LLC Verification: Verifying the status and credibility of a limited liability company (LLC) is an essential step before doing business. With LLC filings and compliance requirements varying by state, conducting proper due diligence prevents legal and financial risks. This comprehensive guide will equip you with the knowledge and resources to effectively verify LLC status.
To check an LLC’s status, you will need to contact the Secretary of State office in the state where it’s registered. Most states provide online business entity databases to look up status and download Certificates of Good Standing. Maintaining good standing enhances credibility, allows you to open business bank accounts, shields your assets, and preserves the LLC’s protections.
LLCs are popular among small business owners and entrepreneurs due to tax flexibility and limited liability protections. However, the advantages can quickly evaporate if annual fees and paperwork are not handled correctly.
By following the best practices outlined here for LLC verification, you can ensure your company remains in good standing, avoiding penalties or even dissolution. Let’s get started.
What an LLC Status Tells You (Active?)
An LLC’s status provides key details on its history and compliance, including:
- Date formed – This verifies how long it has been operating.
- Registered agent – Confirms it has an official contact authorized to receive legal notices.
- Annual reports – Did the company submit required paperwork and fees?
- Dissolution date – Indicates if it was voluntarily dissolved.
- Revocation date – Shows if it failed to comply and meet state rules.
Checking LLC Status with the Secretary of State
The Secretary of State’s office in the state where an LLC is registered maintains its status and business records.
To check a company’s standing, you can:
- Search online – Most states provide free LLC status checks using the business name or ID number.
- Request by phone – Call the state government office to speak with a representative.
- Obtain the status by mail – Write a letter requesting the official status and include any required fees.
- Order a Certificate of Good Standing – This provides detailed verification an LLC is active and compliant.
What is Considered “Good Standing” Status?
For an LLC to remain in “good standing”, it must stay current with all state business and tax filing requirements. This generally includes:
- Submitting annual reports
- Paying required LLC state fees
- Keeping a valid registered agent and address on file
- Filing any changes to the LLC name, members, or managers
Benefits of Good Standing Status
Maintaining good standing provides many advantages, including:
- Enhanced credibility – Shows clients and vendors you operate a legitimate business.
- Asset protection – Preserves your LLC’s liability shield if sued.
- Financing eligibility – Lenders want to see good standing before approving loans.
- Right to operate – Avoids fines or administrative dissolution of your company.
- Peace of mind – Confirms you are meeting all compliance rules and obligations.
Consequences of a Revoked LLC
If an LLC fails to stay compliant and loses its good standing status, serious consequences can result:
- No liability shield – Business assets and your personal assets are exposed.
- Bank account issues – Accounts may be frozen or closed by banks.
- Vendor problems – Suppliers often won’t do business with a revoked LLC.
- Tax complications – Loss of pass-through tax status if IRS doesn’t recognize it.
- Legal limitations – Cannot defend against lawsuits or enter contracts.
- Fines and penalties – Delinquent fees and taxes often must be paid to regain active status.
Maintaining Updated Business Records
To keep proper records on LLCs you transact business with, follow these best practices:
- Check status annually – Require vendors submit a current Certificate of Good Standing.
- Screen new clients – Verify LLC status before finalizing contracts.
- Document business agreements – Cite the exact registered LLC name and status.
- Receive legal notices – Update your contacts if their registered agent address changes.
Closely monitoring an LLC’s status history provides vital insights before risking your reputation and resources. By consistently following best practices for verification, you can avoid legal liability and make informed decisions when partnering with or doing business through limited liability companies.
Frequently Asked Question (FAQs)
1. How much does it cost to check LLC status?
Most states allow free online searches of their business entity database. Official Certificates of Good Standing range from $10-$50 depending on the state.
2. What if my own LLC lost good standing?
You will need to file any missing annual reports and pay delinquent state fees to regain active status. Some states make you re-apply for a new LLC.
3. Is status the same as license verification?
No. You may also need to check if the LLC has a required state license for its industry or locality. License verification is done through that authorizing agency.
4. Where do I obtain an LLC’s EIN number?
5. Can I rely on my state’s online status check?
While convenient, some official documents and certificates will still need to be directly obtained from the Secretary of State office for more formal verifications.
Alfie Wilson, Esq., is a legal content writer with expertise in business formation, criminal law, veterans disability, family law, DUI law, personal injury, animal welfare, and legal writing. He holds a J.D. from Emory University School of Law and has experience in appellate advocacy and regulatory matters. Alfie’s passion lies in breaking down complex legal topics for a non-lawyer audience. He currently writes for law firms and non-profits on various issues and resides in Arlington, Virginia.