Certificate of Good Standing

There are various kinds of certificates that can prove your business is registered and of good standing. One of the most popular of them for overseas use is a Certificate of Good Standing.

A Certificate of Good Standing issued by a notary public is a document that proves a business is legally registered and; 

• has the legal capacity and powers of an individual both inside and outside Australia;
• has all statutory powers conferred by law on bodies corporate;
• is authorised to do anything that it is authorised to do by law:
  • A. in Australia; and
  • B. in any country of the world

The certificate which is notarised by the notary public using their official notary seal annexes a copy of the constitution of the company and other documents such as an up to date ASIC extract of the company and the certificate of registration of the company. An impression of a notary’s official seal for the purposes of identification is impressed on all pages of the documents annexed to the certificate of good standing.

The Certificate of Good Standing also certifies the names and addresses of the directors and secretary of the Australian company.

Who can request a Certificate of Good Standing?

The requests we receive are usually made by the directors of an Australian company who wish to do business or invest overseas. Generally, the certificate may be required by a foreign bank or other lender, a foreign government department, or investors.

When do you need a Certificate of Good Standing?

A Certificate of Good Standing may be required if the directors of a company wish to do business or invest overseas. These certificates are issued by a notary public and are used to confirm that a company is in good standing and has no legal issues outstanding.

The notary public is responsible for ensuring the accuracy of information included in certificates of good standing, although it is the responsibility of the company directors to confirm the correctness of the certificate of good standing.

Here are the common scenarios where such a certificate may be requested:

• Business Entities: Corporations, limited liability companies and public companies, and other types of business entities may request a Certificate of Good Standing to demonstrate their compliance with statutory requirements and their authorisation to conduct business in a particular jurisdiction.
• Legal and Financial Transactions: Companies often need to provide a Certificate of Good Standing during legal or financial transactions, such as opening a bank account, applying for loans, or entering into business contracts.
• Registration in Other Jurisdictions: If a company wants to register or do business in another country, it might need to submit a Certificate of Good Standing from its home jurisdiction as part of the registration process.
• Renewal of Licenses or Permits: Some industries require companies to show a Certificate of Good Standing when renewing foreign professional licenses or permits.
• Selling the Business or Attracting Investors: When selling a business or seeking investment overseas, a Certificate of Good Standing can assure potential buyers or investors of the business's legal status.
• Compliance and Governance: The company's board or management may request a Certificate as part of internal governance or compliance checks.

However, in most cases, businesses request a Certificate of Good Standing for foreign legal or financial transactions.

What does a certificate of good standing include?

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. It includes evidence that your company is:

• Currently registered (under the Corporations Act 2001);
• Not in liquidation;
• Not under any form of external administration; and that
• None of the company’s property or assets are under the control of a receiver or other external controller.

The certificate will also include:

•  The registered office address and principal business location of the company 
•  The names and addresses of the company's directors and secretary 

How to get a certificate of good standing

Because companies no longer register their constitutions with the Australian Securities and Investments Commission (ASIC), a true up to date copy of the company’s constitution must be produced to the notary public before they can complete the certificate of good standing of an Australian company.

The notary will usually ask the secretary of the company to sign a declaration which annexes a copy of the company’s constitution.

What is a company constitution?

A company constitution is a key document for any Australian business. It acts as the foundation for how a company is managed internally. This document is more than just a formality; it's a guide that outlines how your company operates and how it's managed. It plays a vital role in defining how company directors and shareholders interact, helping keep things clear and organised.

In drafting a company constitution, there are several important areas typically covered to ensure a well-rounded governance structure:

• Management Structure: Outline your company's organisational framework, roles, and responsibilities. This forms the basis for all operations and decision-making.
• Information about Directors: Detail the roles, powers, and responsibilities of the directors, who oversee the company's day-to-day management and strategic direction.
• Voting Procedures: Clearly define the voting rights of shareholders and the procedures for voting at meetings. These processes are essential for making key company decisions.
• Governance of Meetings: Set procedures for meetings, including annual general meetings (AGMs). This is necessary for effective management and legal compliance.
• Issuance of Shares: Specify how shares are issued. This impacts the company's capital structure and shareholder equity.
• Transfer of Shares: Establishing rules for share transfers helps control company ownership and ensures legal and regulatory compliance.
• Share Certificates: Addressing the issue of share certificates is vital for formalising share ownership and keeping accurate records.
• Details on the Company Secretary: If your company has a secretary, including their role and responsibilities is important for meeting statutory and regulatory requirements.

A well-prepared company constitution isn't just about meeting legal requirements; it's a practical tool for smooth business operations, offering a clear framework for making decisions and resolving conflicts. Consulting with legal experts or notary services is always recommended when creating or updating your company's constitution to ensure it meets current Australian corporate law standards and suits your business needs.

The Hague Convention: Certificate of Good Standing of a Company

They say the world is a global village. But one of the major problems in conducting business in various parts of the world is that there are so many different laws and regulations relating to companies.

International governments recognise these problems and have introduced various measures over the years to assist business. Probably one of the most significant measures, in a legal sense, is the agreement made by several countries known as the Apostille Convention or Apostille Treaty.

The Treaty (agreement) was drafted by the Hague Conference on Private International Law. It is generally known as the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents. One of the most important documents recognised under the Hague Convention is a Certificate of Good Standing of a Company.

One hundred and twelve countries are signatories to the Treaty and that number is growing. The most recent being Chile which signed the Treaty in August 2016. Australia signed the Treaty on the 16 March 1995. Two of the first countries to sign were France and the United Kingdom on the 24 January 1965.

Under the Treaty the Australian Department of Foreign Affairs and Trade (DFAT) is authorised to legalise documents for foreign governments. This legalisation is called an apostille. It constitutes an international verification of the document.

However, before the apostille is affixed by DFAT they require an Australian Notary Public to certify or verify the document.

When an Australian company wishes to register in a foreign country it must produce evidence that it is already registered in Australia. That’s when the Australian company would seek the services of an Australian Notary Public to certify that the company is of good standing. The Australian Notary Public issues a formal document known as a Certificate of Good Standing of an Australian Company.

But before issuing the Certificate of Good Standing the Notary Public must carry out his/her own investigations of the company and must also rely on declarations signed by the directors or secretary of the Australian company.

Some of the Notary Public’s investigations include carrying out a search at the Australian Securities and Investments Commission (ASIC) which is the regulatory authority in Australia for corporations.

The Notary Public obtains a company extract from ASIC relating to the particular company which has asked for the Certificate of Good Standing.

The Certificate of Good Standing is a comprehensive document but it is that Certificate that the foreign business community is entitled to rely on when doing business with an Australian company.