Delaware division of corporations certificate of good standing

Many companies incorporate in Delaware for its business friendly policies and because investors have come to expect a Delaware corporation, but the first state keeps a careful watch on taxes that are owed. Companies that do not stay in “Good Standing” cannot go about business as usual.

What does “Good Standing” mean?

To be in “good standing” with the State of Delaware, a corporation must have met statutory requirements for doing business in the state. These requirements include filing an annual report as well as paying franchise taxes and a filing fee by March 1. We have resources to assist you in calculating your franchise taxes and the Delaware Division of Corporations provides a portal to submit reports and payment online.

What is a Certificate of Good Standing?

After complying with the statutes, you may request an official “Certificate of Good Standing” from the Secretary of State, also known as a “Certificate of Existence.” This is a legal document that lists the full name of your corporation, your good standing status at the time of request, the date of incorporation, and confirms that your annual reports have been filed and that the franchise taxes have been paid.

Why do I need a Certificate of Good Standing?

Providing a Certificate of Good Standing is often an aspect of due diligence. Most banks require that your business provide evidence of good standing prior to extending lines of credit or awarding loans. Investors ask business owners to show that the company is up to date on its taxes and reporting and most venture capitalists want this proven by obtaining a good standing certificate prior to closing on a funding round. A certificate of good standing is also obtained before completing a merger/acquisition or entering into certain types of contracts with third parties.

How do I fall out of Good Standing?

(a) Failed to file Annual Report/Pay Franchise Taxes. A company is out of good standing when they have not filed their annual report or paid franchise taxes. The delinquency is typically reported to Registered Agents within one week of when the annual report is due (March 1). Following this missed deadline, a late fee and interest on taxes owed is due to the state prior to returning to good standing.

(b) Failed to maintain a Registered Agent in Delaware. A company also falls out of good standing when they do not have a Registered Agent in the state.

What can I do to fix it?

Below is a description of the different classifications of status and actions that you must take when your company has fallen out of good standing.

Void - Company failed to file annual report and pay franchise tax for two years. Reinstatement will cost a late fee and franchise taxes, plus interest. If your company has failed to file more than two times consecutively Delaware will revoke the company charter and it will become void. To return to good standing you must pay an additional fee and submit a Certificate of Revival for a Voided Corporation.

Forfeit - Company does not have a registered agent on file with the Delaware Division of Corporations. Most companies pay an annual fee to retain registered agent services in Delaware. With many registered agent services, ninety days of non-payment will trigger resignation. Then you will receive notification of resignation and an additional 30 days to pay the annual fee. If payment is not received after the full 120 days, the registered agent is officially resigned from representation. The company will lose its charter and to reinstate you must pay a fee and submit a Certificate of Revival for a Forfeit Corporation.

Please note that when your company is void or in forfeit your company name will be available for use or reservation by other entities. Additionally, falling out of good standing does not mean that your company is dissolved. Your company is still liable for unpaid franchise taxes before it can be shut down. If your company is void or forfeit you will stop accruing new franchise taxes, but you are still liable for those you have not paid.

Learn more about dissolution and your company status, and contact our Client Services team if you are a Shoobx customer that has fallen out of good standing but wants to pay your franchise taxes—we can help!

Delaware business owners, this one's for you. As a small business owner, you’re well aware of all the little headaches that paperwork and administration can cause on a regular basis. Even if you’ve been doing this for a while, it seems like a new to-do shows up on your list each year.

This year, that extra piece of paper you need just might be a Certificate of Good Standing for the State of Delaware. But, what is a Certificate of Good Standing and how do you get one?

What Is a Delaware Certificate of Good Standing?

If you own a business that’s incorporated in Delaware, it’s likely that at some point during your business operations, you’ll be asked for a Certificate of Good Standing. This is a document from the Delaware Secretary of State’s Division of Corporations that shows your LLC is active and compliant with Delaware state laws. 

While this can sound a little intimidating, it’s actually quite simple. This document is proof that you’ve paid your taxes, have up-to-date state permits and have submitted your annual reports. 

You might need a Certificate of Good Standing to:

• Open a business bank account
• Secure business financing
• Expand your business to other states
• Form partnerships with other members or businesses
• Get hired by certain clients
• Renew state licenses and permits

A Certificate of Good Standing isn’t a permanent document. Since it states that you’re up to date on your business taxes, a Delaware Certificate of Good Standing is only good for 30 to 180 days, depending on what it’s being used for. After that period of time, you’ll need to request a new certificate.

How Long Does It Take to Get a Good Standing Certificate from Delaware?

You can get a Certificate of Good Standing from Delaware anywhere between a few hours to a few weeks. The time frame depends on how much you’re willing to pay to get your certificate. Faster turnaround times incur higher fees.

The table below lists the different costs for expedited processing of a Certificate of Good Standing in Delaware.  

How to Order a Delaware Certificate of Good Standing

If you need a Certificate of Good Standing from Delaware, here’s the simple three-step process you can follow to get your certificate. 

1. Check the Status of Your Good Standing

Before you order your certificate, you’ll want to check the database to ensure that your business actually is in good standing with the state. If you are not in good standing, you won’t receive a certificate, so it’s best to check ahead of time. 

To check your standing with the state of Delaware, you go to their online status portal and follow these steps:

1. Type in your entity name and file number.
2. Hit search.
3. Pay the $20 fee to get comprehensive results.
4. Click the entity name that you want to see information for.

After paying the $20 fee, your results will return this information about your business entity:

• Status
• Last 5 filings
• Franchise tax assessment
• Total authorized shares (if applicable)
• Tax due

Having this information will give you a good idea of whether or not your business is in good standing with the state of Delaware. To be in good standing with the state of Delaware, you must be up to date on paying your taxes, filing your annual reports and having the correct licenses and permits. 

Licenses and Permits

To operate a business in Delaware, you must have the proper local, state and federal licenses required by your type of business. Some businesses don’t need licenses or permits to operate, while others due. 

Common types of licenses and permits include health licenses and building permits. To update or renew your licenses or permits, you can go to Delaware’s One Stop website.

State Taxes

The state of Delaware doesn’t charge state sales tax but instead levies a receipts tax on a business’s gross revenue. Your business might also need to withhold taxes from employees’ paychecks and pay for unemployment. In addition to these taxes, Delaware LLCs must pay a $300 annual tax and all other corporations must pay a franchise tax. 

Annual Reports

Other than LLCs, all Delaware corporations must file an annual report. This report must be filed by March 1 each year. If your business is a corporation and the report has not been filed, you will not be in good standing. 

2. Submit an Online Request for Your Certificate of Good Standing

Once you feel certain that your business is in good standing with the state of Delaware, then it’s time to request your Certificate of Good Standing. 

You can request your Certificate of Good Standing online. Once you’ve navigated to that webpage, follow the instructions and fill in the necessary information. 

Here are a few suggestions to make your process faster:

• Under “Document Priority,” choose how quickly you need this request processed. Note: the faster you need your document, the higher the fee you will pay.
• Under “Document Request Type,” you’ll choose “Certificate Request.” When requesting a Certificate of Good Standing, no supporting documentation is required, so you don’t need to upload any documents here. 

Once you’ve filled out all of the required information, hit continue and pay the required fee. 

3. Receive Your Certificate of Good Standing

On your application to receive a Certificate of Good Standing, you get to choose how you will receive your certificate. These are the options:

• Regular mail
• FedEx
• UPS
• Messenger pick up

You will receive your paper copy of your Certificate of Good Standing in the method you chose at the time of your request. 

If you’re looking to save your business a little time or hassle, you don’t have to order a Delaware Certificate of Good Standing on your own. At Incfile, we can help you to manage your company with our Certificate of Good Standing service where we handle this process for you.

Does Delaware provide a certificate of Good Standing?

How long does it take to get a certificate of Good Standing from Delaware?

How much does it cost to get a certificate of Good Standing in Delaware?

How do you maintain Good Standing in Delaware?