Can you explain what a Certificate of Good Standing is and why it is important for a business?

A certificate of good standing is simply a due diligence item the lender will require showing your business entity is in "good standing" with the state in which the business was formed. "Good standing" means the business is operational and has paid its taxes (franchise taxes, etc) and is up to date on all annual fees, etc. To get the certificate, you can log on to your state of formation's secretary of state website (usually under the section entitled "business services") and you can purchase a certificate of good standing for a minimal fee.

In New York, a business's Certificate of Good Standing certifies that it is adequately registered and active in doing business in the state. A business owner may obtain a Certificate of Status, also referred to as a Certificate of Good Standing or Certificate of Existence, evidencing the existence of a corporation or other business entity by submitting a request to the New York State Department of State, Division of Corporations.

That's something that would be negotiated between the parties involved in the joint venture.

You need articles of incorporation when you start a business, open a business bank account, and apply for a tax identification number. Disclaimer - This information is provided for general informational purposes only. No information contained in this post should be construed as legal advice and does not establish an attorney-client relationship.

There are provisions to add to an operating agreement to address the death or incapacity of a member. Feel free to contact me if you would like to discuss how to move forward.