Another name for a letter of good standing is a “Certificate of Good Standing or Certificate of Existence”. It is a certificate which is issued by a government agency that verifies the complete registration of a business and total compliance with all the laws regulating businesses in Nigeria.
A letter of good standing can be issued to both business names, companies, and non-profit organizations in Nigeria.
As a legal document, it affirms that a registered entity has;
a. Filed its annual returns up to date
b. Has satisfied all legal requirements, and
c. Is licensed to do business within Nigeria.
Who needs a letter of Good Standing in Nigeria?
A letter of good standing is commonly needed by the following persons;
1. Persons who need a foreign qualification
2. Banks carrying out verifications on businesses or entities
3. Persons applying to Government agencies for foreign qualifications
4. Organisations trying to obtain funds from lenders or lending institutions
5. Investors considering investing in a registered entity in Nigeria
6. Individuals or organizations intending to renew their licenses or permits
7. If you are considering doing business in another territory or country from Nigeria
What are the benefits of a Letter of Good Standing?
A letter of good standing is important for the following reasons;
i. It provides assurances for businesses, financial institutions, and government agencies which has the intention of conducting business with such an entity.
ii. A letter of good standing gives foreign investors the assurance that such an entity is safe to invest in and that it will be profitable to work with.
iii. A letter of good standing comes in handy when such an entity is applying for loans, opening bank accounts, and conducting other business transactions.
Who gives a letter of good standing to companies in Nigeria?
The Corporate Affairs Commission is responsible for issuing a letter of good standing to companies in Nigeria.
How to Obtain a Letter of Good Standing (Requirements and Procedures)?
There are specific documents needed to kick-start your application for a letter of good standing, it is also important to note that this process is easily handled by accredited agents such as lawyers, accountants, and Chartered Secretaries.
To obtain a letter of good standing for your company, you must ensure that the company has filed annual returns up to date. Other requirements include the following;
i. Name of the company
ii. Registration number of the company or organization
iii. Statutory fee for the application process
CONCLUSION
Upon satisfying all requirements for your application, a letter of good standing will be issued by the Commission in favor of your organization.
A letter of good standing is a crucial document for registered organizations and can be used to demonstrate the overall credibility of your organization.
Need help with getting a letter of good standing for your organization? Reach out to us through the link on the Whatsapp icon or leave a message HERE, and we will be delighted to attend to you.
Click here to find out how to update other CAC information for your business
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