Reinstate a Delaware Corporation

Reasons a Delaware Corporation Might Be Inactive

Most companies become inactive because they fail to pay taxes or file an annual report. But a company will also be considered inactive if it hasn’t had a registered agent for 30 days or more. The Delaware Division of Corporations will report an inactive status in one of the following ways:

• “Ceased Good Standing.” This simply refers to business entities that didn’t pay their taxes on time. (Taxes are due by March 1 each year.)
• “AR filed, Tax delinquent.” This means an Annual Report has been filed, but the corporation did not pay required taxes.
• “AR delinquent, Tax due.” This means the corporation BOTH failed to file an Annual Report and failed to pay required taxes.
• “Void.” Corporations that haven’t paid taxes for one year, or Foreign Corporations that haven’t filed an Annual Report for two years are considered “void,” which means the company is considered inactive and the state stops accruing late fees.
• “Forfeited.” A corporation is considered “forfeited” when it no longer has a registered agent on file. If you cancel your registered agent or your registered agent resigns, you have 30 days to appoint a new one, otherwise you will lose good standing.
• “Dissolved Corporation.” This indicates voluntary dissolution, which means the business owner filed paperwork to deactivate the corporation.
• “Surrendered.” Similar to a dissolved corporation, this is a type of voluntary dissolution. However, “surrendered” corporations are shut down early on, before shares are distributed.
• “Withdrawal.” The term “withdrawal” is used for Foreign Corporations that are inactive in Delaware.

Regardless of whether your corporation was voluntarily or involuntarily made inactive, if your business is tied to any of the statuses above, it means you’ve lost Good Standing in Delaware.

What Happens When A Delaware Corporation is Inactive

If a Delaware business loses Good Standing, it cannot legally operate in Delaware. (Generally, “Good Standing” means a business has been legally formed with the DE Secretary of State and is caught up on payments and paperwork.) Sometimes companies aren’t aware they’ve lost their Good Standing status and continue to operate as usual, but they face consequences:

• Legal Status Revoked. Not only does this mean a corporation isn’t operating within the bounds of the law, but taking certain actions are impossible for businesses that aren’t in Good Standing with their state. For instance, you won’t be able to foreign register in another state, and you won’t be able to expand your business within Delaware (getting a DBA name, for example) without first reviving your corporation.
• Penalties and Fees. Corporations that don’t file state taxes by March 1 each year not only lose Good Standing, they’re automatically charged $200, plus 1.5% interest per month on the combined amount of tax and penalty owed.
• Loss of Limited Liability Status. Corporations, like LLCs, benefit from the legal separation of personal and business assets. However, when a corporation loses Good Standing it technically loses its limited liability status, too, which means that business owners become personally responsible for the debts and liabilities of their corporation.

D.I.Y. Guide: How to Revive a Delaware Corporation

In most cases, a Delaware Corporation can be revived in two steps:

1. Paying Debt. If your corporation became inactive because of unpaid taxes or fees, you’ll need to take care of these payments before you can get your business back in Good Standing.
2. Submitting Paperwork. After your debt is paid, you’ll then submit a Certificate of Revival of Charter to the Delaware Division of Corporations. Note that there are two different forms to choose from:

• Certificate of Revival of Charter for a Voided Corporation: Use this form if your corporation was dissolved or deemed inactive because of unpaid taxes or fees.
• Certificate of Revival of Charter for a Forfeited Corporation: Use this form if your corporation was deemed inactive because it didn’t have a registered agent on file.

In either case, your Certificate of Revival must include:

• Name of Corporation (and the original name you registered with, if different)
• Name and address of your Registered Agent
• Date you originally filed your Corporation’s Certificate of Incorporation in Delaware
• Date your Corporation was dissolved or deemed inactive in Delaware
• Signature of an authorized person

FAQs:

How much does it cost to revive a Delaware Corporation?

The state charges a $189 fee to file a Certificate of Revival, plus $9 per extra page. However, you’ll also be responsible for any back taxes and/or unpaid fees owed to the state.

For peace of mind, you can hire us for $100 + state fees and we’ll take care of this filing for you.

How do I submit a Certificate of Revival in Delaware?

Certificates of Revival can be submitted to the Delaware Division of Corporations by mail, in person, or online.*

By Mail or In Person:
Delaware Division of Corporations
401 Federal Street – Suite 4
Dover, DE 19901

Online: DCC Document Filing

Filing online is only available during the following times:

• Monday – Thursday: 7:45 a.m. – 11:59 p.m. (EST)
• Friday: 7:45 a.m. – 10:30 p.m. (EST)
• Closed on weekends and holidays.

* Note that online filings use a document upload system, which still require you to fill out a paper form.