Administrative Dissolution
The Annual Report ensures transparency and provides the public with the ability to contact and learn more about the entities with which they do business.
What if I didn’t profit from my business this year? Do I still need to turn in an annual report?
Yes. The annual report is due regardless of the activity level or profit level of the corporation. Remember, the annual report is not a financial statement. It is a separate report that all business corporations are required to file. Filing a tax return with the North Carolina Department of Revenue does not satisfy this requirement.
Consequences of Administrative Dissolution
The consequences of administrative dissolution for a business in North Carolina can be significant. Here are some key points to consider:
Loss of Corporate Benefits: An administratively dissolved company may lose the benefits of being incorporated, such as limited liability protection for its owners.
Name Availability: If the company is administratively dissolved, it may lose the right to use its business name.
Legal Standing: The dissolved entity may not be able to sue or be sued in the state's courts as a recognized business entity.
Reinstatement Process: To cure administrative dissolution, a company must apply for reinstatement and correct all statutory requirements that led to the dissolution.
Filing Fees: There are fees associated with the reinstatement process, including a $100 application fee and additional fees for any overdue annual reports.
Note: It's important to consult with an attorney to understand the full implications of administrative dissolution for your specific business. Acting promptly to address the issues can help mitigate these consequences.
(Source: North Carolina Secretary of State Frequently Asked Questions).