Maintaining a business entity’s “good standing” status with the Office of the Secretary of State prevents fines, penalties, filing delays and the additional compliance costs required to reinstate the entity. There are also numerous other reasons for keeping business entities in good standing.
And forget even trying to sell a business that is not in good standing!
Keep in mind that loss of good standing will eventually lead to revocation. Revocation can result in the loss of the limited liability protection of business entities, thus exposing entity’s owners to personal liability for the debts incurred by the entity. Revocation can also lead to a loss of an entity’s legal right to use its name and to the inability to enforce contracts in courts.
Tips for Keeping Business Entities in Good Standing
It is never good to discover that an entity is not in good standing after a Certificate of Good Standing has been ordered from the Secretary of State. Here are a few tips for keeping your entities in good standing:
Valuable and affordable resources and tools are available to assist you in keeping your business entities compliant with state requirements. Any number of professional registered agent service companies can provide annual status checks. Many also offer entity management systems to help manage compliance due dates along with providing forms and other assistance for all of your Secretary of State and business licensing needs.
Follow these simple tips and, with the help of some great resources and tools, avoid the unnecessary expenses and problems associated with losing good standing!
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.