That message usually means the Mac is running the Mac App Store build of Office, which does not support a one-time Office 2021 license. Mac App Store Office apps require a Microsoft 365 subscription for create/edit features. A perpetual Office 2021 license must be used with Office apps downloaded directly from Microsoft.
Do this:
- Close all Office apps
- Quit Word, Excel, PowerPoint, and Outlook.
- Remove the current apps
- Open Finder > Applications.
- Find Word, Excel, PowerPoint, and Outlook.
- Control-click each app and choose Move to Trash.
- Reinstall Office from Microsoft, not the Mac App Store
- Since the license already appears in the Microsoft account, install Office from the Microsoft download/install path for Office on Mac.
- If needed, use the direct Microsoft installer package for Mac:
- Office 2021 for Mac Installer
- Open an Office app and activate
- After installation finishes, open Word.
- Sign in with the same Microsoft account that shows the Office 2021 purchase.
- The app should activate against the perpetual license.
- If it still does not activate, remove older Mac license files
- Older Office license data on Mac can interfere with activation, even after reinstalling.
- Remove the old Office license files on the Mac, then open Word again and sign in to reactivate.
- If the apps recently became read-only after an update
- Check the macOS version first.
- For current Office activation/licensing issues on Mac, Microsoft says to be on macOS 12 or later and then update Office.
- If Office was installed from microsoft.com, open Finder > Applications > Microsoft AutoUpdate and install updates.
Important points for this case:
- Office 2021 is a one-time license and does not require Microsoft 365.
- Installing “the latest version” is not enough if the installed apps are the App Store version.
- On Mac, Office 2021 may also fail to activate if older license files are still present.
- Office 2021 is still installable from the Microsoft account purchase history on supported devices.
If the current install came from the App Store, the fix is to remove those apps and reinstall the Microsoft-downloaded Office build. That is the key step for the exact error shown.