How to Reinstate a Business

Sometimes small businesses fall into inactive, or bad, standing with the state. The entity is then dissolved, sometimes through voluntary or involuntary dissolution. However, it is possible to reinstate a small business. An LLC or corporation that has lapsed may be reinstated and brought back into good standing once again.

Do you want to reinstate a business, but aren’t sure where to begin or what is necessary to bring your company back into good standing? Let’s take a look at how business reinstatements work and what it takes to open your doors up again to the public.

Why was my business dissolved?

Before you can reinstate a business, it’s important to understand why your company was dissolved. Businesses are often dissolved on a voluntary and involuntary basis.

• Voluntary. Perhaps a small business owner has decided to start a new business or believes this company has run its course. The owner then makes the decision to dissolve the company and formally close it with its state of incorporation.
• Involuntary. Something has occurred that allows your business to slip into bad standing with the state. This could range from forgetting an annual report deadline or a check that bounces to pay a filing fee. The business then falls into bad standing. If no action is taken to bring it back into good standing, the company may be involuntarily dissolved.

If you are still unsure as to why your small business was dissolved, check in with your local Secretary of State. They will be able to provide further information about how your company fell out of compliance. Once you understand what happened, you may give your company a second chance and file to reinstate a business.

What do you need to reinstate a business?

In general, we advise anyone interested in reinstating a business to file for reinstatement as soon as possible. However, it is also advised that small business owners check in with their local Secretary of State. Some states have time limits for LLC and corporation reinstatements. For example, if you would like to reinstate a business in Georgia then you would need to file the paperwork within five years of the company’s dissolution.

Filing to reinstate a business means filling out an application for reinstatement. Keep in mind, however, that each state may have additional specifications for reinstatement filings.

Does it take more than an application to reinstate a business?

The answer is yes in most states. For example, let’s say you’d like to reinstate your Kentucky LLC or corporation. According to the Kentucky Secretary of State, you would need to submit a reinstatement packet. This packet would consist of your reinstatement application, filing fee, and a reinstatement annual report. Additionally, if there were changes made to your address, you would need to include a statement of change of principal office and registered office. Finally, you must submit a letter of good standing from the Kentucky Revenue Cabinet. This packet is then mailed and processed with the Kentucky Office of the Secretary of State.

What if you wanted to reinstate a corporation in a state like Illinois? The Office of the Illinois Secretary of State advises filing Form BCA 12.45, Application for Reinstatement. This form must be filed for domestic and foreign corporations. Additionally, dissolved corporations must also file annual reports for the years that were not filed with the Illinois Secretary of State.

Be prepared, at the bare minimum, to file an application for reinstatement when you reinstate a business. This application may be mailed in or filed online. Remember that filing fees may vary depending on the state you’re filing with, too.

If you are unsure whether your LLC or corporation needs to file any additional documents, contact your local Secretary of State. They’ll be able to let you know a full list of the proper paperwork to file depending on the entity you’d like to reinstate. Be sure to clarify whether or not your business is a domestic or foreign entity. Foreign entities may need to follow separate guidelines for reinstatement.

Remember to pay off any outstanding fees!

One of the final steps in reinstating a business is to pay off any outstanding fees the dissolved business may have accrued. For example, these may include leftover taxes or penalty fees. These fees must be paid in full before the company is reinstated. Set aside a bit of money in order to make these payments, particularly if you know you may need to pay a hefty fee.

Why should I reinstate a business?

Now that you understand how to reinstate a business, you may wonder why it’s a good idea to reinstate a business. Some entrepreneurs may decide that reinstating a business is not necessary. Their company had a great run. Now, it’s time to look ahead toward new ideas and ventures.

However, small business owners that choose to reinstate their business often do so because it gives them a second chance. Reinstatement brings businesses back into good standing with the state again. Through reinstating a business, they receive liability protection and tax benefits from incorporation. Small business owners are ready to open their doors for business again, knowing their business is fully in compliance.