A Guide to Reviving Corporations and LLCs
In cases where a company gets dissolved involuntarily by the secretary of state (called “administrative dissolution”), it is often possible to reinstate or revive the company’s right to do business.
The Limbo of Administrative Dissolution
Even a voluntarily dissolved business is not a closed business (not yet), as it still must settle its existing affairs. An administratively dissolved business is in a similar though direr place.
An administratively dissolved company is inactive in the sense that it cannot legally do business, but its owners still can’t behave as though the company doesn’t exist and simply walk away. Bills, wages, and taxes must get paid. Federal and state tax returns must get filed. And most states will continue charging the company annual fees and late penalties if it hasn’t submitted past annual reports.
An administratively dissolved company, in other words, exists between two worlds. It isn’t absolved from the obligation to pay money out, but it’s in a position where it inevitably struggles to bring money in.
Add in that administrative dissolution threatens a company’s independent legal existence—its status as a legal entity distinct from its owners or shareholders—and you have a recipe for financial and legal disaster.
Reinstating Your Administratively Dissolved Business
If your business has been administratively dissolved by the state, it’s clearly in your best interest to reinstate its charter as soon as possible, but how should you go about it? Though the process differs a little from state to state, reinstatement typically involves
checking your company’s eligibility for reinstatement
identifying the problem that led to your company’s dissolution
filing the appropriate reinstatement paperwork with the secretary of state
We’ll deal with each of these steps in turn:
Step One: Check Your Company’s Eligibility
Since most states limit the time available to an administratively dissolved company to reinstate its charter, find out first if your company is still eligible to seek reinstatement.
In Georgia, for example, a business can seek reinstatement within five years of administrative dissolution, while New Mexico provides a two year window for reinstatement. North Carolina doesn’t set a limit at all, but the state will only protect a company’s business name for five years.
Step Two: Identify the Problem
Reinstating your business requires solving whatever problem led to its administrative dissolution in the first place, so it’s crucial to accurately identify that problem. The most common causes include:
not filing annual reports or paying state filing fees
not maintaining a registered agent or registered office
not paying state franchise taxes
If your company was administratively dissolved and you don’t know why, contact your secretary of state’s office to get the answers you need.
In most cases, however, the causes of dissolution won’t be a mystery. A secretary of state will send a company notice (sometimes called a “notice of grounds”) identifying how the company fell out of compliance and stating how long the company has to resolve the problem before administrative dissolution takes place. If your business has already been administratively dissolved by the state, you likely received that notice a long time ago.
Step Three: Apply for Reinstatement
Once you know why the state revoked your company’s charter, it’s time to apply for reinstatement with the secretary state. On this point, however, the states often part ways. Each state writes its own rules, creates its own reinstatement forms (if it has a form at all), and requires its own order of execution. That means you’ll need to tread carefully, research your state’s reinstatement requirements, and possibly seek professional assistance along the way.
Still, it remains possible to point your company, if only tentatively, in the right direction. If your company was dissolved for failing to file annual reports, for instance, submitting at least one such report will almost certainly play a role in your business’s reinstatement. Some states will require the submission of each missing annual report along with their filing fees (going back for however many years of reports your company missed), while in other states your company will only submit the delinquent report for the previous year.
Moreover, companies dissolved for failing to pay taxes may have to settle their debts with the state’s tax department before seeking reinstatement from the secretary of state. In Ohio, for example, administratively dissolved companies that owe state taxes deal first with the Ohio Department of Taxation. Once the company resolves its tax issues, the Department of Taxation will issue the company a Certificate of Tax Clearance to submit, along with a state filing fee, to the Ohio Secretary of State.
But, however the states may differ, you can expect to submit either a state reinstatement form from your secretary of state’s website (on paper or online) or a form of your own devising based on the secretary of state’s requirements for reinstating a dissolved entity. You should also expect to pay any outstanding state fees, taxes, and late penalties built up during the period of your company’s inactivity.
State By State Instructions On How To Revive a corporation Or LLC
Below you’ll learn how to revive a limited liability company (LLC) or corporation in any state. Choose your entity and click on the state name for detailed information on reviving your corporation or LLC.