What is an Administrative Dissolution?
Has your business gone through administrative dissolution recently? Doing business in the State of North Carolina is a privilege granted by the NC Secretary of State when you applied for your Articles of Incorporation. Most business owners are aware of the "LLC" type of entity and the benefits it provides to a business and its partners/shareholders.
One of the biggest benefits that an LLC provides to a business is the liability protection. A LLC protects partners/shareholders from creditors coming after them personally for actions taken by the business entity. This is also known as "Piercing the Corporate Veil". If the business defaults on debt, is sued or anything else; the partners/shareholders personal assets (homes, vehicles, investments, etc) are protected.
The one caveat to have an LLC in the state of North Carolina is that the business has to file annual reports and pay a fee each year to maintain the LLC. Otherwise the Secretary of State will file an "Administrative Dissolution" for your business and all the benefits in having an LLC will go away.
What happens when my company has been administratively dissolved?
All of the advantages of an LLC disappear. No more liability protection for the partners/shareholders. Thus all of their personal assets would be fair game to creditors, individuals suing the business and anything else the business would have been responsible for.
After 5 years of having gone through administrative dissolution, the business can lose the right to use the business name. After 5 years the business name goes back on the open market for anyone to use. This would pose huge problems as your business name could/will be forced to change your name. Imagine having to reapply for everything; licenses, taxes, bank accounts, advertising, etc - all because annual reports were not filed each year.
CHW Bookeeping, LLC offers a couple of different services to help the small businesses in North Carolina either reinstate your LLC or help maintain the LLC.
Don't let all of your hard work in building a business go to waste by not maintaining your LLC with the Secretary of State.
Please give us a call or send us an email for more information