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What is a certificate of good standing in Delaware, and what is it for
CGS is an official document certifying a business formation with the secretary of state’s office. It demonstrates that a company is qualified to conduct business and conforms to applicable laws and taxes, such as the franchise tax.
This “status certificate” is known solely in Delaware as a Certificate of Good Standing. The other States call it a “Certificate of Existence” or “Certificate of Authorization”.
You need this certificate to confirm the operation of your business and that it conforms to all State regulations on taxes and annual reports.
This document is often required when performing the following actions:
- Create a bank account for your company
Some banks and investors might require a CGS certificate no older than 30 days to open business bank accounts or to obtain government funding.
- Get a Certificate of Authority to run your business in another state
You need to get a CGS document to prove that your company is in good standing in your home state before applying for a Certificate of Authority.
- Take out a bank loan
CGS shows that your business has filed all necessary annual reports and is up-to-date with levies and taxes, proving your company’s financial information and loan affordability.
What to prepare before applying the form
To be eligible to apply for a good standing certificate, your company must be up-to-date with taxes and fees obligations, as well as comply with Delaware state laws such as record-keeping, obtaining necessary licenses and permits, filing state tax forms, and other requirements.
If you own a corporation, make sure you submit reports and pay taxes on a yearly basis. No annual reporting is required for an LLC, but you must pay Delaware franchise taxes regardless of whether you make a profit or not.
In case your business has outstanding franchise tax debts, you should pay them off before submitting an application for the CGS. Any businesses that are not in good standing may be dissolved or have their status removed by the State of Delaware.
If your company is not in good standing and a CGS cannot be issued, the Delaware Division of Corporations will provide a search report outlining your current situation.
Information in Delaware certificate of good standing
What does the Delaware Certificate of Good Standing look like? This one-page document includes a brief, conventional statement from the Secretary of State.
The document certifies the entity’s status as of that date and its legal creation under state law. The Secretary’s signature and digital seal are at the bottom of the document.
The information included in the form:
- Date of paper’s submission
- Organization founding date
A declaration that no cancellation has been filed, demonstrating that the LLC is in good standing and is free to exercise all of its legal rights and functions.
A statement indicating that there is no proof that the corporation was dissolved or that a merger caused it to cease to exist. According to the records of the Secretary of State, the statement of the company is qualified to exercise all of its rights and is in good legal standing in Delaware.
How to get a Delaware certificate of good standing
You can get a CGS in four ways, which are:
- Online (soft version)
The Secretary of State site allows you to check your business’s status. However, this choice will not result in a physical paper certificate.
Each short-form result costs $10, while each long-form entity costs $20. Their site accepts the most popular credit cards for paying off these expenses. If you submit your paperwork online, you will get your document right away.
If you’d like to come to pick your CGS up directly then the Delaware Secretary of State’s public terminal is located at 401 Federal St, Dover.
- Website-direct access
You can gain Direct Web Access to corporate information by contacting one of the authorized suppliers.
You should be aware that merchants will charge you extra for their services.
- In writing
You can submit a request to the Division of Corporations for a Delaware Corporation Certificate of Good Standing, the short-form costs $50, and the long-form costs $175.
If you want same-day expedited service, leave a note on the form and pay the fees ranging from $40 to $80.
A Delaware Certificate of Good Standing LLC is valid from 30 days to 6 months from the issue date, depending on the purpose.
Not every business needs Delaware CGS. Still, you must keep your company in compliance and submit your incorporation files as required by the state.
What happens if the company loses good standing status?
Your entity can lose its good standing for several reasons, including:
- Not paying your annual renewal fee
- Not maintaining a registered agent or registered office
- Fail to file required documents, such as an annual report or renewal form
- Not paying franchise taxes or fees
- Make mistakes in a filed form, such as failing to sign or fill in the required field
- Lose your business license
- Commit a crime or fraud
Losing your good standing may have serious consequences, such as restricting your access to business finance, stopping you from conducting business in new states, damaging your brand name, and resulting in additional fees, interest, and penalties. Furthermore, if you fail to get your business entity into good standing, your firm will most likely be dissolved and your foreign qualification will be removed.
You can fix your company’s bad standing status by contacting the Delaware Secretary of State for assistance in determining the cause.
Once you’ve identified the shortcomings, you may restore your standing by submitting all relevant paperwork and paying taxes, fees, and penalty costs.
After all remaining criteria have been met, the entity will regain favorable status and a certificate of good standing can be acquired.
In short, obtaining a Delaware Certificate of Good Standing (CGS) is a crucial step for any business operating in the state. Beyond fulfilling a legal requirement, the CGS carries substantial commercial benefits. It boosts your company’s reputation, instills confidence in potential partners and lenders, and opens doors to advantageous opportunities.
If you want to apply for a CGS, make sure you have all the necessary paperwork, including tax returns, yearly reports, an LLC certificate of occupancy, and so forth.
Frequently Asked Questions
Does Delaware have a certificate of good standing?
Yes. The official CGS of the state contains various details about your company. You will need this legal document to prove that your business is in good status.
How much does a Delaware certificate of good standing cost?
A short-form certificate of status, which details the entity’s name and status when the certificate is granted, costs roughly $50. If you don’t require the physical certificate, you can pay $10 per entity to verify the status of the corporation on the Division of Corporations website.
The cost for a long-form document is $175, or $20 if you don’t need a physical certificate. It outlines every detail of the dates and times, and any name changes that have taken place in your business.
How long does it take to get a certificate of good standing from Delaware?
You can get it within the application day. Hand-delivered requests will be fulfilled in two hours while mail-in requests are handled the same business day.
What is a Delaware certificate of existence?
Delaware Certificate Of Existence is a different name from the CGS. It proves that your company is legitimate and verifies its existence in the State.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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