Which status must the franchise tax certificate show?

Which status must the franchise tax certificate show?

• A. Active status
• B. Inactive status
• C. Expired
• D. Pending

Answer: (A)

A franchise tax certificate must show Active status because this status confirms the entity is current with its franchise taxes and is authorized to conduct business in the state. An active certificate means the entity is in good standing and can legally operate, open bank accounts, enter into contracts, and meet state requirements. If the certificate shows something else—expired, pending, or inactive—the entity is not considered in good standing or authorized to operate, which can lead to penalties, suspensions, or inability to transact business.

A franchise tax certificate must show Active status because this status confirms the entity is current with its franchise taxes and is authorized to conduct business in the state. An active certificate means the entity is in good standing and can legally operate, open bank accounts, enter into contracts, and meet state requirements. If the certificate shows something else—expired, pending, or inactive—the entity is not considered in good standing or authorized to operate, which can lead to penalties, suspensions, or inability to transact business.