Reinstate LLC in Texas

Sometimes LLCs take a turn for the worst or they fall into bad standing with the state. Some of the most common reasons for dissolvement of an LLC are related to fees, reports, and taxes. It’s not uncommon to write a bounced check or forget to file a form.

While there are two different types of dissolvement for LLCs – voluntary and involuntary – luckily, in Texas, you can reinstate your company at any time. It’s completely possible to reinstate your LLC and get it back in good standing with the state. Here are all of the details you need to know.

What is an LLC?

A limited liability company (LLC) is a business structure in the United States whereby the owners are not personally liable for the company's debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship.

In general terms, an LLC is a process you take when you want to turn your freelancing or small business idea into a legal business entity.

Why Would an LLC Dissolve?

Dissolution generally occurs when the business purpose of the LLC is completed or ceases to be economically viable. The members may also agree to dissolve the LLC if they are at an impasse regarding fundamental decisions concerning the LLC's business operations.

There are two types of dissolvement: voluntarily and involuntarily.

It’s considered voluntary if all the members decide to end the LLC. It’s involuntary if a court orders a business to dissolve over some (or all) its members' objections.

An example of voluntary dissolvement is having stated in the Operating Agreement that the LLC will dissolve once a specific purpose or goal is met. An example of an involuntary dissolvement is forgetting to file a document or pay a mandatory fee or tax.

There are several reasons for both types of dissolvement, including:

  • Not paying taxes forced to shut down
  • Not making enough money
  • Planned expiration (the purpose of the business is over)
  • Going out of business
  • Vote for dissolvement
  • Failure to maintain a registered agent

Depending on your unique situation there are a number of reasons that may lead to dissolving an LLC.

How to Reinstate an LLC

Reinstating a dissolved LLC varies based on state laws and whether you dissolved voluntarily or involuntarily. It also depends on whether the business regulation agency has processed the articles of dissolution.

In Texas, a business owner can file a reinstatement up to 3 years after the termination of a business registration. You cannot change the registered agent at the same time on the reinstatement unless you were terminated by the state for failure to maintain a registered agent.

If you want to reinstate your LLC in Texas, you have to obtain a Texas tax clearance letter. Once you have that, here are the steps you need to take:

  • Apply for articles of reinstatement
  • Update company information
  • Submit an application
  • And make a payment

How do you begin filing for reinstatement?

First, determine the paperwork you’ll need to fill out and submit. If you’re not sure which forms are necessary for your specific situation, contact the Texas Secretary of State to find out. This information does vary from state to state, and Texas does provide an application for reinstatement.

How Much does it cost to Reinstate your LLC in Texas?

The filing fee for the Articles of Reinstatement is $100. It can only be filed online (cannot be filed by mail) and you'll need to pay the $100 filing fee with a debit or credit card.

The normal processing is 3 to 5 working day and 4 to 6 weeks to receive tax clearance so that you can file your request.

It’s advisable not to file a reinstatement without a business lawyer on your side. You want this to be prepared, submitted, and filed properly from the very beginning.

A business lawyer can help complete the reinstatement paperwork, figure out which fees are owed by your business, and then submit the paperwork to the state. You’ll then be notified when your LLC is restored to active status and good standing. This gives you peace of mind in knowing your reinstated LLC in full compliance — and ready to get back to business!