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Written by : Laure Jacobs |
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Thanks for this great article
Thanks for your comment Tod Delguidice, have a nice day.
- Laure Jacobs, Staff Member
can you reinstate your company after it's been dissolved my name is andrew ayers i'm a small business and estate planning lawyer who works in minnesota and new york and today we're going to talk about what happens to your company after it's been dissolved if you want to reinstate it there's two categories of dissolutions when you're dealing with companies one is a voluntary dissolution the second is an involuntary dissolution a voluntary dissolution is when your company chooses to shut down maybe you and your partners have decided you're not going to go any further or it's just your business and you've said you've had enough and you're going to go back to a different job or maybe just start a new company involuntary dissolutions happen in two main cases one if you fail to pay taxes your local state may just shut down your company administratively and the second is if a shareholder someone who owns the company maybe a co-owner or a partner decides that they want to dissolve the company so they bring a lawsuit so whether it's a voluntary or an involuntary dissolution even if your company is dissolved in the end so a voluntary one will go through the state and the state will decide that it's dissolved an involuntary one will allow you to either pay your taxes or go through a full lawsuit and have a judge say whether or not the company has to be dissolved but at the end of the road no matter which path you've taken there are ways you can reinstate your company if your company's been involuntarily dissolved there's going to be a much higher threshold here so especially if it's after a lawsuit and the company has been shut down by a judge you may have less options however if you chose to shut down the company or it's been dissolved simply because you didn't pay taxes there may be a road forward for you in your business first thing you need to do is contact your state and find out why your company was dissolved especially if it's as simple as paying taxes you have a direct path forward at that point the second thing is if it was if it was dissolved because filings weren't done or fees weren't paid then know you need to get your filings up to date and get your fees paid so the third thing you'll need to do is file those documents and pay those fees now a warning here if you haven't been paying taxes or you haven't been paying state fees there's probably going to be late fees that have been accruing this is a 10 or 20 year business and you've just been operating it and haven't made your filings those fees can really add up once you've filed your documents or you've paid your fees find out what's next from the state often they'll give you a certificate or a letter saying that you've now complied with the requirements and you're ready to be an active company again and then the fifth thing you'll need to do is file whatever they want you to file at that point your fees are paid your documents have been filed find out from the state what else has to be done and after you've done that comes the most frustrating part and that is simply you've got to wait for the state to make you an active company again now this doesn't mean that you can't trans transact business and you can't do other work for your business it just means that the state is going to treat you as a business that has been dissolved but once you've gone through these steps and you've got your documents filed you should be back in good standing and be able to continue business and make your yearly filings many people ask me why does it matter if my company's dissolved or not if i haven't paid taxes i'm still running my company i should be okay right well first they can obviously come after you for tax fraud if you haven't been filing taxes and your business has been making money the state's going to want their taxes and secondly if you file find out that you need to file a lawsuit against somebody if your company has been dissolved you can't legally bring a lawsuit against somebody likely the defendant will bring up this issue as part of the lawsuit and say wait a second that company has been dissolved they can't bring a lawsuit against me now this may not be fatal to your lawsuit in many states you can actually reinstall your company do your filings pay your fees and continue with the lawsuit however if your company is treated as inactive or dissolved a court can dismiss your case and say you're not an active company and you haven't done taken the steps necessary to get it back there's two ways you can handle this first is you could just keep operating say you know what my company's dissolved and you can hope for the best but the reality is at some point the state's going to catch up with you the tax office is going to catch up with you a lawsuit will catch up with you someone will catch up with you so the second way to get around this and get yourself back onto good standing is work with a professional work with your accountant to get those taxes filed work with an attorney to get your documents back in order a lot of times it's as simple as you set up the company and just never did anything else maybe you went to a website they gave you some forms and you just looked at them the computer you printed them out and never did anything after that so in this case what you can do is work with an attorney to get your documents in order get everything signed get your filings up to date with the state and you and your company can move forward just because it was dissolved doesn't mean you can't reinstate your company and keep operating
Thanks turbion4 your participation is very much appreciated
- Laure Jacobs
About the author
I've studied agricultural economics at The University of Texas Health Science Center at Houston in Houston and I am an expert in brownian dynamics. I usually feel blank. My previous job was computer applications engineer I held this position for 16 years, I love talking about lego building and jumping. Huge fan of Elizabeth Edwards I practice water polo and collect coins.
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