A Certificate of Good Standing is used to prove that a company is incorporated and authorised to undertake business in a particular state. You might also see if referred to as a ‘Certificate of Authorisation’ or ‘Certificate of Existence’, and in this article we explain the purpose and content of the certificate and how you can easily order one for your company.
A Certificate of Good Standing for a company confirms two important things about a company:
- That the company has continued to exist since it was incorporated; and
- That no action is currently being taken to remove the company from the register of companies.
In the UK, A Certificate of Good Standing is issued by Companies House and sent by post to the company’s registered office address. While it is possible to get an electronic copy, this will not bear the signature of a Companies House official and so, depending on what you need it for, is not always appropriate.
What a Certificate of Good Standing includes:
- The company name and number;
- The date the company was incorporated;
- A statement that it has been in continuous and unbroken existence since being incorporated;
- A statement that no action is being taken by Companies House to strike off the company and dissolve it as defunct; and
- A statement that, as far as the Registrar is aware, the company is not in liquidation or subject to an administration order and no receiver or manager of the company’s property has been appointed.
Here’s an example of what a Certificate of Good Standing looks like:
Do I need a Certificate of Good Standing?
Most companies won’t have particular need of a Certificate of Good Standing, although many just like to satisfy themselves that all their filings are up to date and so request one for this purpose.
By demonstrating that the company is meeting its regulatory obligations, a certificate can also show that the company is professional and well organised, and thereby give confidence to customers, suppliers and other interested parties.
the main benefit of a Certificate of Good Standing is where you’re looking to conduct business abroad
However, the main benefit of a Certificate of Good Standing is where you’re looking to conduct business abroad. If you’re setting up a foreign branch in another country, you’ll generally need to provide a Certificate of Good Standing to the official registrar (the equivalent of Companies House) in that country. They’ll request this to assure themselves that the UK company is on top of its regulatory obligations.
Even if your business is solely based in the UK, a Certificate of Good Standing may be requested by:
- Lenders, as a condition of a loan offer
- Banks, when opening new accounts
- Potential business partners or investors
Simply confirming that a company has been in existence since its incorporation and that no action is currently being taken to remove the company from the register is probably insufficient detail for some of the above organisations. Accordingly Companies House can include additional information on the Certificate of Good Standing if required, for example:
- Registered office address
- Company objects
- Directors’ names
- Secretaries’ names
- Issued share capital
If these details are still insufficient Companies House will consider adding further details (for example directors’ dates of birth, nationality etc) if requested.
How do I get a Certificate of Good Standing?
A Certificate of Good Standing can only be ordered for a company that has already been incorporated. However, once it is shown in Companies House’s database a certificate can be requested, meaning that a Certificate of Good Standing can be issued even though the company has only existed for a few days.
Companies House will not, however, issue a Certificate of Good Standing in the following circumstances:
- If the company is behind with filing its accounts or confirmation statements (which replaced the annual return from 30 June 2016)
- If required information about the company’s constitution, its ownership or control has not been provided
- If the company does not have the required number of officers – at least one natural director for a private company or at least two directors (one of them being a natural person) and a secretary for a public company
By providing automatic diary reminders and a simple wizard for filing confirmation statements Inform Direct will ensure you do not fall behind with many of these obligations. If you need to update details of your officers, again Inform Direct provides simple step by step guides to make sure all appointments and removals are up to date.
Once you have received your Certificate of Good Standing it will remain valid for three months from the date of issue. After that, most authorities will want to see a more up to date certificate.