Doing business in the US - check the company standing
Before doing business - always check a company's status
Does anyone have other experience for a company not being in good standing.
In the US, a small business often creates a LLC (limited liability company) or a full blown company (company, Inc., ...) through the State is resides in. The idea is to receive a Federal Tax ID for opening a bank account to do business outside one's personal bank account.
The idea of some company is to limit one's personal libality.
I am surprised that many people don't understand this is a yearly renewal. The State Governments get a lot of revenue from this and in return recgonize your business and provide protection.
If a company pays the fees and makes a yearly report, the company is in Good Standing. Otherwise, the company (or LLC) status can be changed to something like NOT IN GOOD STANDING.
For example: I had a company and individual who claimed to represent that company threaten me about some type of software license they claim affected me. Besides questioning the documentation provided at a personal level, I got on thier State Web Site and looked up the company they claimed to own and be President of. They have not been in Good Standing since before 2010.
States won't remove a company for many years. For a company to return to good standing, they typically require a penality and all past fees be updated. That cost money and time.
So, my choice was not to respond since my personal idea is that they can not bring a lawsuit. Also, if they go through the process of being in Good Standing, there are many articles that indicate any contract, agreement, invoice, or other business conducted during the time they were not in good standing is basically void as well.
Based on this, it is a good idea to keep a copy that they are not in good standing.
For this same reason, for you as a small business, keep in Good Standing.
When an LLC is closed, be sure to notify the State too.
Disclaimer: I am NOT an attorney and this is not legal advice.
Always consult an attorney, these are some basic concepts that may help you do some research in preperation for a meeting with the attorney.
Re: Doing business in the US - check the company standing
Update to In Good Standing:
Be sure and check out the situation for your state. This is only an indication based on a suggestion from a lawyer and looking up the terms in my state.
This would apply to a non-commercial company. Banking and other laws require licensing that offer special groups of business explicit governed protection. This information is geared more for a business-to-business situation.
An out-of-state contract or implied contract. If a LLC or Company claims a contract or debt has not been honored, they might consider legal action.
In most states, the company taking the action must register and file a fee in the state (the out of state) for which the action is being taken.
The first question about the company taking action may be its "standing".
For myself, I always get on the State's website and look at a Company's standing. It is basically free public informaiton.
If that company or LLC can't even be IN GOOD STANDING with its own State Government, why should the foreign (out of state) state government recgonize its rights as a company? The fees from a company staning in Good Standing can be a major support for the legal system in the state registered.
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