Avoid Being Administratively Dissolved: The Business Forum Show, April 23, 2014

Here’s a conversation I’ve had with clients more than a few times:

Client:  “I can’t find my company on the Secretary of State website.”

Me:  “Check under ‘Inactive’”

Client:  “OK, I found it.  Why is my company listed as ‘Inactive’?”

Welcome to administrative dissolution in Minnesota, the topic du jour on the April 23, 2014 edition of The Business Forum Show.

Whether your entity be a corporation or a limited liability company, Minnesota law requires that each entity file an annual renewal.  The renewal form is basic – simply verifying that the information on file with the Secretary of State is current – and can now be handled online.

Under both the Minnesota Business Corporations Act (at Minnesota Statues Section 302A.821) and the Minnesota Limited Liability Company Act (at Minnesota Statutes Section 322B.960), an entity which fails to file its annual renewal is “administratively dissolved” by the Secretary of State.  However, by paying a $25 fee and filing a late annual renewal, the business entity can reinstate its existence retroactively to the date of administrative dissolution.  Hence, once the renewal is filed and the fee is paid, owners of the entity have limited liability retroactive back to the dissolution date as if the dissolution had not occurred.

The Minnesota Secretary of State’s office over the last few years has modernized and upgraded its filing system to streamline filings.  For current filings, an email address is required for the entity’s contact person, and the Secretary of State then emails the reminder about the annual renewal filing requirement.  Paper reminders are no longer sent out to business entities relative to the annual renewal filing.

For older business entities that have not submitted an email address to the Secretary of State, it is very likely that they will face administrative dissolution should they fail to file their annual renewal.  They thus risk personal liability for liabilities incurred relative to the entity unless they file for reinstatement.

For longstanding business entities, be sure to check your filing status with the Minnesota Secretary of State.  If you are yet current, it would not hurt to file a renewal and thereby provide the State with an email address through which it can contact you to remind you of future renewal filing deadlines.  If you are inactive, get your reinstatement filed (which will include your email) and pay the fee.

Archived segments are available by visiting The Business Forum Show page of my website, and be sure to tune in live (or listen to a podcast recording of the show) here.