A certificate of fact is a document issued by a state business register stating something the register knows to be true about an entity: that it exists, that it is in good standing, that a particular document was filed, or that a name change occurred. Most states call the common version a certificate of good standing or a certificate of status. Texas is the main state that says certificate of fact.
What the certificate states
The common form certifies that the entity is validly existing under the law of the state and, where the state issues it that way, that it is in good standing as of the date of issue. Some registers will also certify specific facts on request: that a named document was filed on a named date, that the entity has changed its name, or that a merger took effect. The certificate carries the register's seal and a date, and both matter, because it speaks only as at that date.
Texas and the certificate of fact
Texas issues certificates of fact through the Secretary of State, and the status version is the one usually being asked for. Because the Texas yearly obligation sits with the Comptroller rather than the Secretary of State, a Texas certificate of fact about existence does not by itself confirm the entity's tax standing. An entity can hold a clean certificate of existence and still be forfeited by the Comptroller, so both need checking when the point is whether the company is entitled to transact business.
Where the certificate is actually required
The document is usually requested by someone other than the company: a bank opening an account, a state where the company wants to register as a foreign entity, a party to a financing, or a counterparty on a substantial contract. Foreign qualification is the most common trigger, because a state being asked to admit an out-of-state company wants proof from the home state that the company is real and current. A certificate more than a few weeks old is often refused.
Questions people ask about certificate of fact
Is a certificate of fact the same as a certificate of good standing?
In substance yes. Texas and a few other states use the certificate of fact wording for what most states call a certificate of good standing or status.
Does a Texas certificate of fact prove tax standing?
No. Texas tax standing sits with the Comptroller. An entity can hold a certificate of existence from the Secretary of State and still be forfeited by the Comptroller.
Why do banks ask for one?
It is proof from the state register itself that the entity exists and is current, dated and sealed. A record printout is not the same thing.