At Gross McGinley, our Business Services team has recently seen an increase in scams targeting small business owners and entrepreneurs. These hardworking individuals strive to keep their businesses compliant, making them prime targets for bad actors who exploit their desire to maintain their reputation and legal standing. One scam that has recently surfaced involves fraudulent solicitations for Certificates of Good Standing. Here’s what you need to know to protect yourself and your business.What Is a Certificate of Good Standing?A Certificate of Good Standing (or Subsistence Certificate) is a document issued by the Pennsylvania Department of State. It verifies that a business is properly registered, in compliance with state requirements, and authorized to conduct business. While this certificate is legitimate, it is rarely needed for most businesses. Common scenarios where it might be required include mergers, acquisitions, expanding to another state, or applying for certain licenses or financing. In Pennsylvania, a Certificate of Good Standing costs $40 and is valid for just 30 days. However, scammers are exploiting confusion around this document by falsely claiming it is essential for all businesses.How the Scam WorksScammers target new business owners by sending official-looking notices or emails that imply obtaining a Certificate of Good Standing is mandatory. They often: Charge exorbitant fees for the certificate (sometimes hundreds of dollars). Provide fraudulent or invalid certificates—or none at all. Use fake websites to collect sensitive payment information, which can lead to identity theft or financial fraud. Request checks, gaining access to your bank account and routing numbers.These scams are particularly aggressive with newly registered businesses, bombarding owners with lists of supposed “required” certifications to pressure them into paying.How to Protect YourselfTo avoid falling victim to these scams: Verify the Source: Enter the sender’s name, phone number, or physical address into the Better Business Bureau (BBB) website. A quick Google search of their address can also reveal its legitimacy. Know When You Need the Certificate: Most businesses do not require a Certificate of Good Standing for daily operations. If you’re unsure whether you need one, consult an attorney at Gross McGinley before proceeding. Work with Trusted Professionals: If you determine that you need this certificate—for example, during a merger or when expanding into another state—your legal counsel can guide you through obtaining it directly from the Pennsylvania Department of State.Why Involve Your Attorney?Obtaining a legitimate Certificate of Good Standing may be necessary in cases involving litigation or major transactions. In these situations, involving your attorney ensures compliance with all legal requirements and protects you from falling prey to scams.Stay VigilantAs scammers become more sophisticated, staying informed is your best defense. Gross McGinley’s Business Services team is here to help you navigate these challenges and safeguard your investment. If you have questions about Certificates of Good Standing or suspect fraudulent activity, contact Gross McGinley today.Protect your business by staying informed and working with professionals who prioritize your success.