What Is A Certificate Of Status?
A Certificate of Status is an official document that states to the requester that your business is authorized to conduct business in the state. Most states make this convenient by offering you the ability to request the document online. You can choose to have your document mailed to you or you can print it online. If your business has unpaid penalties, the certificate will not be available. You should receive an online message stating whether or not your certificate is available. The document is not available to sole proprietors. Your business must be registered a corporation or a limited liability corporation. The Certificate of Status documents that the corporation has paid initial filing fees to the state.
Most states require a registered agent of a corporation be named in order to receive a Certificate of Status document. The agent of a corporation is the person who is responsible for receiving important legal and tax documents. The agent is also the person who has the authority to forward legal documents, franchise taxes and annual report forms. In most cases, the agent must be an adult and reside in the state in which the Certificate of Status document is requested.
When Do You Need A Certificate of Status?
A Certificate of Status can be requested by financial institutions for certain types of business loans. Some government agencies request this document to verify that the corporation exists and is in good standing with the state in which it resides. It is also a verification method that tells the requester that there is no unpaid taxes or fees owed to any other government agencies. The document can also be requested by all levels of government such as state, local and federal agencies.
A Certificate of Status can also be required by licensing agencies, certain vendors and other businesses. If a corporation does not pay the annual filing fees, then it is given an inactive status. An inactive status can cause a business to lose their corporation’s name if the inactive status remains. It is important that a corporation pay the yearly filing fees to prevent this potential problem.
In most states, the filing fee is due between January 2nd and May 1st. The fee is increased after May 1st and the deadline is August 31st. After August 31st, the corporation may receive a status of inactive. Corporations usually give this task to their CPA or accountant. It is important that the corporation does not wait to pay the annual filing fee to avoid penalties.
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