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
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
Certificates of good standing and business bank accounts
Anybody starting 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. 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 business bank account, it will cover most 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.
When was the last time your business had a health check?
Our FREE Business Health Check helps you conduct a current and complete assessment of the components of your business. Identify any strengths and weaknesses and get prepared to take your company to the next level!
How to get a certificate of good standing
Company constitutions are no longer stored with the Australian Securities and Investments Commission (ASIC), so an up-to-date copy of your company’s constitution must be given to the notary public before they can complete a certificate of good standing.
Before witnessing and signing the certificate of good standing, the notary will usually ask the secretary of the company to sign a statutory declaration.
What is a company constitution?
A company constitution is used to clarify the internal management of a company. A constitution is an essential legal document that helps to map 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
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.
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 performed by the Australian Securities and Investments Commission and includes the business’s registration details, as well as the latest information about the company’s standing that ASIC has on file.
Employsure is committed to building better Australian businesses. We simplify employer relations and workplace health & safety legislation so you can focus on what you do best – running a successful company.
If you have any issues with your business, call our FREE 24/7 Advice Line on 1300 651 415 to get all your questions answered.
