You upload the World-Check data-file reguklarly, to ascertain whether any clients have new issues that represent increased risk. There are additional tasks which also help reduce risk; one of these is requiring that corporate clients furnish you with an original, sealed and stamped Certificate of Good Standing each year. Why would you want this document? Here are a few important reasons:

• The annual filing that must precede the issuance of a certificate of good standing generally includes a listing of officers, directors and the registered agent. If any of these have changed, the new names will be available in the juriswdiction's database, often Internet-based. If the client has quietly sold out his company to someone that you neither know, or have vetted, a radical change in officers will usually occur.  A failure to file this new information may indicate that the new owners wish to conceal this fact.
  

• Regulators inspecting compliance files during a visit welcome regular updates of the compliance function, as to both inside and outside auditors.
  

• Do company officers and directors become personally liable for corporate debts upon the dissolution of a company for failure to file annual reports in that jurisdiction?
  

• Your lawyers will need to know corporate status, and the exact company legal name, prior to initiating any litigation to recover unpaid debts, or for any other reason, like making a written demand.
  

• Is the company in receivership or liquidation, and they have neglected to tell you this? a failure to file a report could indicate financial distress.
  

• Has a newly-hired officer or director been arrested or indicted for criminal activity? By not reporting his name to the  government corporate service agency, they may be able to hide this.

• Personally, when a company has neglected to timely file its annual reports, and pay whatever fees are involved to government, it may indicate other, more serious problems.
  

• Does another corporation now control the client company? This will show up, usually in the designation of a new registered ( company) agent or Managing Director. What if a tax haven company now controls your client? Is that not grounds for a new risk assessment fo its business operations at the bank?

To sum up, there are many reasons why a company will want to conceal material events from the public, and from its bankers. By insisting upon a certificate of good standing each year, and following up with a check of corporate filing information, you reduce the risk of a nasty surprise later.