What Business Entity Status Means: Active, Suspended, Dissolved and the Rest

Every state’s business registry shows a status next to each company. The words come from each state’s own law, so they vary. But they describe a handful of situations, and once you know the situations, the words sort themselves out.

Active and good standing

Active, Current (Utah), Good Standing (Delaware): the company exists and, usually, is current on what the registry asks of it.

Read the fine print on “usually”. In some states Active only means “exists”. A company can be Active and still have an overdue report. Maryland shows good standing separately from Active for exactly this reason. New York keeps an entity Active and shows a separate “Past Due” note when its biennial statement is late. North Carolina has a status called “Active/Not Current”.

Good standing is the stronger claim. It means the state would issue a certificate saying the company is current. If a bank or a buyer asks whether a company is in good standing, the status line is a hint and the certificate is the proof. We cover ordering one in the certificate of good standing guide.

Not in good standing

Not in good standing (Illinois, Michigan, Maryland), Delinquent (Illinois, Utah), Ceased Good Standing (Delaware), Past Due (New York’s biennial statement): the company exists but has missed something. It’s almost always the annual report or a tax payment. Sometimes it’s a missing registered agent.

This status is a warning, not an ending. The company fixes it by filing what’s missing and paying any penalty. While it lasts, the company usually can’t get a certificate of good standing, which can hold up a loan, a lease or a sale. In Michigan, LARA won’t accept other filings until it’s cleared. In Illinois, the LLC can’t dissolve or withdraw until it’s back in good standing.

If nobody does anything, this status leads to the next one.

Administratively dissolved

Administratively dissolved (Illinois, North Carolina), Involuntarily Dissolved (Utah), Canceled or Hold (Ohio), Cancelled, Failure to Pay Tax (Delaware LLCs): the state ended the company because it didn’t comply. Nobody at the company signed anything.

Here’s how it usually happens. The company misses a report. The state sends a notice. Nothing happens, and the state dissolves it. In North Carolina you get 60 days from the date on the notice. In Florida, an LLC that still hasn’t filed by the third Friday in September is dissolved on the fourth Friday. In Illinois, it happens once the report is still unfiled 120 days after it became delinquent. Delaware cancels an LLC after three years of unpaid annual tax.

To undo it, the company files for reinstatement: the missed reports, their fees and a reinstatement fee ($100 in North Carolina, for example). How long you have depends on the state. Utah lets a dissolved LLC reinstate at any time if its name is still free. Watch the name, too. In Illinois, a dissolved LLC’s name stays off-limits to others for three years, and Ohio protects a Hold name for one year.

Why this matters when you’re looking a company up: an administratively dissolved company is often still trading, and the owners may not know. If you’re about to sign a contract with one, ask them to reinstate first.

Suspended and forfeited

Suspended (California), Forfeited (Texas, Maryland), Revoked (foreign companies in many states): a heavier penalty, and in some states a tax penalty rather than a registry one.

California is the classic case. The Secretary of State can suspend an LLC for a missing Statement of Information. The Franchise Tax Board can suspend it for unfiled returns or unpaid tax. Either one, or both. A suspended California business can’t legally do business or defend itself in court until it’s fixed, and an FTB suspension has to be cleared with the FTB.

In Texas, “Forfeited” means the Comptroller took away the right to transact business because franchise tax filings weren’t made. It gives at least 45 days’ notice first. A forfeited company can’t sue or defend itself in a Texas court, and its officers and directors can be liable for its debts. In Maryland, a business that stays out of good standing is forfeited and can’t legally operate in the state.

“Revoked” usually applies to a foreign company (one formed in another state) that lost its authority to do business here, often for a missed report or no registered agent. It may be perfectly healthy in its home state.

You fix it through whichever agency imposed it: the tax agency for tax problems, the registry for missed filings. If you deal with California or Texas companies, those two state guides are worth reading.

Dissolved, cancelled, merged, converted

Dissolved, Cancelled (California and Delaware LLCs), Terminated, Withdrawn, Authority Surrendered (New York), Merged, Converted: the company ended on purpose, or turned into something else.

• Dissolved, cancelled, terminated: the owners filed to end it. It no longer exists except to wind up.
• Withdrawn, surrendered: a foreign company left the state. It may still exist at home.
• Merged, converted: the company became part of, or turned into, another entity. The record usually names the survivor, so follow that file number.

A voluntary dissolution is the normal, clean way to close a company. The how to dissolve an LLC guide covers the steps.

How to check if an LLC is active

1. Find the state where the LLC was formed. If you don’t know, start with the state where it operates. If it’s foreign there, the record will say where it’s from.
2. Open that state’s business search. The state index links to every one and explains the quirks.
3. Find the exact record. Watch for similar names and for the entity type: “Harbor Tools LLC” and “Harbor Tools Inc.” are different companies.
4. Read the status and the date next to it. Then look at the last filing listed, which usually tells you why the status is what it is.
5. If you need proof rather than a screenshot, order a certificate of good standing (or status, or existence, depending on the state).

A company that operates in more than one state has a registration and a status in each. Being active at home and revoked somewhere else is common, and it usually just means someone forgot a report.