Certificate of Good Standing

There are a number of different things that companies need to go through when it comes to having good registration and one of those things is what is known as a certificate of good standing. This is a certificate that a lot of people do not really hear about unless it is from a registration company simply because it is a certificate that basically states that everything is okay. Things that reinforce the status quo are normally not things that people are told about in their business seminars and therefore unless a person ends up needing one or they are talking to a real expert, most people will not learn right away about a certificate of good standing.

When it is needed?

As mentioned in the previous paragraph, a lot of people do not learn about the certificate of good standing unless they end up needing one. There are a number of situations in which certificate of good standing might be requested, but the primary one that accounts for the vast majority is the application for a private loan. When a company applies for a loan, the loan provider might ask for a certificate of good standing in order to verify that the company is a secure credit risk. Similarly, if a company happens to be applying for a government grant, the same certificate might be asked for. While these situations call for a certificate of good standing, at the same time it is also important to realize that the certificate is not applicable as evidence of the business being in good financial situation; other records are usually required to show this.

What it shows?

There are a few things that the company has to pass if it wants to get a certificate of good standing and therefore if you as a company have one or if you come across a company that has one, you automatically know a few things about the company. Firstly, you know that the company, since the date of its registration with the central Registrar of Companies, has been in continual existence (i.e. it has never been dissolved and reformed since that date of registration). Secondly, you know that the company has not been subject to any liquidation orders, such as the ones that tend to predate bankruptcy. Thirdly, you know that the company is not in the hands of a court-appointed receiver. And lastly, you also know that the company’s financial standing can not be along the lines to bankruptcy, although it might not be great either (hence the reason as to why the certificate is not evidence of good financial standing).

How to get certificate of good standing?

There are a number of ways to get a certificate of good standing, but the usual method is to go through a professional company, like Novik, that will help you apply for one from the Registrar of Companies. The fee is currently in the range of GBP 45.00 and the government usually takes about a week or so to get the certificate issued to you. The only information that is required is the company name and number as well as the date of registration.