Can You Reinstate Your Business After a Dissolution?

By Deborah Sweeney, writer
Aug 27, 2018
Image Credit: hafakot/Shutterstock

Here's how to get your business back up and running after being involuntarily dissolved.

Small businesses dissolve for a wide variety of reasons. Sometimes the owner wants to voluntarily pursue a new business venture, or the company may simply have run its course. Situations like these mean that the small business owner must file a dissolution. Doing so formally closes the business with the state of its incorporation, ensuring it is no longer an active entity.

What happens if your business has been dissolved involuntarily? For a business to be involuntarily dissolved, that means it has fallen into bad or inactive standing with the state. You might have forgotten to pay a filing fee or missed the deadline to submit your annual report. This causes your business to lapse into bad standing. Your business could become involuntarily dissolved if you do not take action to get it back in good standing.

The good news is that if this should happen to your company for any reason, you can still reinstate the LLC or corporation. Here's how to go about the process and get back on your feet.

1. Determine why your business was dissolved.

Chances are you already know why this happened from our examples listed above. There could be additional reasons as to why you fell out of compliance – maybe you misplaced an important government document or a check bounced for a payment that was never replaced.

Figure out the driving force behind your non-compliance. If you don't know why your business was dissolved, it is recommended that you contact your secretary of state for any further inquiries you have about the involuntary dissolution.

2. File and submit reinstatement forms to the state.

Now that you know why your business was involuntarily dissolved, it's time to get back into good standing. It's recommended that you check in with your secretary of state to figure out what paperwork you need to file and submit. For example, if you forgot to file your annual report, you'll likely only need to file an application for reinstatement and a delinquent form. Since each state is different, it's a good idea to have the secretary of state list all of the necessary forms so you don't forget to file any important documents.

3. Pay off any outstanding fees.

Once again, this practice will vary depending on the state where you do business – there is no universal set amount you can expect to pay. Some states only require a reinstatement form filing fee and a delinquency fee for late documents like annual reports if the business fell out of good standing. Others may add more penalties to your existing outstanding fees.

You can prepare yourself for this payment by setting aside a few hundred dollars. It may sound like a lot of money, but it's a good idea to approach the reinstatement process with a plan of action. This shows your secretary of state how serious you are about reinstating your business and bringing it back into good standing as soon as possible.

Deborah Sweeney is the CEO of MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.
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