Certificate of Good Standing

Meaning & Definition

The Certificate of Good Standing certifies that an entity or individual is properly registered, up to date on required filings and has not been found in default. The certificate is frequently needed for audits, contracting, and employee verification in the HR and Corporate fields.

Important aspects of Certificate of Good Standing

• Confirms the legal and regulatory compliance of the organisation.
• Required for government tendering, contracts, vendor onboarding.
• Supports the development of trust and credibility with partners and contributors.
• Helps with background checks and corporate verification for human resources.
• Exists to prevent business operations from being disrupted by compliance risks.

Legal & Regulatory Considerations

• Certificate applicability is determined based on the type of entity being formed and regulatory obligations applicable to it.
• Companies with statutorily compliant filings receive certificates issued under the Companies Act, 2013 by the UIA. 
• Similarly, limited liability partnerships (LLPs) meeting legal requirements receive LLP Act certificates under the 2008 Limited Liability Partnerships Act. 
• While an LLP may also issue a certificate if requested by banks, governmental agencies, and regulators, whether or not one is actually required is dependent on your purpose.