What is a certificate of good standing?
There are various kinds of legal certificates that can prove Australian business entities are registered and valid. One of the most popular certificates for overseas use is a certificate of good standing.
A certificate of good standing is a document issued by a notary public that confirms a business is legally registered. It proves that a business is complying, or in “good standing,” with the country it does business in (in this case, Australia).
When is a certificate of good standing needed?
The most common use of a certificate of good standing is to demonstrate that an Australian company with plans to trade or invest in overseas markets is registered and in good standing.
Some other common reasons why a business might need a certificate of good standing include:
- At the request of a foreign bank
- At the request of potential investors
- At the request of another lender
Many small businesses will need proof of good standing when trying to secure external investment to help the company grow.
What information should a certificate of good standing contain?
A certificate of good standing is evidence that your company has been properly registered in Australia and has been in continuous existence since its registration. At the very least, it will certify that your Australian company is:
- Currently registered under the Corporations Act 2001
- Not in liquidation
- Not under any form of external administration
- In control of its property and assets (meaning they have not been claimed by a creditor)
The certificate will also contain information about:
- Your company’s registered office address and principal place of business
- The names and addresses of the company’s directors and secretary
Do you need a certificate of good standing to get a business bank account?
Anybody scaling an Australian small business will need a business bank account. In order to open a business bank account, the business owner needs to supply 100 points of proof to the bank. Company documents that can help you reach 100 points include:
- A copy of the company’s constitution
- A completed Form 201
- A copy of the certificate of incorporation
While a certificate of good standing is not a requirement for an Australian company wanting to open a business account, it will cover plenty of the information that banks need to verify. If you already have a certificate of good standing, it makes sense to include it in your account application.
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How to get a certificate of good standing
Because Australian companies no longer have to register their company constitutions with the Australian Securities and Investments Commission (ASIC), an up-to-date copy of your company’s constitution must be given to the notary public before they can complete the certificate of good standing for your company.
Before witnessing and signing the certificate of good standing, the notary will usually ask the secretary of the company to sign a statutory declaration, which will include a copy of the company constitution.
What is a company constitution?
A company constitution is used to decide the internal management of a company. A constitution is an essential legal document that helps to oversee your company’s activities and the relationship between your company’s directors and shareholders.
Company constitutions should include information about the following:
- Your company’s management structure
- The issue of shares
- The transfer of shares
- Share certificates
- Governance of meetings
- Voting procedures
- Information about the directors
- Information about the company secretary
What is a notary public?
A notary public, public notary, and notary are different descriptions for the same profession. A Notary Public is a practicing solicitor (with a minimum of five years’ experience) who has been given statutory powers by the Supreme Court to witness documents, including certificates of good standing.
In Australia, Justices of the Peace (JPs) provide similar services to those offered by notaries. However, JPs are not permitted to witness documents for use in foreign countries.
Frequently Asked Questions
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Who can request a certificate of good standing?
Any business can request a certificate of good standing. In most cases, it is either a director or the company secretary that will submit the request.
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What is an Australian Company Search Report?
Beyond proving good standing, businesses are also sometimes asked to provide an Australian Company Search Report. This report is supplied by the Australian Securities and Investments Commission and includes the business’s registration details, as well as the latest information ASIC has on file.
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