Administrative dissolution is an action taken by the Secretary of State that results in the loss of a business entity’s rights, powers and authority. Reinstatement is the action taken that restores an administratively dissolved business entity’s rights, powers, and authority.
Can you sue a corporation that has been administratively dissolved?
Suing a dissolved corporation is possible because the company still legally exists. Dissolution is only the first step. Regardless of the legal structure of your business, you must follow the proper procedures. DBAs and sole proprietorships have fewer steps to follow but are not immune to lawsuits.
What does inactive dissolved administrative?
Inactive dissolution refers to dissolving a business that is inactive. When a business dissolves, it no longer has to file income tax returns or annual reports, so those aspects are the main benefits of electing to dissolve, rather than simply becoming inactive.
Can you reinstate a dissolved corporation?
If your corporation was involuntarily dissolved because of an administrative oversight, your state’s laws may allow you to “cure” the deficiency within a specified time period by filing certain documents with the secretary of state’s office and paying fees to reactivate the company.
How do I reopen a dissolved corporation?
You will need to file a certificate of revival, which is also known as an application for reinstatement, articles of revocation of dissolution, or an application for revival with the state.
Why would a business be dissolved?
Company directors who want a company struck off the register (also known as a company being dissolved) want to have a company marked down as non-existent and still retain full control of the business. Dissolution is usually voluntary by the members (shareholders) if they have no further use for the company.
How do you dissolve a corporation?
There are six common steps to dissolving a business.
- Step 1: Corporation or LLC action.
- Step 2: Filing the Certificate of Dissolution with the state.
- Step 3: Filing federal, state, and local tax forms.
- Step 4: Notifying creditors your business is ending.
- Step 5: Settling creditors’ claims.
Can a dissolved company take legal action?
When a company is dissolved, its remaining assets pass to the Crown. It’s not possible to take legal action against a company that doesn’t exist, so in order to make a claim against such a company, it’s first necessary to get it reregistered. To do this you’ll need to get a court order.
What happens if you do not dissolve a corporation?
If not dissolved, the company will continue to incur penalties for outstanding taxes. Owners may become personally liable for any outstanding tax liability as a result.
When can a corporation be dissolved?
A state may bring an action to dissolve a corporation on one of five grounds: failure to file an annual report or pay taxes, fraud in procuring incorporation, exceeding or abusing authority conferred, failure for thirty days to appoint and maintain a registered agent, and failure to notify the state of a change of …
What happens when a corporation is dissolved by the state?
When a corporation is administratively dissolved by the state, “a director, officer, or agent . . . purporting to act on behalf of the corporation is personally liable for the debts, obligations, and liabilities . . . arising from such action and incurred subsequent to the corporation’s administrative dissolution.” Fla.
What happens to a business after an administrative dissolution?
CONSEQUENCES OF ADMINISTRATIVE DISSOLUTION At common law, and under the early statutes, a business entity ceased to exist as an entity upon the effective date of its dissolution. However, today an administratively dissolved business entity continues to exist—but only for the limited purpose of winding up its affairs.
When to apply for reinstatement of a dissolved Corporation?
A corporation administratively dissolved may apply to the Secretary of State for reinstatement within five years after the effective date of such dissolution.
How to dissolve an administrative corporation in Georgia?
The process of administrative corporate dissolution in Georgia is found at O.C.G.A. §§ 14-2-1420 -1423. Pursuant to those sections, the Secretary of State may commence a proceeding to dissolve a corporation administratively if:
