Throughout the lifecycle of your business, there will be times when you need to obtain official documents, such as a Good Standing Certificate. This document is often required to prove that a legal entity is in good standing and able to do business within its registered state. If you need a Virginia Certificate of Good Standing to prove your business is active in the state, follow the steps outlined below.
What is a Virginia Certificate of Good Standing?
A Certificate of Good Standing in Virginia is a document that certifies your business legally exists and is authorized to carry out business in the state. Issued by Virginia’s State Corporation Commission (SCC), the one-page document will bear the Virginia state seal to verify its authenticity.
Also known as a Certificate of Existence or Certificate of Fact in other states, in Virginia a Good Standing Certificate includes the following information:
- The business name
- Entity type e.g. whether it is an LLC or Corporation
- Verification that the entity exists and is able to carry out business in the state
- A statement that the business is in good standing in Virginia
Why do you need a Certificate of Good Standing in Virginia?
There are many cases in which you’ll need a Certificate of Good Standing in Virginia. Below are some of the most common scenarios in which you’ll be required to obtain this document:
- If you’re undergoing a merger or acquisition, you’ll need a Certificate of Good Standing to prove your business status. Likewise, if selling your business, you’ll need to prove your good standing as part of a broader range of legal entity documents.
- If applying for a loan or line of credit, you’ll need a good standing certification. Typically banks and other financial institutions don’t like to lend money to businesses unless they can demonstrate good standing and compliance with the state tax process.
- When obtaining certain business licenses.
- Registering to operate your business in another state that isn’t Virginia. This is known as foreign qualification, and to obtain this certification, you’ll need to file a lot of paperwork, including a Certificate of Good Standing from your state of formation or incorporation.
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