How to Reinstate Your Business
- What is a reinstatement?
- How do you file for reinstatement?
- Why would a small business owner choose to reinstate a business?
Over the last few months, we’ve explored what it means to formally shut the doors to your business and file for a dissolution. The first part of our series covered pre-dissolution prep work, including better understanding articles of dissolution and how to file this paperwork with the state. We also discussed the differences between voluntary and involuntary dissolution, since not all businesses dissolve in the same manner. In part two, we helped walk entrepreneurs through the process of dissolving a business. From completing the IRS closing a business checklist to paying off any remaining business debt, this dissolution guide helped business owners shut their doors for good.
But is it possible to open your doors again? Yes! This is also known as a reinstatement. In our third and final part of the business dissolutions series, let’s take a look at how a dissolved company may reinstate itself and get back to good standing with the state.
What Does It mean to Reinstate a Business?
The easiest way to describe how a reinstatement works is that it brings a business back to where it was before it fell out of compliance. Once a company has been dissolved, whether that was on a voluntary or involuntary basis, the business is considered no longer active. However, filing for a reinstatement helps restore the company back to active status with the state. Not only does reinstating a business allow the company to open its doors for business again, but it also puts it back in good standing.
Why Reinstate a Business?
As mentioned in part one of this series, some businesses don’t need a reinstatement. They might have run their course, or the owner is interested in pursuing other ventures. However, for those businesses that fall into bad standing with the state and are involuntarily dissolved, a reinstatement provides the company with a second chance. The owner acknowledges the mistake made that led to their business dissolution, whether it was filing an annual report late or a bounced check for a filing fee. The mistake won’t be made again, and the reinstatement provides another chance to succeed in business.
What’s the Best Time to Reinstate a Business?
MyCorporation’s general advice has always been to reinstate a dissolved business as quickly as possible. Some states, such as Georgia, even have a time limit for reinstatements. If a Georgia corporation or LLC has been dissolved, then the reinstatement filing must be done within the next five years.
Reinstatement Filing Tips
Certain aspects of reinstatement filing generally remain the same. Previously dissolved entities file an application for reinstatement and pay a filing fee. However, reinstatement varies depending on the state, entity, and even the method you choose to reinstate a business. While this guide does not cover all 50 of the U.S. states, it gives us insight into the rules for reinstatement throughout various states.
Tailored Funding Options for You
Let’s use Utah’s Secretary of State as an example. LLCs, limited partnerships, and limited liability limited partnerships may all use an online business reinstatement portal to reinstate their businesses. However, domestic corporations may not be reinstated online and require paperwork form submissions. Before filing to reinstate a business, make sure to check in with the local Secretary of State to ensure you are following the proper reinstatement instructions as per your entity formation.
The state of Vermont, for example, provides an online business service center to reinstate a business online. Additionally, the state offers the ability to file for reinstatement by mail. If you wanted to reinstate a business in Tennessee, however, you would have even more filing options. Applications for reinstatement may be e-filed, printed and mailed in, and even walked in to the Tennessee Secretary of State’s office. Check in with your local Secretary of State to see what filing options are available and choose the method that works best for you.
Did you know that if you want to reinstate your LLC or corporation in Montana you need to obtain a Title 15 Tax Certificate? This document is proof to the state that all taxes imposed to Title 15 have been paid in full. Carefully review any additional paperwork your business may need to be reinstated by the Secretary of State.
These also vary across states, from moderate to slightly expensive fees. Utah has a $70 filing fee while the state of New York’s reinstatement filing fee is $55. What’s the filing fee for dissolved corporations and LLCs in Georgia? $250. Unfortunately, there is no flat fee across all 50 states to pay when reinstating your business. It’s advisable to calculate your filing fee with the help of your local Secretary of State.
Payment of Additional Fees
Do you still owe tax or penalty fees for the dissolved business? Remember that these taxes and fees must be paid in full before filing to reinstate. If your business has any outstanding returns, these must be filed as well.
Domestic Entities vs Foreign Entities
While most states accept the reinstatement of domestic entities, foreign entities may need to follow specific rules. Reach out to your Secretary of State for additional guidelines.
Can I Get Help with My Reinstatement?
Absolutely! Third party organizations, like MyCorporation, are here to assist you. We can help complete your reinstatement application, figure out what fees you need to pay to the state, and submit the paperwork on your behalf. We’ll keep you updated as you wait on the status of your reinstatement and make sure you’re the first to know when the business is back up and running again.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.