Renewing a Canceled Delaware LLC
Sometimes, even after formally closing their Delaware Limited Liability Company with the Delaware Division of Corporations, a former business owner might end up needing to reactivate their company to conduct business.
During the formal closing process for an LLC with the Delaware Division of Corporations, a Certificate of Cancellation is filed and any Delaware Franchise Tax already imposed on the LLC is paid at the time of cancellation. Clients will then receive an approved Certificate of Cancellation for their records once approved by the Delaware Secretary of State. The document essentially serves as the death certificate for the LLC in Delaware.
However, after completing the formal cancellation process for the Delaware LLC, it may be determined that the company was formally closed in error. Maybe the LLC needs to become active again due to banking needs. For example, clients might receive a check after closing the company that needs to be deposited into an account that has the LLC name. Or, maybe, a client might not realize that they have an asset tied to the company name that was never transferred from the LLC prior to its formal cancellation in Delaware. These are just some of the reasons why a client might need their LLC to be active again within the Delaware Division of Corporations records.
If a client did formally close their Delaware LLC, there’s a filing that can be made with the Delaware Division of Corporations to make the LLC active once again called a Certificate of Correction. It’s important to note that the Correction document will need to list the reason why the formal correction is being filed. For example, if filing the Certificate of Correction after formally closing the LLC, clients sometimes might list that the company was formally closed due to an administrative error or clerical oversight.
In addition to the Correction filing, the Delaware Division of Corporations will require the LLC to pay the Delaware Franchise Tax for the years the company was not active up until the year of renewal. For example, if the LLC was formally cancelled in Delaware in 2022 and if the Correction is being filed in January 2025, the LLC will need to pay the 2023 and 2024 Delaware Franchise Tax at the time the Correction is being filed.
In contrast, if your LLC became forfeit within the Delaware Division of Corporations records and was not formally closed, a Certificate of Revival can be filed with the Delaware Secretary of State for approval to formally revive the LLC in Delaware. In addition to the revival filing, the Delaware Division of Corporations will also require that any Delaware Franchise Tax that remained with the LLC at the time of inactivity be paid at the time of the formal revival filing.
With either process, the company name will need to be checked in Delaware to see if the name is still available to be used.
If you have any questions about reviving a Delaware LLC, feel free to contact us at 1-302-645-7400 or 1-800-345-2677 ext. 6911 or via email at filings@delawareinc.com. We can also be reached via Skype at delawareinc.
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