If your business entity has been forfeited for franchise tax non-compliance, reinstatement is usually possible. The process requires addressing the compliance failures that led to forfeiture and completing administrative procedures with both the Comptroller and Secretary of State.
Start by determining why forfeiture occurred. Request a status letter from the Comptroller identifying outstanding reports, taxes owed, penalties, and interest. This letter provides a comprehensive picture of what’s needed to clear your account and become eligible for reinstatement.
File all delinquent franchise tax reports. Every missing report must be submitted, even for periods when no tax was due. The Comptroller won’t clear your account for reinstatement until all filing requirements are satisfied.
Pay all outstanding taxes, penalties, and interest. The total amount includes not just the original tax but also late filing penalties, late payment penalties, and interest that has accumulated since the original due dates. The Comptroller can provide a payoff amount reflecting everything owed through a specific date.
Obtain a certificate of account status from the Comptroller. This certificate confirms that your franchise tax account is in good standing and that the Comptroller has no objection to reinstatement. Without this certificate, the Secretary of State cannot process your reinstatement.
File reinstatement documents with the Secretary of State. The required forms depend on your entity type and whether you’re a Texas-formed entity or a foreign entity registered in Texas. Filing fees apply, and the Secretary of State reviews submissions before processing.
Reinstatement is typically retroactive if completed within three years of forfeiture. This means the entity is treated as if it had existed continuously, which helps resolve questions about contracts signed or actions taken during the forfeiture period. After three years, reinstatement may still be possible but involves additional procedures.
The reinstatement process can be completed in weeks if you act promptly and provide complete information. Delays usually result from incomplete filings or outstanding issues that weren’t identified initially.
If you need to reinstate a forfeited Texas entity, schedule a consultation to guide you through the process.
