Do you have a limited liability company or corporation that you are no longer using? If so, perhaps you chose not to renew it when the annual renewal came around. Does the entity still hold assets? If so, the consequences could be significant.
Business entities registered in the state of Nevada must be renewed annually by filing the proper form and paying the correct fees to the Nevada Secretary of State’s office. If you miss the due date, your entity will be in default. If the business remains in default for a year, the State will revoke the entity’s charter. Once revoked, if the entity is not reinstated within 5 years, it will be permanently revoked. As explained here, once it is permanently revoked, the entity may still be revived.
The question becomes whether it is worth reinstating or reviving the revoked LLC or corporation. That depends. Technically, a revoked entity loses “the right to transact business” under Nevada statute. This may not be a problem it nothing is held in the company.
However, if the LLC, for example, still owns a piece of real property and you wish to sell that property, there could be a problem. Executing and recording the deed to transfer the property is arguably transacting business, which the company technically would not have the right to do.
The issue may arise with the title company who may refuse to insure title to the property since the revoked company’s officer did not have authority to “transact business” and transfer the property. In this situation, you may be stuck with reinstating or reviving the business entity in order to get the title insurance company to insure title.
Depending upon how long the company has been revoked, the past fees and penalties could add up to several thousand dollars. If you want to know how much is owed to reinstate your entity, click here. If your entity has been permanently revoked, you may need to call the Secretary of State to find out how much is owed.
Rather than simply abandoning the entity, you may wish to formally dissolve the entity. This requires filing Articles of Dissolution and paying a small fee, but you then have the right to wind down and distribute the company’s assets pursuant to the plan of dissolution that is adopted. And avoid potential problems later.
