When a US company misses a filing: good standing, dissolution and reinstatement

Nothing dramatic happens on the day a filing is missed, and that's the problem. The consequences arrive months later, in the order below, and each one costs more than the last. Here's what states and the IRS actually do, so the first reminder gets the attention it deserves.

1. 1

   The due date passes

   Wyoming marks the company delinquent from the second day of the next month and allows 60 days before it can start dissolving it. Delaware adds a $200 penalty to an unpaid LLC tax and charges 1.5% interest a month. Many other states charge a late fee straight away: Florida adds $400 to an LLC report filed after 1 May, and its state says it doesn't waive the fee because a reminder didn't arrive.

2. 2

   Good standing is lost

   The state stops issuing certificates of good standing, so a bank, investor, marketplace or registry that asks for one will find out. In some states, a company that's behind can't bring a lawsuit in the state's courts until it catches up.

3. 3

   Notice goes to the registered agent

   The state writes to the company's registered agent. If the agent service has lapsed too, nobody receives the notice, which is why keeping the agent paid matters.

4. 4

   The state dissolves or cancels the company

   Wyoming dissolves a company that hasn't put things right within 60 days of its notice. Delaware cancels an LLC after three years without paying its tax. Other states' timelines range from a few months to a few years. The company stops existing under state law, its name can become available to others, and the owners may lose their liability protection for that period.

5. 5

   Reinstatement, or starting again

   Most states allow reinstatement for a while, two years in Wyoming, if you file everything missed and pay the missed fees plus a reinstatement fee. After that, the company is gone and a new one has to be formed, with a new file number, a new formation date and usually a new EIN.

A missed Form 5472 works differently: there's no grace period and no warning. The penalty is $25,000 for each form not filed on time, generally assessed automatically when a late form arrives or when the IRS notices it's missing. If the failure continues more than 90 days after the IRS gives notice, another $25,000 is added for every 30 days. The IRS removes the penalty only for reasonable cause, and it reads that narrowly. A late Form 1120 from a corporation carries a percentage penalty on any unpaid tax, with a minimum once it's more than 60 days late, and a late Form 1065 carries a penalty for each partner for each month it's late.

• File now. Each day adds interest, and for Form 5472 the continuing penalty can add another $25,000.
• Deal with the state first, because good standing unlocks everything else, and reinstatement usually needs the missed reports and fees together.
• Check the registered agent is still in place. A lapsed agent usually has to be replaced before a state will reinstate the company.
• For Form 5472, file the late return with a reasonable cause statement if you have grounds for one, and expect a penalty notice. An accountant who has handled penalty relief is worth the fee.
• Email us. If you move the company to us, we check the state's record the day you order and tell you what it takes to put right, and what the state charges, before we change anything.

Every plan puts the state's date and the federal date on a calendar, with a reminder a month ahead. With annual state compliance, at $149 a year, we file the state's report or pay its tax for you and pass the fee on at cost. Next to a reinstatement, that's cheap. The federal forms stay with you or your accountant, and a call with a US tax specialist is $149 if you want help with them.