Reinstatement is the process of returning an inactive, administratively dissolved, revoked, or non-compliant company to active status or good standing with the state.
Business entities have ongoing compliance obligations in their state of formation and, if applicable, in any states where they are foreign qualified. These requirements may include filing annual, biennial, or periodic reports, maintaining a registered agent, paying state filing fees, paying franchise taxes or other state-imposed fees, and updating required company information.
When a company fails to meet these requirements, it may fall out of good standing. If the issue is not corrected, the state may administratively dissolve the entity, revoke its authority to do business, suspend its status, or otherwise place the company in an inactive or non-compliant status.
A company that is not in good standing may face several consequences, including:
- Inability to obtain a Certificate of Good Standing, Certificate of Existence, or Certificate of Status;
- Loss of authority to conduct business in a foreign qualification state;
- Late fees, penalties, interest, or additional filing costs;
- Restrictions on maintaining a lawsuit in the state;
- Difficulty obtaining financing, closing transactions, or completing due diligence; and
- Potential risk to the company’s limited liability protection, depending on the circumstances and applicable law.
The reinstatement process generally requires the company to resolve all outstanding compliance issues and file the necessary reinstatement documents with the state. This may include filing past-due annual or periodic reports, paying unpaid fees or taxes, appointing or updating the registered agent, obtaining tax clearance, and paying reinstatement fees.
The requirements for reinstatement vary by state and entity type. In some states, reinstatement is available only for a limited period of time after administrative dissolution or revocation. If too much time has passed, the company may need to form a new entity, requalify, or pursue another corrective filing option.
Accumera can assist with reviewing the company’s status, identifying outstanding state filing requirements, preparing reinstatement documents, coordinating required state filings, and helping return the company to active or good standing status where reinstatement is available.
Contact us now to find out about reinstating your company or for more information on the process.
