How Do You Reinstate an LLC or Corporation?

A business such as an LLC or a corporation can be dissolved for several reasons. The owners may decide it is time to dissolve the company’s status. In other cases, outside factors, such as a government agency, say that administrative requirements—like licensing—have failed to be met, negating the LLC or corporate status.

However, dissolving the status of a business is not necessarily a permanent state of affairs. Under the right circumstances and following certain procedures, it is possible to regain the status of an LLC, or a corporation reinstated so that business owners don’t have to go through the administrative functions required to start a brand new business. But how is business reinstatement done?

The Conditions

A business can fall out of “good standing” and, should this state persist, may eventually be “administratively dissolved,” which means it is no longer considered a fully legal and compliant business entity. Businesses that are not in good standing suffer from a raft of possible negative consequences, such as being unable to obtain certain certificates of authority or even opening up the business owners to personal legal liability and lawsuits in court.

To achieve business reinstatement, it’s important to understand the exact cause of falling out of good standing or being administratively dissolved. The most common reason for this is for a business to drop out of compliance with some regulations.

Fixing the Problem

Whatever regulations a business is not in compliance with, this is what must be addressed first. Whether it is food safety standards for a restaurant or tax violations for a retail outlet, a business must take whatever steps are required for this specific issue to get back into compliance. Once the issue or issues have been resolved, the next step is to approach the particular state agency and file a reinstatement, sometimes called a revival, to complete the process.

The business reinstatement process varies from state to state, so the exact process in California will be different in New York State, for example. In general terms, however, there will usually be forms that require filing and fines or dues that need to be paid. Often there is also a filing fee involved.

After paying any required or overdue fees, auditing the form to ensure correctness, and then submitting and paying any filing fees required, provided that all requirements have been met, a business reinstatement occurs, and the status of the business is restored to “good standing,” able to operate legally.