Maintaining Your Business in Good Standing

In Maryland, a Certificate of Status (commonly known as a Certificate of Good Standing) is a document issued by the State Department of Assessments and Taxation (SDAT) which certifies that a business is in compliance with Maryland’s requirements and is in good standing to conduct business in the state.

 

To be in good standing, a business must meet several requirements, including:

• filing annual reports with SDAT;
• filing the name and address of a resident agent;
• paying penalties owed to the State of Maryland; and
• not being dissolved.

 

Certificates of good standing are routinely required for commercial financing, licensing, and acquisitions. For example, a Maryland business wishing to obtain a business loan or license would likely need to furnish a Certificate of Status as part of the application process to indicate the business is authorized to transact business in the state.

 

A business can be deemed not in good standing if it falls out of compliance with any of the requirements. Top compliance issues include failure to file an annual report, non-payment of penalties, and administrative actions taken by state agencies, such as the Maryland Office of the Comptroller. Good standing can be restored by addressing all outstanding compliance issues.

 

Consider consulting with a business attorney to assist you with maintaining or regaining your business’ good standing status. As business attorneys, we assist business owners at every stage of ownership, offering guidance in selecting the best entity, drafting customized governing documents, and providing ongoing business counsel.