When it comes to learning how to check LLC status, it is important to know what it means for a business to be in good standing. 3 min read
2. Frequently Asked Questions About Checking LLC Status
3. Steps for Checking LLC Status
Updated July 8, 2020:
When it comes to learning how to check LLC status, it is important to know what it means for a business to be in good standing. An LLC in good standing is compliant with state small business regulations. In particular, it means that your business has filed relevant reports and paid taxes and fees to the appropriate state office. This certificate proves that your LLC can conduct business legally in your state.
Benefits of a “Good Standing” Status
1. To secure financing, many lenders will require you to prove your good standing before approving your business loan application.
2. If you want to do business in another state, your business will need to have good standing in your own state first.
3. In addition to requiring your LLC to be in good standing, some states will require your business to have a recent certificate to prove you're still in current good standing.
4. Your LLC may have to pay a fine to the state if you are not compliant with state regulations. Remaining in good standing can save you money.
5. Being non-compliant may void the liability protection that the state provides for LLCs.
Frequently Asked Questions About Checking LLC Status
How can I check the status of an LLC?
To check an LLC 's status, you can request a copy of its Certificate of Standing. A company that is in good standing will have a current Certificate of Good Standing . You can do this for every state. However, the Certificate of Good Standing may have a different name or filing requirements depending on which state you are. In some states, they are called Certificates of Existence among other things. Each state may have different filing requirements, although most require it to be filed at least once per year. For example, Alaska requires businesses to re-file for the certificate twice per year so that the files are up-to-date.
How can I tell companies apart when they have similar names?
If you are trying to check on the status of a company or file paperwork where there are multiple companies with similar names, look for each company's EIN number . The EIN number is a federal tax ID number given to companies for tax purposes. It is like a company's social security number, each one is unique and never changes. EINs are nine digits long and each company has to have one to be in business. Anytime a company files taxes and in some other transactions, it must always include the EIN for identification purposes.
Do I need an EIN and how do I apply for it?
If you are starting a company , you must apply for and get an EIN before the end of the fiscal year. However, it is recommended that you do it as soon as possible because it will be exceedingly difficult to file any business paperwork without a registered EIN. To get an EIN, you can apply for it on the Internal Revenue Service's website .
I have had my company running for years, why would I want to change its tax status?
Changing a business's tax status comes with a set of benefits and limitations that you must weigh against your current operations (or what you plan to do) and determine which is more appropriate for your company. A common suggestion by financial advisors is for you to turn your LLC into a corporation or S Corporation . This is because the benefits of being a corporation may outweigh the potential downsides and offer your LLC a chance to grow and add additional protections.
In an LLC, the major benefit is that your liability is limited. However, LLCs can still leave you vulnerable. Corporations offer you better protections by separating you from the company entirely, which minimizes your liability. Corporations also have the downside of being double-taxed unless you elect to become an S Corp. Changing your status is relatively easy in that you just have to be able to meet the basic requirements and file the appropriate forms.
Steps for Checking LLC Status
1. Find the appropriate business entity search for your state. Each state's website is different.
- In Alabama, it is called a Certificate of Compliance available on the Alabama Secretary of State's website.
- In Alaska, you can use the website for the secretary of state's office.
- In Florida, it's called a Certificate of Status through Sunbiz.org .
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