LLC reinstatement is a complicated process that may confuse some who are not familiar with LLCs. Who can reinstate an LLC after it's been dissolved depends on how the dissolution was handled.
Why Was an LLC Dissolved?
There are two main types of dissolutions: voluntary and involuntary (administrative dissolution).
Voluntary dissolutions happen when the company members agree that they want to dissolve their LLC.
Involuntary dissolution happens when a limited liability company is in bad standing with the state and an outside party forces an end to the limited liability company, such as a court order or administrative proceeding by another government agency like the IRS or Department of Labor (DOL).
Every business entity has to be in good standing with the state.
The reasons they fail to maintain this status vary, from not filing the annual report (either for the calendar year or report year), maintaining a registered agent, failing to submit the right paperwork, and not paying franchise taxes or required state fees.
The Reinstatement Process
Suppose a limited liability company has been dissolved for more than three to five years (depending on the state).
In that case, it can be reinstated by filing a completed reinstatement form and submitting all of the necessary papers (left-over annual reports) promptly.
On top of this completed form, there might be a fee that needs to be paid as well.
You will also need to perform a business name search because there is a possibility that the name of your former LLC has been taken in the meantime.
The payment options allow you to pay the filing fee through a money order or a credit card.
Ensure that you have all of the necessary paperwork (annual report) with you before filing your reinstatement because there might be additional fees if needed to complete it.
You can submit payment and paperwork through certified mail or a courier and mail it to the same mailing address you used to fill out the form.
If the process is seen all the way through, the LLC can regain its active status.
Keep in mind that the LLCs that were administratively dissolved can be reinstated, unlike those dissolved voluntarily by the owners.
The reinstatement process differs from state to state, so it is best to contact the Secretary of State beforehand.
Whether you have a limited partnership, a corporation, or LLC, most states will only allow certain authorized persons or entities to reinstate an LLC with an appropriate state agency.
Who Can Reinstate a Dissolved LLC?
Reinstating a business can't be completed by just anyone. Only a person authorized by the state can reinstate an LLC.
However, that is not to say that anyone with access to the business paperwork and records may be able to get it reinstated for you.
While some states allow this type of filing agent or designated representative, other states require specific individuals such as managers, members, or officers who are still part of the LLC.
A Registered Agent
A registered agent is a person or business entity authorized by a company to receive legal service of process on its behalf.
The registered agent may be an employee, officer, director, or another representative of the LLC who resides in the state and has agreed to serve as the party's agent for purposes of accepting important documents such as lawsuits and government notices.
In many states, a designated registered agent can file completed reinstatement forms.
The registered agent might be the same as or different from the one designated in the LLC's dissolution unless failure to maintain a registered agent was a factor in its termination.
A Designee Acting on LLC’s Behalf
A business owner can appoint a designee to act on behalf of the LLC. If a business owner appoints himself as a designee, he will be representing both his personal interests and those of the LLC.
An individual reinstatement is necessary when only one member remains.
An example would include an LLC where all members have passed away or are otherwise incapacitated without any other successor to carry on the company.
A manager of an LLC can reinstate the LLC if they have not been dissolved for too long of a period.
A manager who has been suspended or removed from their position as a manager cannot be involved in any reinstatement process and cannot continue business operations without first getting reinstated by the other managers.
How Much Does It Cost to Reinstate an LLC?
The reinstatement of companies can cost as little as $20, but it is good to be aware that the amount may vary depending on where you are reinstating and the taxes or reports you've failed to file.
How Long Does It Take To Reinstate an LLC?
As for how long the process takes, if all of your documentation is in order and ready for submission, then this can take anywhere from a few days to six weeks or longer if there are additional forms required, they will be given to you once the process is started, so there will be no good standing fee until your LLC has been reinstated.
Can a General Partner Reinstate a Limited Partnership?
Yes. General partners can reinstate limited partnerships within five years of their dissolution, but the period may differ depending on the state.
The general partners must file a certificate of reinstatement with the Secretary of state to reinstate limited partnerships.
Can You Reinstate an Ein?
Yes. Your federal employer identification number is assigned to your business only, even if it's no longer in good standing with the state.
That means you can reinstate your EIN at any time. However, if the IRS finds out you've reinstated it improperly, they'll revoke your tax ID number again.
You could also be subject to fines or penalties for engaging in illegal activity by using a revoked business name/tax identification number on forms and documents submitted to other parties.
How Long Do I Have to Reinstate My LLC After It Has Been Dissolved?
The time to reinstate a dissolved LLC after administrative dissolution varies by state. Usually, you have a few years to pay franchise taxes and other fees, submit a reinstatement application, and restore your business entity. Always consult local regulations to confirm timelines.
Reinstatement of Dissolved Company...
If you're unsure about how to go about reinstating a small business in your state, contact an expert for legal advice.
It's important not to act on impulse and consider all of your options before making any decisions.