Business Inactivity and Legal Status
An inactive business is a business that still exists but has no activity, meaning no business transactions during a specific year.
Consequences of Business Inactivity
If a company does not remain in good standing while it is inactive, the state may dissolve it and impose penalties.
Reopening a Dissolved LLC
Can you reopen a dissolved LLC? An inactive business is a business that still exists but has no activity, which means no business transactions during a specific year.
State Law Compliance for LLC Members
If the operating agreement says nothing about how to leave an LLC, a member who wants to go must adhere to the state law under which the LLC was incorporated.
LLC Inactivity and Naming
Names with an “INACTIVE” or “INACT” status are available. Names with an “ACTIVE”, “ACT”, or “INACTIVE/UA” status are not available for use.
LLC Characteristics and Functionality
An LLC, or Limited Liability Company, is a business structure that makes it easy for individuals to start their businesses because of its affordability, uncomplicated maintenance, and versatile tax options.
Dissolution and Legal Implications
If a contract with a dissolved company exists, the contract will stay legally valid. Dissolving a company will not terminate any lease the company has, including those for a real estate property, company vehicles, or other creditors.
Inactive Dissolution
Inactive dissolution refers to dissolving a business that is inactive.
Reporting and Operational Aspects
Even when a business is inactive, it is still subject to certain reporting requirements.
Importance of Non-Dissolution
An LLC must file Form 1065 and send each member a Schedule K-1.
Consequences of Inactivity
Inactive status means dissolved voluntarily.
Legal Aspects of Dissolution
In law, dissolution terminates a legal entity.
LLC Name Usage and Regulations
An inactive business exists but has no activity or transactions.
Administrative Dissolution Impact
If administrative dissolution occurs, it cannot legally transact business.
Dissolution Process Duration
How long does it take to dissolve an LLC in Delaware? It takes two to three weeks to dissolve your LLC.