A certificate of good standing (also know as a record of compliance or Incumbency) is a commonly used means of certifying the current status of a particular UK company.
The information contained on a certificate of good standing generally falls within two categories: The first contains standardised details such as the Companies Act the company was incorporated under, the company’s unique number and the country of registration.
In addition, the Registrar of Companies will report whether or not the company’s existence has been unbroken since its formation date and that whether Companies House or any third party (to their knowledge) have instigated company dissolution or liquidation proceeding.
If a statement is given that no steps are being taken to strike off the company then it is implied that it is therefore up to date with all of its statutory obligations regarding the filing of its accounts, annual returns and other obligations it has.
The second category of information which can be included on a certificate of good standing covers any details the purchaser requests, which Companies House could reasonably expected to have knowledge of.
Items here could include the names and addresses of the company’s directors, the authorised and issued share capital, the first shareholders and the registered office address.
The Need for a Certificate
Whilst most companies generally do not require a certificate of good standing, those whose directors are largely based overseas and who wish to carry out business activities in those countries are frequently requested to produce one.
For example, where non UK resident directors wish to open a foreign branch of the company in their respective country, the official registration body which governs that jurisdiction (the Companies House equivalent) will want to ensure that the business entity in not in breach of any of the UK laws or regulations.
The two types of certificate services available are the standard and same day service. The former can take between 5 and 10 working days to be despatched whilst the latter will be sent out on the same day by recorded mail provided it is order before 11am on that day.
Certificates of good standing usually accompany other incorporation documents (namely, the memorandum and articles of association and registration conformation) when notarial certification and an apostille is required.
It primary purposes here would be to demonstrate that the company is active, complying with regulatory matters and controlled by the stated directors and at the registered office address given.
Once Companies House has issued the certificate of good standing it is a valid for a period of three months from the date shown of the document.
The UK company obviously is required to be incorporated before a certificate of good standing can be issued for it. For new electronic company formations there is a two to five day waiting period which is the approximate time it takes for an online incorporation to appear on the Companies House systems.
Once the company has been incorporated however and is shown on the database, a certificate of good standing can be ordered even through the company may have only been in existence for a few days.