Charles Jones Blog
Consultation: Understanding differences in types of documents requested when performing due diligence or obtaining documents for a financial or commercial real estate transaction.
There are various types of documents that can be obtained to determine a company’s solidity. Do you know what these documents are and what they are called in each state?
“Good Standing Certificate” is the name of one type of document in New Jersey that is available if the entity is in good standing. If the entity is not in good standing because it has failed to file an Annual Report/s, it is referred to as a Standing Certificate and the interpretation as to the entity’s status is left up to those entering into the transaction together. In many states the wording “Good Standing Certificate” is not used and instead a document is referred to as a Certificate of Legal Existence or a Subsistence Certificate. For example Pennsylvania refers to such a document as a Legal Existence Certificate. Both are obtained and used for the same purpose: to determine if a company is in existence and if they have met the requirements to maintain their status as an active corporation in the given state. If you were not aware of this fact, you are not alone according to April Brady, Manager of the Corporate Services Department at Signature Information Solutions LLC.
“A number of our customers are uncertain about what they need to order from NJ and other states in regard to their specific business transaction,” Ms. Brady said. “Therefore, we consider it our job to consult with the client to ensure we know what their need is before we obtain the documents for them.
“Sometimes it’s as easy as the client asking ‘Can you tell me if the business taxes are paid for the fiscal year?’ In New Jersey, we would let them know that this information would be obtained by ordering a Franchise Tax Lien Certificate; in Pennsylvania we would advise them it would be a Corporate Lien Certificate” she said.
Ms. Brady added, “Understanding why you need something is an important part of our ordering process. For example there are times when someone will call and advise us that they need a Good Standing in New Jersey. However, there are variations as there is a Short Form, a Long Form with Board of Directors or Long Form with Charter Documents. Therefore, knowing for what purpose the document is needed can help us determine which product would work best.”
Providing this type of consultancy is a part of customer service and it is important that you ensure that the company with whom you are doing business has expertise to help you through the process.
Ms. Brady said “Sometimes screening your service company is helpful. Ask your company how long they have been in business and if they have expertise in the state where you need their assistance. Also, ask about turn times and fees upfront. If the company meets your expectations - or better yet- surpasses them – keep coming back. Good customer service and consultation will translate back to your customers with quality products, fees and turn times on a continuous basis!”
Signature Information Solutions has a staff of seasoned professionals who have been in the industry for a combined total of 110 years, averaging 14 years each. The company also has a paralegal on staff. Additionally, it is affiliated with National Registered Agents, Inc. (NRAI) a professional registered agent company with a network of corporate service professionals nationwide as well as internationally.
The information provided is for informative purposes only and is not intended to be legal advice or a legal opinion. For legal advice, please consult an attorney.
Manager, Corporate Services Department