There are a few reasons you may need to reinstate a corporation, and for each state the process will look different. It’s important to know why the corporation was dissolved initially as this will inform your approach to reinstatement.
While personal, professional, and legal reasons for dissolution may vary, there are two ways a corporation can dissolve itself: voluntarily and involuntarily.
All states have some process for reinstating corporations after they have been dissolved, but it will depend on why and how the dissolution happened. Many states have time limits after the dissolution has taken place in which you have to reinstate. Most states will also require additional fees or penalties to be paid to get your business reinstated after it has been inactive. Since each state is different, you should contact your Secretary of State’s office to inquire about the specifics for your case.
Reinstatement after a voluntary dissolution: Typically, it’s easier to reinstate a corporation that has been voluntarily dissolved. In some cases, states offer a short window of time (around 90 days) in which you can withdraw your articles of dissolution and reinstate your corporation just as it was before. This allows shareholders and members time to look over the documents and change their minds if they can’t get a majority vote for dissolution.
Reinstatement after an involuntary dissolution: If a corporation has been involuntarily dissolved, there’s generally more steps to be reinstated which usually involve paying fines, administrative fees, and reinstatement fees. Most states will also impose a window of time after dissolution that you can reinstate which is up to five years in some states. Within this time, you can reinstate with the same name and file number if you’ve fulfilled all other requirements. If you exceed the time allotment, you may be able to form a new corporation with the same name, but you would be assigned a new file number.
If you’ve recently dissolved a corporation, either voluntarily or involuntarily, it will now be in inactive status. If the company was dissolved voluntarily it’s possible the owner or shareholders changed their mind and now wish to reinstate the business. It’s also possible that there’s been a major change in management or ownership and you want your new corporate filing to reflect this.
If the corporation was involuntarily dissolved it’s usually because you failed to file paperwork on time, failed to pay administrative fees, or failed to pay taxes on time. All of these factors would cause your entity to be listed as “inactive.” In most cases, if not a lot of time has elapsed, you can get your corporation reinstated fairly easily.
The first thing you should do to reinstate your corporation is to contact the Secretary of State’s office to understand exactly why your business is listed as inactive, and what steps you’ll need to take to reinstate it. Below is the general process you’ll take, but it will be different for each state.
The costs associated with reinstatement will differ based on the state you’re in and the reason for dissolution.
Common Costs Associated with Corporate Reinstatement:
If you need help reinstating your Delaware corporation, an experienced business lawyer can help! Schedule a free consultation by contacting our team of business professionals today!