When a business is “Not in Good Standing”, it means that the business entity is noncompliant with one or more Iowa laws that apply to businesses and their responsibilities in this State. There are a few risks associated with having a business that has lost its Good Standing:
- Possible loss of access to the courts: A company that is not in good standing may not bring a lawsuit in that state until good standing is restored.
- Difficulties in securing capital and financing: Many lenders view a loss of good standing as an increased risk and may not approve new financing.
- Tax liens: Adverse entity status due to non-payment of taxes can result in a tax lien.
- Loss of name rights: If a company is sidelined due to loss of good standing, it is possible that other companies may be able to acquire the rights to its name.
- Fines and penalties: There most likely will be fines and penalties imposed on companies that are not in good standing.
- Business identity theft: Some thieves may look at the state’s records to see which companies are not in good standing because they assume no one is paying attention. They may then “use” the company’s identity to commit fraudulent acts.
If your business lost its Good Standing status, please contact the Secretary of State’s office at (515) 281-5204.