Introduction

Thinking about expanding your business into another state? Great move! But before you jump in, there’s something important you need to know — legal compliance across states isn’t automatic. You’ll need to register your business in the new state, a process called foreign qualification. And that’s where a Certificate of Good Standing (COGS) comes into play.

Let’s break down what it is, when you need it, and how to get it.

What Is a Certificate of Good Standing?

Definition and Purpose

A Certificate of Good Standing is an official document. It’s issued by your home state’s Secretary of State (or similar agency). It proves that your business:

Exists legally.
Has filed all necessary reports.
Has paid all required state fees and taxes.

Banks, investors, and other states often ask for this certificate during major transactions or registration.

Key Information Included

A typical COGS includes:

Your business name.
Registration number.
Entity type (LLC, Corporation, etc.).
Date of formation.
Confirmation that your business is in good standing with the state.

What Does It Mean to “Do Business” in Another State?

Understanding Foreign Qualification

If you operate outside your home state, you’re considered a foreign business entity there. You must register your business in that state to legally do business.

Activities That Often Require Foreign Registration

You’ll likely need to register if you:

Open an office or warehouse in another state.
Hire employees who live in that state.
Sign contracts or make frequent sales there.
Hold regular meetings or events.

Activities That May Not Require It

You might not need to register if you:

Only do occasional transactions.
Operate online without a physical presence.
Work with independent contractors based in that state.

But remember: rules vary by state. Always double-check.

Do You Need a Certificate of Good Standing for Foreign Qualification?

Yes, Most States Require It

Why States Request a COGS

A COGS shows the state that your business is:

Legit.
Up to date on taxes and filings.
Not under suspension or dissolved.

What Happens Without It

Your foreign registration application may be denied.
Your expansion plans may face delays.
You may need to pay extra fees or complete more paperwork.

How It’s Used in the Registration Process

Submitted with Foreign Qualification Application

Most states ask for a COGS when you apply.
The document usually must be recent — within 30 to 90 days old.

Needed for Annual Renewals in Some States

Some states may require an updated COGS during yearly compliance reviews.

How to Get a Certificate of Good Standing Before Expanding

Check Your Business Compliance

Make sure your business is:

Current on all state fees.
Up to date with annual reports and taxes.
Not suspended or inactive.

Request the Certificate from the Secretary of State

Online Request

Fastest and easiest option.
Most states offer an online request form.

Mail or In-Person Option

Good for certified or expedited copies.
Use if online option isn’t available.

Typical Fees and Processing Time

Cost: $10–$50, depending on the state.
Time: Usually 1–10 business days.

State-Specific Considerations

Differences in Names

Depending on the state, a COGS might be called:

Certificate of Status
Certificate of Existence
Certificate of Authority

Varying Rules on What Qualifies as “Doing Business”

Each state defines this differently. So, always check the Secretary of State’s site before registering.

Penalties for Non-Compliance

Not registering properly can lead to:

Fines and back taxes.
Loss of the right to sue in state courts.
Trouble signing legal contracts.

Alternatives and Additional Documentation

Articles of Incorporation or Organization

Often required along with your COGS.
Proves your business formation details.

Business Licenses and Permits

A COGS doesn’t replace required licenses.
You may need local business permits based on your industry.

What Happens If You Don’t Register Properly?

Legal and Financial Consequences

Fines and Late Fees

Some states charge daily penalties until you register.

Voided Contracts or Lawsuits

You may not be able to enforce contracts or sue another party in court.

Reputational Risks

Partners, clients, or investors may see your business as untrustworthy.

Final Tips for Expanding Across States

Get Professional Help

A business attorney or filing service can guide you through each state’s rules.

Keep Documents Updated and Accessible

Have digital and paper copies of your COGS, formation docs, and licenses.

Monitor Renewal Dates

Some states ask for renewal filings and updated certificates yearly. Don’t miss deadlines.

Conclusion

Recap

A Certificate of Good Standing is a must if you plan to do business in another state. It proves your company is active, compliant, and ready to expand.

Key Takeaway

If you’re serious about growing your business, don’t overlook the COGS. It helps keep everything legal and smooth when entering a new market.

Start your expansion the right way — check your status, get your certificate, and grow with confidence!