If you run a business in Texas, you may have received a request for a certificate of good standing from a bank, a government agency, or even a potential business partner. You might be wondering: What is it? Do I need one? The short answer is that a certificate of good standing (or a Certificate of Fact – Status in Texas) is often the key to keeping your business moving forward without red tape or delays.
In this blog, we’ll walk you through what a certificate of good standing is, when you might need one, and why it matters for your Texas business.
What Is a Certificate of Good Standing?
A certificate of good standing in Texas is a “Certificate of Fact – Status.” It is an official document from the Texas Secretary of State that confirms your business exists or has the authority to conduct business in Texas. The certificate provides a statement of your company’s:
- Status,
- Current legal name, and
- Date of formation or registration.
The certificate of good standing that Texas businesses receive is often used to confirm that your company is in “active” status, up-to-date with all necessary reports and fees, and legally permitted to operate in the state.
When Would I Need One?
You don’t need a certificate to keep running your business. But there are key moments when having one is essential. These situations include:
- Opening a business bank account,
- Registering to do business in another state or country,
- Applying for certain licenses or permits,
- Entering a contract with a government agency, and
- Seeking funding from investors or lenders.
Lenders, partners, and agencies want to know that your business is legitimate and in good standing. This certificate gives them confidence in your company.
How Do I Get a Certificate of Fact – Status in Texas?
The process is simple. You can request the certificate through the Texas Secretary of State’s website or by contacting their office via email or mail. Here’s what you’ll need:
- Your business’s name as registered with the Secretary of State,
- Your file number (optional but helpful), and
- A way to pay the required fee.
Once processed, your certificate can be mailed or emailed, depending on your request. Certificates typically cost $15 and are in PDF format for digital use.
Before ordering one, make sure your business is in full compliance with the Secretary of State and the Texas Comptroller. You will not be eligible if you have missed filings or owe franchise taxes.
What Happens If My Business Isn’t in Good Standing?
Failing to maintain good standing can lead to serious consequences. Some of the most common problems include:
- Losing the right to sue or defend against suits in Texas courts;
- Facing fines or penalties;
- Loss of limited liability protection;
- Being denied permits, licenses, or business loans; and
- Administrative dissolution of your business entity.
To avoid these issues, ensure your company files all required annual reports and stays current with the Texas Comptroller’s franchise tax requirements. In some cases, restoring your company’s good standing status may be possible by filing the required documents and paying outstanding fees and taxes.
Is a Certificate of Good Standing Always Required?
Not always. You won’t need a certificate to keep operating day-to-day. But you may suddenly need one for an unexpected business opportunity like a government contract or a new partnership.
That’s why it’s smart to always keep your business in good standing. It can also help avoid non-compliance penalties. Think of the certificate as proof that your business is in tip-top shape, ready for whatever opportunities come your way.
Why Is This Important for My Texas Business?
Maintaining good standing is about more than paperwork. It shows you’re a responsible business owner who plays by the rules. In Texas, where trust and reputation are everything, corporate good standing is essential.
Here are a few benefits of staying in good standing:
- Business growth opportunities—banks, investors, and partners are more likely to work with you;
- Fewer legal roadblocks—you avoid state-imposed penalties or suspensions; and
- Peace of mind—you know your business is on solid legal footing.
In short, a Certificate of Fact – Status or certificate of good standing that Texas business owners can rely on is more than a piece of paper; it’s a business tool.
Common Misunderstandings About Certificates of Good Standing
Let’s clear up a few myths. A certificate of good standing or Certificate of Fact – Status is:
- Not a license. It doesn’t permit you to operate, but shows you already have that right.
- Not permanent. It reflects your current status, but the certificate no longer has meaning if your business falls out of good standing or fails to meet compliance requirements.
- Not only for big corporations. Even single-member LLCs may need one for banking or licensing.
Understanding the certificate and how it’s used to show good standing can help you prepare for common business hurdles.
How Massingill Can Help
At Massingill, we work with Texas entrepreneurs and small business owners every day. We know that running a business comes with enough challenges. Our team can help you:
- Request a Certificate of Fact – Status,
- Maintain your compliance with the Texas Secretary of State and Comptroller, and
- Stay ahead of deadlines and avoid penalties.
As a Texas small business law firm, we’re proud to help local businesses thrive. Combined, our team has decades of experience in business law. From business formation to contract disputes to state filings, we provide practical, responsive legal support tailored to your needs. Our firm’s work has earned the trust of clients throughout Texas.
Ready To Protect and Grow Your Business?
Don’t let paperwork or deadlines slow you down. If you need help getting or maintaining your certificate of good standing, Massingill is here to take care of business.
Contact our office today to schedule a consultation and learn how we can help your business thrive.
Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
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