5 Reason to Have Certification Of Good Standing
When a business has a good standing status, it expects to thrive and proliferate. Apart from building trust and confidence, there is the comfort of knowing that you run a legit business. A certification of good standing is proof that your company is authorized to operate in any region it is in. It also shows that the business complies with all the set standards, including payment of tax. Sometimes, this certificate is known as a certificate of status or certificate of authorization. No matter how you choose to refer to it, a business with one can more easily run in a competitive environment than one with none.
Here are some of the compelling reasons why you should consider getting one for your company...
1. It Makes it Easy to Compete for Government Contracts
You cannot do business with the government unless you are legit enough. You must prove that your business is on the right side of the law and that it submits its taxes on time. If you intend to work with the government, you must comply with your area's rules. This may vary from one place to another since different countries regard varied aspects as good standing.
Some of the common factors often considered include filing of reports and payment of all taxes and official charges. Not all states may check for this only. Thus the need to research needs to be done to order company letter of good standing with ease. With this document, you are free to apply and compete for government contracts without numerous hindrances.
2. When Opening a Bank Account
When opening a business bank account, you may have verified your legitimacy as a business. In such a case, showing your certificate of good standing will be an easy way to vindicate your business. It is essential to do this because companies run best when they hold a separate account from personal accounts. Most successful entrepreneurs never mix their accounts. This is simply a matter of organization and focusing on running the business better.
In most cases, when a business account is also a personal account, you run the risk of misappropriating business funds or using up your cash to run the business. Either way, having a clear demarcation of the two accounts is an easy way to gauge your business progress, not to mention that it helps you stay focused on the things that matter in your business.
3. To Insure Your Business
Several documents are needed when getting business insurance. One of these documents is the certificate of good standing since it proves that you are not a liability when getting an insurance cover. Most insurers will not accept a company when it comes to several drawbacks that could put them on the line.
After all, no one wants to pay compensation for things that they are not aware of from the start. If you intend to secure any business insurance, make sure to sort out your verification because it is the easiest way to prove that you are a stable business. Small businesses need to have a good insurance cover to protect their assets from legal liability. Anything hindering you from acquiring this insurance cover from protection can be a severe drawback that needs immediate tackling.
4. Wooing Investors and Potential Business Partners
Before you convince someone else to be a serious investor in your business, you must prove that you are worth the risk. Many people hold back from making such moves because it may mean losing their cash instantly. Fortunately, you can make an excellent case for yourself if you have the necessary documents to back your claims.
Investors and potential partners require proof that your business is sustainable and legally recognized. It is one of the easiest ways to ensure that you secure your business space in an area. Certification of good standing often proves that you are doing things right and can potentially grow and expand, both of which are attractive aspects to new investors. Before proceeding to present your case to a team of investors or soon-to-be partners, make sure your certificate of good standing is the greatest weapon you use.
5. Helps When Selling Your Business
People sell their businesses for various reasons, which could range from changing professions to simply wanting out. Whatever your reason is, potential buyers will immediately be suspicious if you cannot provide the certificate of good standing. The last thing you want to do is give off the impression that something is wrong with the business. Besides that, your business will fetch a better price with this certification because those buying it know that they are getting a legit company that has no potential to disappoint them.
A good standing certificate comes with numerous gains, including license renewals, business insurance, business funding, and systems setting. Whatever your motivation is to get this certification, it will go a long way in ensuring that you get the best deals as a business. Make a point of getting your business certified if you have expansion plans. This certificate can open doors that were previously unreachable.