How to Reinstate a Dissolved LLC

Reinstating an LLC means filing the state's reinstatement application, catching up the reports it missed, paying the state's fees and penalties, and in some states getting a tax clearance first. The state then restores the LLC to good standing, in most states as if the dissolution had never happened. The cost ranges from under $50 in a few states to over $1,000 in others, and 17 states stop allowing it after 1 to 10 years. Here is how it works, state by state.

First, check what the state says about your LLC

Owners usually find out from a bank, a lender or a customer's vendor check that the LLC is no longer active. Before anything else, look the company up in the state's own business database. The record shows a status word, and the word tells you which path you are on:

• Active, in good standing: nothing to reinstate. If a report is past due, file it with its late fee and you are done.
• Delinquent, not in good standing, past due: the LLC still exists but has lost its standing. Most states cure this with the missed report and a penalty, no reinstatement application needed. Colorado, Michigan, New York and Pennsylvania work this way.
• Administratively dissolved, revoked, forfeited, cancelled, inactive: the state has ended the LLC's existence or its right to do business. This is what the rest of this guide is about.
• Voluntarily dissolved, terminated: the owners filed a dissolution themselves. Some states allow a revocation of dissolution within a window; otherwise the path is a new LLC.

The record also lists the reports on file, which tells you how many were missed, and the date of dissolution, which starts the clock on any time limit. Every state's business portal:

Why states dissolve LLCs

Administrative dissolution is the state's remedy for an LLC that has stopped meeting its filing duties. The trigger differs by state, but it is nearly always one of three things:

• Missed annual or biennial reports. The most common cause by far. 29 states dissolve, revoke or forfeit an LLC after a single missed report, typically a few months past the due date after a notice to the registered agent. Others wait for two or three.
• A lapsed registered agent. If the agent resigns or moves and no replacement is filed, the state has no one to serve, and most states dissolve the LLC after notice. In Arizona, New Mexico and Ohio, which have no LLC annual report at all, this is the main cause.
• Unpaid taxes or franchise fees. Texas forfeits an LLC that misses its franchise tax report; Delaware voids an LLC that stops paying its annual tax; California's Franchise Tax Board suspends an LLC for unpaid tax, separately from the Secretary of State.

While dissolved, the LLC generally may not carry on business other than winding up. Contracts it signs may be unenforceable, courts may refuse to hear its lawsuits, banks may freeze its accounts, and in many states the name becomes available to anyone else after a waiting period. Members can also lose the liability shield for business done in the gap, which is the reason not to let a dissolution sit.

How to reinstate an LLC, step by step

1. Pull the state record. Note the status, the dissolution date, the reports on file and the registered agent shown. If the agent has lapsed, you will name a new one on the reinstatement.
2. File the missed reports. Most states require every report the LLC skipped, each with its own fee. A few want only the most recent one or two, and Florida files the reinstatement in place of the missed reports. The table below says which.
3. Pay the penalties. Late fees on each missed report where the state charges them, plus any one-time reinstatement penalty (Kansas, Minnesota, South Carolina and Utah add one).
4. Get the tax clearance, where required. 7 states will not accept a reinstatement until their revenue department confirms the LLC owes nothing or has filed everything; 5 more require it in some cases. Request it first: it is the slowest step.
5. File the reinstatement application. Online in most states, through the same portal that shows the record. The application typically restates the LLC's name, its registered agent and principal office, and certifies that the cause of dissolution has been cured.
6. Confirm good standing. Check the record again once the state processes the filing, and order a certificate of good standing if a bank or lender asked for one (see certificate of good standing). Then put the next report date on the calendar, because the same miss twice is the most common way an LLC ends up here again.

LLC reinstatement fees, missed reports, tax clearance and time limits by state

The state's side of the cost, for all 50 states and DC. The total is what the state charges at the fewest missed reports that get an LLC dissolved there; more missed reports cost more in the states that bill each one. 40 jurisdictions publish a fixed formula, 8 set the amount case by case (interest, time since dissolution or an assessment), and 3 (Alabama, New York and Pennsylvania) do not dissolve an LLC for a missed report at all, so there is nothing to reinstate. The last column is the state's fee to form a new LLC instead, for the comparison in the next section.

Does reinstatement backdate?

In most states, yes. The LLC statutes of most states say that when a reinstatement takes effect it relates back to the date of the administrative dissolution, and the LLC resumes its activities as if the dissolution had never occurred. That matters for the gap: a contract the LLC signed while dissolved, a lease it kept paying, a vehicle it kept titled. Relating back is what lets those stand.

It is not universal, and the exceptions are the ones that hurt. Some states treat an LLC reinstated after a long gap, or after its time limit, as a new entity from the reinstatement date. Several state courts have held that members who did business in the company's name while it was dissolved can be personally liable for that business even after a reinstatement that relates back. And a tax forfeiture (Texas) or a tax suspension (California) has its own rules: contracts entered during the forfeited or suspended period may be voidable by the other party. If anything of value was signed in the gap, the state's statute, or a lawyer, settles whether the reinstatement cures it.

Reinstate the old LLC or form a new one?

When the reinstatement total is several hundred dollars and a new LLC in the same state costs $125 to $300, forming new looks cheaper. Sometimes it is. Weigh these before deciding:

• The money. Compare the state total in the table with the state's formation fee in the last column. In Massachusetts ($520 to form) and Nevada ($425 to form) a new LLC is not the cheap option it is elsewhere; in states with a low formation fee and a high reinstatement total, the arithmetic favours forming new.
• The name. In most states a dissolved LLC's name is protected for a period and then released. If the name has been taken, a new LLC cannot have it; reinstatement typically can, as long as the name is still available at the time you file, and some states require you to pick a new name on the reinstatement if it is not.
• What belongs to the old LLC. Its EIN, its bank account, its contracts and leases, its licenses, its credit history, its vehicle titles and its domain registrations are all in the old entity's name. A new LLC starts from zero and everything has to be moved or re-signed. Reinstatement keeps all of it, and the backdating described above is what makes the gap-period contracts safe.
• Tax history. A new LLC is a new taxpayer. If the old LLC owes the state tax, forming a new one does not make that go away, and the states that require tax clearance will often find the old balance through the owners.
• Time limits. Where the state's window has closed (17 states have one, from 1 to 10 years), a new LLC is the only option.

A rough rule many owners use: a company with contracts, a bank account and a name worth keeping reinstates; a company that never really operated forms new. Forming new is a formation filing like any other, covered in how to start an LLC.

Texas: the tax clearance letter

Texas is the clearest example of a tax-first reinstatement. A Texas LLC that misses its franchise tax report (the Public Information Report that every LLC files even when it owes no tax) is forfeited by the Comptroller and then by the Secretary of State. To reinstate, the LLC first files every missed franchise tax report with the Comptroller and pays any tax, penalty and interest; for most small LLCs below the no-tax-due threshold the reports themselves cost nothing. The Comptroller then issues a tax clearance letter. Only with that letter will the Secretary of State accept the reinstatement application and its $75 fee. The letter is the slow part; the Secretary of State's filing is typically quick once it is in hand.

The other tax-clearance states (Hawaii, Indiana, Kentucky, South Carolina, South Dakota and West Virginia always; California, Mississippi, Montana, New Hampshire and New Jersey in some cases) work on the same principle: the revenue department signs off before the business registry restores the company.

After reinstatement

Reinstatement restores the record; it does not fix what caused the lapse. Three things to do in the following week:

• Fix the registered agent. If the state's notices went to an agent who had moved or resigned, that is why nobody saw the dissolution coming. Name an agent who will be at the address and will forward mail, whether that is you or a service (see do you need a registered agent).
• Calendar the next report. Each state's due rule, fee and late penalty is on its cost page (linked from the state names in the table).
• Tell the bank and anyone who flagged it. A fresh certificate of good standing closes the loop with whoever found the problem.

If, having read this far, you would rather close the company properly than restore it, how to dissolve an LLC covers the voluntary route, including the states that require the LLC to be in good standing before they will accept a dissolution.