In the business world, entities like non-profits, corporations, and limited liability companies (LLCs) must maintain compliance with State regulations in order to remain active and in good standing with the State in which they are formed or authorized to do business. In North Dakota, as with many other states, entities (whether formed in North Dakota, or one from another state that was authorized to conduct business in North Dakota) that fail to meet their annual filing requirements or pay their taxes may face administrative dissolution. This article will delve into the process of entity reinstatement in North Dakota, and what to do if your entity has been involuntarily dissolved by the state as a result of administrative non-compliance.
Understanding Administrative (Involuntary) Dissolution
Administrative dissolution is a legal process by which the State revokes the legal existence of a business entity that has failed to meet its statutory obligations. In North Dakota, this can happen for various reasons, including the failure to file annual reports, pay taxes, or maintain a registered agent. Once a business entity is administratively dissolved, it loses its legal standing and may face adverse consequences, such as losing the right to conduct business and facing personal liability for business debts. Before proceeding with reinstatement, assess whether your business entity is eligible. In North Dakota, most business entities can be reinstated if they were administratively dissolved. However, if the entity was dissolved voluntarily or by court order, reinstatement may not be an option. Ensure that your entity’s dissolution was due to administrative reasons.
Involuntary Dissolution Or Revocation (Within 1 Year)
Keep in mind that every entity has differences, but the general scheme applies to most entities formed or doing business in North Dakota. If your entity received a notice of involuntary dissolution or revocation of its authority to operate, there is a one-year period in which reinstatement is quite simple. Within the one-year time frame, you can submit the past due annual report (and annual report fee) along with a reinstatement request with the Secretary of State with the reinstatement fee to reinstate the entity. North Dakota is one of the few states that do not have a reinstatement form. A dissolved entity will have to submit the documents and payment to the Secretary of State by mail, by fax, or in person.
Involuntary Dissolution Or Revocation (After 1 Year)
After a year has passed from the dissolution or revocation, the above option is no longer available. The process of reinstatement at this point involves the court. Basically, after a year has passed from the dissolution, an involuntarily dissolved entity (along with one of the entity’s authorized agents) needs to petition the Secretary of State for reinstatement and then get court approval for the reinstatement.
The process is similar to a lawsuit. The Secretary of State will need to be legally served with the petition for reinstatement. Several other documents need to accompany this as well (including the entity’s formation documents, the dissolution notice, and a proposed order for granting reinstatement that a judge will sign). If the Secretary of State consents to the reinstatement and accepts service of the documents, said documents need to be filed with the court. After the documents are filed with the court, a judge will consider them and (if everything is in order) sign the proposed order granting reinstatement of the entity.
After the proposed order for granting reinstatement is approved and signed by the judge, it becomes an official order granting the reinstatement of the entity. After the order is issued, the entity has 30 days to submit a few more required documents and fees to the Secretary of State. This often includes 1) the entity’s most recent annual report, 2) all missed annual report fees, 3) a reinstatement fee, and 4) an updated registered agent form for the entity. Once the Secretary of State receives the aforementioned items, the reinstatement of the entity will be processed and returned to an active good standing with the State of North Dakota. Keep in mind that continued compliance is required to avoid your entity being subject to future involuntary dissolution and non-compliance.
Our business team at SW&L Attorneys can assist you with your reinstatement and other legal business questions you may have. To contact us, call 701.297.2890 or email at firstname.lastname@example.org
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