No matter if your business was involuntarily forfeited, dissolved, or terminated, reinstating your business in Texas requires several different steps.
In today’s post, I’ll explain the step-by-step process for reinstating your Texas business.
Why do I need to reinstate my business in Texas?
The short answer: You need to be in “good standing” as a business in the state of Texas in order to lawfully do business there.
The long answer: Depending on the state where you’re starting your LLC or corporation, you have to complete formation documents in that state. These are often called “articles of organization,” but some states use other names. In Texas, this is called “Certificate of Formation.”
Also, if you’ve started a business in one state, you can also file formation documentation with other states where you plan to do business.
Once the state approves your business status, then you can conduct business in that state as long as you continue to follow the state’s rules and regulations that will keep your business in good standing with that state.
However, if you don’t keep up your good standing status, then the state can take away your right to do business in that state.
States vary on timing and regulations as well as the terms they use when revoking your status. Even within a state, there may be several different terms used when your business is no longer in good standing.
For instance, in Texas, a business goes into “forfeited existence” status if it failed to file a franchise tax return or pay taxes due. However, a business is called “involuntarily dissolved” or “involuntarily terminated” if it failed to maintain a registered agent, file a report, or pay a fee to the state.
No matter what it’s called, the business status termination and reinstatement process in Texas goes through two government offices: the Texas Secretary of State and the Texas Comptroller of Public Accounts. The Texas Secretary of State will update your business status after it receives a certification of delinquency or reinstatement from the Texas Comptroller of Public Accounts.
How do I reinstate my business in Texas?
Whether you formed your business in Texas or you formed your business in another state and then registered with the Texas Secretary of State, you must meet all state filing requirements and pay all past due fees and taxes before Texas will reinstate your business.
Follow these steps to reinstate your business in Texas:
Step 1: Figure Out Why Your Business Was Forfeited, Dissolved, or Terminated
First things first, you need to understand why Texas put your business into “forfeited existence,” “involuntarily dissolved,” or “involuntarily terminated” status. Common reasons for this are failure to file annual franchise reports, missed franchise tax payments, or other administrative errors.
If you don’t know what you missed, then you can contact the Texas Comptroller’s office or the Texas Secretary of State’s office to ask. Start with the Comptroller’s office as they should be able to provide you with dates and names of forms that weren’t filed properly.
Step 2: Get Your Paperwork in Order
To kick off the reinstatement process, gather any documentation you’ll need to supply to the state. You’ll likely need your business’ original formation documents, any previous franchise tax filings you submitted, and any paperwork Texas may have sent you about your business status being revoked.
You’ll also want to locate your “filing number.” This is the 10-digit number that was assigned to your business when you registered it with the state. You should be able to find it on any of the correspondence you’ve received from the Secretary of State or the Texas Comptroller’s office.
Step 3: File Overdue Forms and Pay What You Owe
The next step in reinstating your Texas business is to settle your debt. You’ll need to pay any taxes or fees you owe along with penalty and interest. Along with those payments, you’ll need to file any tax paperwork or business reports the state requires. Again, the Texas Comptroller’s office is your point of contact if you’re not sure exactly what paperwork you need to submit.
Step 4: Submit a Request for Your Tax Clearance Letter to the Comptroller’s Office
Once all of your payment and paperwork obligations have been met, you can complete and submit Form 05-391, Tax Clearance Letter Request for Reinstatement. You’ll use this tax clearance letter as your proof to the Texas Secretary of State that you have met all of the requirements needed to have your business reinstated.
Step 5: Make Sure Your Business Name Is Still Available
Once your business is in forfeiture or inactive status, another Texas business may register with that same name. Before applying to reinstate your business, you need to make sure your business name is still available. Otherwise, the process will take even longer to complete.
To see if your business name is still available, you can contact the Texas Secretary of State’s office directly, or you can search for the business name using their online taxable entity search.
Step 6: Submit Your Forms and Fee to the Texas Secretary of State
Once you receive your Tax Clearance Letter, you’re finally ready to ask the Secretary of State to reinstate your business. To do this, you’ll need to submit 3 items:
- Your Tax Clearance Letter from the Comptroller’s Office (Form 05-377)
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Your reinstatement form:
- If you’re requesting reinstatement after forfeiture caused by missing tax payments or not submitting tax forms, you’ll use Form 801.
- If you’re requesting reinstatement after forfeiture because of non-tax reasons, you’ll use Form 811.
- If you’re requesting reinstatement after forfeiture for a Limited Liability Partnership, you’ll use Form 816.
- Your reinstatement fee. In 2024, the fee is $75 for reinstatement after involuntary forfeiture, dissolution, or termination of a for-profit business.
The easiest way to complete this step is to do it all online using SOSDirect and SOSUpload to make your filings, upload your documents, and pay your fee.
However, you can use fax or snail mail to submit your forms and fees. If you have questions about the process or where to send your forms and fees, you can go to the Texas Secretary of State’s website, email them at [email protected], or call 512-463-5555.
Step 7: Wait for Approval
Before starting up your business again, you’ll need to wait for your approval letter from the Texas Secretary of State. It may take several weeks, but you should receive the official letter in the mail. If you don’t – or while you’re waiting – you can also check your business status online using the Texas Comptroller’s tax account status webpage.
Step 8: Get Back to Business!
Once you’ve received your official approval, make sure you update your business records and contact any stakeholders that need to know about your business status. Then, it’s time to kick it back into gear and get back to doing what you do best!
But wait! There is one more thing to think about before moving forward. What business processes did you not have in place before that caused this problem for your business? What business processes or people do you need moving forward to make sure you keep your business in good standing with the state?
If you need an accountant to help keep your tax forms and filings organized and on time, contact an experienced accountant who is well-versed in meeting tax requirements anywhere in the United States. That’s the best way to keep you, your business, and your state happy.
