common for outside businesses to ask for a Certificate of Good Standing before signing a legal agreement.
Expansion into other areas – If a business wants to establish a branch or franchise in another state, it’s customary for the governmental authority in the new area to demand proof of the business’s good standing in the state it was initially registered with. A recent Certificate of Good Standing can provide that.
License renewals – Certain professions and industries require field-specific licenses to operate legally, and it may be necessary to show a valid Certificate of Good Standing to renew such licenses. This is especially common in highly regulated industries such as healthcare or finance.
Selling the business – If a business is being sold, the buyer may want to see a Certificate of Good Standing to ensure that the business is a legitimate enterprise that is in compliance with state laws and regulations.
In many cases, the third party requesting a copy of a Georgia Certificate of Good Standing will ask that the document bear a recent date of issue—for instance, within the past thirty days. That consideration aside, a Certificate of Good Standing does not “expire.” A lot of business owners prefer to have one of these certificates in their files so that it is readily available if the need for it should suddenly arise.
