How to Get Your Company Back in Good Standing This Summer





When a company fails to meet its legal obligations with the state, it can fall into bad standing. While no one plans for it happen to their business, companies can slip out of good standing, be placed in non-compliant status, administratively dissolved, or even revoked by the state where they formed.

In addition, when a business is in bad standing, the business owner’s limited liability protection is lost, rendering their personal assets vulnerable to meet any debts or other obligations of the business.

No matter how you got yourself into bad standing, it is possible to get back into good standing. And in many cases, it’s not nearly as hard as you’d think. If you have a business in bad standing, read on to learn how to bring it back to good standing this summer. And if you’re not in bad standing, the following can help you understand how to stay compliant in the first place.



Get Back in Good Standing This Summer

When Bad Standing Happens to Good Companies

A corporation or LLC will fall into bad standing when it fails to meet the requirements of the state where it formed or where it has a foreign qualification. For example, a business may fail to file its annual report and pay its annual fees on time (in some cases, you would need to fail to file for several years in a row before going into ‘bad standing’).

Another common culprit is when the Registered Agent resigns from representing the company (which often happens when the company forgets to pay the Registered Agent fees) and the company fails to set up a new agent of record. Additionally, if you fail to file your state franchise taxes, your business can fall out of good standing.

If you’re not sure how your business stands with the state, simply check with your state’s secretary of state office.

Reinstating a Company

The specific steps for reinstatement vary from state to state. Yet the general steps are typically:

1. Determine why your company fell out of compliance (if you don’t already know this, you can check with the secretary of state office).

2. Submit a reinstatement form on behalf of the corporation or LLC to the secretary of state.

3.  Pay any outstanding fees or fines (including overdue state franchise taxes). In some cases, you may need to file some additional documentation…it all depends on why you fell out of compliance in the first place.

When you reinstate your business, your corporation or LLC keeps the original filing date of formation.

Why You Can’t Just Ignore the Problem

If your company fell out of good standing, it may be tempting to just start clean with a brand new business. However, while you may be starting fresh, the state is still keeping tabs on the original business. All unpaid fees, taxes and penalties will continue to accrue each year – even if you’re no longer operating the business.

Ultimately, the state may be able to place a levy on your personal bank account.

For this reason, if your business is out of compliance or in bad standing, you need to take action to get it back in good standing. Reinstating your business means you can regain all the benefits of corporate/LLC status, including limited liability protection to safeguard your personal assets.

Most importantly, you can keep running your business without worrying about an uncertain legal status.

Good Standing Business Photo via Shutterstock

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Nellie Akalp


Nellie Akalp Nellie Akalp is CEO of CorpNet, her second incorporation filing service based on her strong passion to assist small business owners and entrepreneurs in starting their business. Free guides, advice and videos on small business legal topics are available at her Small Biz Corner.

4 Reactions

  1. Hi my name is Jamal Wright. I’m trying to get my S_corporation back in good standing. My business name is Reasons Hair Care Center Ink. I don’t know all the ends and outs but I’m willing to learn and ready to get back to business. Any help will be helpful to me thanks. I have my corporate book but it’s at home at this time but I’m open to get things going.

    • Nellie Akalp

      Hi Jamal,
      The process of bringing a company back into good standing varies depending on the state of registration and the reason it was put into bad standing. My company assists with reinstatements (bringing corporations and LLCs back into good standing). Please feel free to contact Katie Hendrix at my office for a free business consultation: 888-449-2638 x110. I’m confident she’ll be able to steer you in the right direction!

  2. You provided a phone number for your company however do you have a website address as well. Also is there a website where one can learn step by step details on how to get back in good standings.

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