So, you just received a notice from the Secretary of State telling you that your company was “administratively dissolved.” How did that happen, and what should you do about it?

Like most states, business entities (corporations and limited liability companies chief among them) in Washington are authorized to do business from year-to-year. That means that, on an annual basis, those in charge of the company must file a very simple “annual report” and pay a relatively inexpensive renewal fee. If a company fails to do that within the time required, the Secretary of State will note the entity as have been “administratively dissolved.”

It is, nevertheless, relatively easy to reinstate an entity that was administratively dissolved. You simply pay the back fee, plus a penalty, and voila, the company returns to “good standing.” For this reason, administrative dissolution is not the end of the world.

But still, you should avoid it just the same, for at least two reasons:

First, owners of a company that fail to respect corporate formalities may lose the benefit of their “limited liability” protection through a doctrine known as “piercing the corporate veil.” A company that routinely fails to file an annual report is one that obviously ignores corporate formalities, and therefore jeopardizes those who own it.

Second, a company cannot be revived under any circumstance once five years lapse after having been administratively dissolved. When that happens, even without piercing the corporate veil, those who incurred liabilities in the name of the dissolved company risk being held personally responsible for the company’s debts. In effect, an administratively dissolved company that continues to do business and that is never formally revived is functionally the same as a sole proprietorship or a partnership.

Bottom line: return your annual report when its due. And when you’re late, quickly reinstate.

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  • Jessica Rodriguez

    Owners should always watch for their company. If that company has not completed its projects and their reports, this might cause them to say goodbye to their company. They should always return their annual report. 🙂 Corporate lawyer philippines

    • Dona Girouard Omanoff

      I know but my question is since I don’t have a big company and there is not much impact besides changing EISN numbers on some reports I might as well close one company and open a new one with Florida’s guidelines, it’s less money for me. I will not make the same mistake twice of forgetting to file.

  • The Good Life is free!! and will keep you up-to-date on all fillings and fees due for your business

  • Dona Girouard Omanoff

    My LLC is not making any money and I am the only managing member. I missed filing by mistake and think I should dissolve the company and make a new LLC which costs $200 instead of having to pay $550. I intend to make money it just haven’t happened yet. I want to make my new LLC the Doing Business Name which is more recognized anyway. Can I attach my old Doing Business As name to my new LLC?

    • No one answered this question. I’m trying to find out the same thing. It was all a learning experience. Now I want to do things right.

  • Christy

    So I did receive this notice. I have a small office and work by myself as a Esthetician. Does this mean I am not allowed to practice now until I get this resolved. Anyone know?

  • Julianne McLeod Hudson

    in 2007 I divorced and the LLC became mine. I had one rental property that I currently want to sell but cannot because my LLC has been administratively dissolved. I thought I had gone through the proper steps in 2007 to dissolve it, obviously not. I have paid all taxes and insurance on this property every year, but cannot get out of this LLC! suggestions??