An organization is deemed to be “active” if it is currently registered with the state and has a business license. To put it another way, it’s a legal entity that satisfies all conditions necessary to conduct business, including getting a company license, submitting yearly reports, paying taxes, and more. An active corporation is one that is capable of making agreements, suing or being sued, and having assets and obligations. What Does the Phrase In Existence Mean?
However, if a corporation is designated as “in existence,” it still qualifies as a legal entity even though it is not currently permitted to carry on business in the state where it was founded. This status typically develops when a corporation misses a deadline for filing annual reports or making tax payments, which can lead to administrative revocation or dissolution by the state. Why Does My Company Display As Inactive?
If your firm is listed as inactive, it no longer has the necessary licenses to operate in the state where it was founded. This may be the result of a number of things, like neglecting to pay taxes, file annual reports, or keep a registered agent on file. You must reinstate your corporation by adhering to state regulations and paying any outstanding fines or fees before you may resume business operations.
No, an LLC and articles of organization are not the same. The legal documents that are submitted to the state to establish a limited liability company (LLC) are referred to as articles of organization. Information on the company’s name, goals, management structure, registered agent, and other details can be found in the articles of establishment. An LLC is a sort of business organization that provides its owners, also referred to as members, with limited liability protection and pass-through taxation. Is a Certificate of Good Standing Required?
A certificate of good standing is a record that attests to your corporation’s legal right to operate in the state where it was founded and that it complies with all state regulations. A certificate of good standing may be required in some circumstances in order to get finance, sign contracts, or renew company permits. It is important to verify with your state’s Secretary of State office because the specifications for obtaining a certificate of good standing differ from state to state.
No, the operational agreement and the articles of incorporation are not the same legal papers. An operating agreement lays forth the guidelines for how the LLC will be handled, whereas the articles of organization constitute an LLC and establish its legal existence. An operational agreement will normally detail the rights and obligations of the members, voting methods, profit sharing, and more. Even though many states do not mandate an operating agreement, it is strongly advised to have one in order to prevent disagreements and keep control of your company.
In conclusion, knowing your corporation’s status is crucial for staying in compliance with state laws and making sure your company has the right to operate. It’s crucial to take action to reestablish your corporation and meet state standards if you discover that it is no longer active, in existence, or has been cancelled or dissolved. You can keep your business operating effectively and avoid potential legal problems by remaining aware and current on these concerns.