Why Can’t I Reinstate My Florida LLC? (Most Common Reasons)
If you’re an LLC owner, you might find yourself in the unfortunate situation of trying to reinstate your Florida Limited Liability Company (LLC) but facing obstacles.
Understanding these reasons is crucial to avoid pitfalls and ensure smooth reinstatement.
As an experienced professional well-versed in Florida's business regulations, I've encountered numerous cases where individuals face the same challenges reinstating their Florida LLCs.
I, therefore, partnered with my fellow business formation experts and did comprehensive research to answer the question at hand.
In this informative article, we shed light on the most common reasons you might be unable to reinstate your Florida LLC.
Quick Summary
- Common reasons you cannot reinstate your Florida LLC include administrative dissolution, taking the LLC name, voluntary dissolution, failure to meet requirements, pending legal actions, time limitations, and judicial dissolution.
- It is recommended to consult an attorney or the Florida Department of State for accurate and up-to-date information on reinstatement procedures.
- According to the Department of State, over 60% of administratively dissolved Florida LLCs fail to seek reinstatement, highlighting the importance of regulatory compliance.
- From my analysis, factors to consider before attempting to reinstate your Florida LLC include tax delinquency issues, lack of a registered agent, and incorrect name.
The Reasons Why You Cannot Reinstate Your Florida LLCs
It's important to note that the specific rules and procedures for reinstating a Florida LLC may vary.
Therefore, consulting an attorney or the Florida Department of State for accurate and up-to-date information is recommended.
However, there are situations when you can't reinstate your LLC after dissolution.
Here are the reasons you might not reinstate your LLC in Florida:
1. Administrative Dissolution
In Florida, an LLC that has been administratively dissolved cannot conduct business except for activities necessary to wind up and liquidate its affairs, as highlighted in the state's legal framework [1]. According to the Department of State, over 60% of administratively dissolved LLCs in Florida do not proceed to reinstatement, emphasizing the critical nature of compliance with state regulations to maintain active business status.
Administrative dissolution occurs when an LLC fails to comply with certain statutory requirements. These requirements may include submitting annual reports or paying required fees.
Once administratively dissolved, the company loses its legal status and cannot be reinstated.
2. Your Florida LLC Name Has Been Taken
Every limited liability company in Florida has to have a unique name under which it conducts business in the state.
If a business entity is dissolved and doesn't regain its active status, the LLC name becomes available for other business entities.
You can't revive your LLC or reinstate it without filing a company name availability search first, which makes the one-year rule work.
Your company must restart under another name and appoint a new registered agent.
3. The LLC Was Voluntarily Dissolved
If you voluntarily dissolve your Florida LLC, reinstatement may be possible under certain conditions.
However, if the dissolution was completed according to state procedures and requirements, you might be unable to reinstate it.
Voluntary dissolution of a Florida LLC means that the LLC has been officially removed from existence through its members agreeing to dissolve it.
Voluntary dissolution doesn't terminate ownership interests in the company property or obligations incurred by members during its life cycle.
You should, therefore, understand how this may impact your relationship with other members or creditors before you agree to dissolve the LLC.
It is essential to consult the Florida Department of State, Division of Corporations, for guidance on whether your LLC can be reinstated after voluntary dissolution.
4. Failure to Meet Requirements
Some common requirements include:
- Filing delinquent annual reports
- Paying outstanding fees
- Rectifying any issues that led to the dissolution
According to Florida law statute, dissolution may occur due to missed annual report fees with the Florida Department of State's Sunbiz website [2]. According to the Florida Department of State, in 2024, over 30% of LLCs faced administrative dissolution for failing to file their annual reports on time, underscoring the critical nature of compliance with filing deadlines.
If you fail to fulfil these requirements within the designated time frames, your LLC may not be eligible for reinstatement.
5. Pending Legal Actions
If there are pending legal actions against your Florida LLC, it may hinder the reinstatement process.
The state may require you to resolve these legal matters before considering reinstatement.
Legal actions can include lawsuits, judgments, or unresolved disputes that could affect the LLC's ability to operate legally.
6. Time Limitations
Reinstatement of a dissolved Florida LLC typically has time limitations. There is often a specific period during which you can apply for reinstatement after dissolution.
If you exceed this time limit, the state may no longer allow you to reinstate your LLC and may require you to form a new one instead.
7. The LLC Was Judicially Dissolved
The sole reason judicial dissolution occurs is because of action taken by either state or federal authorities.
The reasons may include:
- Involuntary bankruptcy proceedings
- Criminal convictions for business crimes committed by managers and directors
- Failure to abide by tax filing deadlines
- Failure to maintain records
It is crucial to note that even though a manager or member can try to reinstate the Florida corporation, their actions after the date on which the court's order for judicial dissolution will be void.
What Now?
If you encounter obstacles with reinstating your LLC, you must consult a reputable and experienced Florida business attorney first.
A well-versed lawyer can be your best ally when dealing with the legalities of reinstating an LLC, especially one that no longer has an active status or has been administratively dissolved due to tax delinquency.
The following factors are some of the issues you may want to consider before you attempt to reinstate your Florida LLC:
- Tax delinquency issues - Dissolution of an LLC can also be due to unpaid taxes. In this case, you will need the help of an attorney who specializes in tax law to deal with your delinquent returns and other outstanding liabilities.
- Lack of a registered agent - If you stop paying your agency fee, the Department of State will suspend the registration until all outstanding fees are paid. In this case, appointing another agent as soon as possible is critical.
- Incorrect name - If your business was originally registered as ABC Company and has undergone a name change, you must file an amendment to reflect the new business entity. Otherwise, your LLC may be inactive or dissolved under its former identity.
What to Expect if You Can Reinstate an LLC?
You must expect to submit a Limited Liability Company Reinstatement to the Division of Corporations to reinstate an LLC.
There is a $100 reinstatement fee and a $138.75 annual report fee for each year or part of a year during which your company was dissolved, even if your LLC has only been disbanded for a short period.
"A Florida LLC that has been administratively dissolved can be reinstated and authorized to resume business by filing a Limited Liability Company Reinstatement with the Division of Corporations at any point following its dissolution."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
Related Articles:
- Reinstatement of Dissolved Company
- How Much Does an LLC Cost in Florida
- Florida LLC Formation
- Open an LLC in Florida
Reinstatement Application
The reinstatement form can be found on the Florida Department of State website in the form of an electronic reinstatement application.
Again, take note of the reinstatement fee before submitting this document.
The information required for the Florida reinstatement form application includes the following:
- Document number
- Name(s) and address(es) on file with the Florida Department of State. If there has been a change since your initial registration, list the prior name/business address used for this business
- Federal employer identification number (FEIN)
- The email address where you should deliver your filing confirmation to
- Entity's principal office address and mailing address
- Registered agent name and physical street address
- The names and addresses of the owners
- Your signature and date of your application
Once the Florida Department of State receives your completed reinstatement form, you will receive a confirmation letter with an assigned filing number and relevant reference numbers.
Florida reinstatement application can be submitted once you create a Sunbiz E-File account.
FAQs
How Long Does It Take To Reinstate an LLC in Florida?
It may take several weeks to reinstate an LLC in Florida. Business entities that have been dissolved or revoked for more than a year need up to 3 business days for the reinstatement to appear. This applies if paid by credit card or a Prepaid Sunbiz E-File Account.
How Much Does It Cost to Reinstate an Inactive Florida Corporation?
It may cost as high as $600, plus a $150 penalty for each missed Annual Report to reinstate your Florida corporation.
It is advisable to consult with the Florida Division of Corporations or a professional business attorney to obtain accurate and up-to-date information regarding the costs involved in reinstating a corporation.
Do I Need to Reinstate My Business License in Florida?
You need to reinstate your business license in Florida if it has been suspended or revoked. To do so, contact the appropriate government agency responsible for business licensing in Florida and follow their reinstatement procedures. Failure to reinstate your license can result in legal consequences and hinder your ability to operate your business legitimately in the state.
References
- https://law.justia.com/codes/florida/2002/TitleXXXVI/chapter608/608_4481.html
- https://dos.myflorida.com/sunbiz/manage-business/efile/annual-report/
