A person or organisation in good standing is regarded as having complied with all his or its explicit obligations and having unabated powers to conduct his or its activities.

Businesses in the USA

In the USA, a business entity which is either registered with or chartered by a government agency such as a corporation

Corporation

A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...

, limited liability company

Limited liability company

A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...

, limited partnership

Limited partnership

A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners . It is a partnership in which only one partner is required to be a general partner.The GPs are, in all major respects,...

, limited liability partnership

Limited liability partnership

A limited liability partnership is a partnership in which some or all partners have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important...

, or limited liability limited partnership

Limited liability limited partnership

The limited liability limited partnership is a relatively new modification of the limited partnership, a form of business entity recognized under U.S. commercial law. An LLLP is a limited partnership and as such consists of one or more general partners and one or more limited partners...

is said to be in good standing if it has filed and continued to file all appropriate paperwork with the government agency which provides its charter, and has paid all fees which are due for its charter or the renewal thereof. When an entity is in good standing with the chartering agency, it may obtain a certificate of good standing which indicates this to be the case.

In some cases, a bank may require an entity wanting to open an account such as a checking or savings account to show a certificate of good standing from the chartering agency. Also, a corporation or other limited liability entity wishing to register in another jurisdiction as a foreign corporation (or foreign limited liability company, partnership, etc.) will have to provide to that jurisdiction a copy of a certificate of good standing from its home jurisdiction to be able to register in the new jurisdiction.

Note that being in good standing simply means the entity has kept all paperwork related to its charter and yearly renewal up to date and that all fees have been paid. It is possible for a corporation or limited liability entity to be simultaneously

• involved in an investigation for labor law violations
• subjected to an audit for unpaid payroll taxes
• having its property seized for unpaid state and federal income taxes
• delinquent on its property taxes
• convicted of multiple felony crimes
• under suspicion for securities fraud
• in bankruptcy
• being sued for causing people to die due to its products being defective, and
• have the entire board of directors indicted for suspected criminal behavior

among other things, but as long as the paperwork and fees are current with the chartering authority, the entity will still be in "good standing."