California Certificate of Status explained

A California Certificate of Status confirms the following about your business: Your business is a registered legal entity in California. It has not been suspended by the Franchise Tax Board. Your business is legally allowed to do business in California. You don’t need a Certificate of Status to conduct your normal, day-to-day business operations. The circumstances under which you might need one are:
Securing a new line of credit or funding from a bank
Opening a new business bank account
Purchasing insurance for your business
Entering into contracts with the state or another business
Selling or transferring some part or all of your business
Renewing certain permits or licenses
Expanding your business into another state or jurisdiction
To obtain a California COS, you must be a registered state entity. Corporations and California LLC's are some of the most common entities asking for a Certificate of Status. Limited partnerships or nonprofits may also need one from time to time. If you own a sole proprietorship, you cannot get a Certificate of Good Standing because that kind of business entity does not register with the state.