ADMINISTRATIVE DISSOLUTION OF A NORTH CAROLINA CORPORATION
Ever wondered what it means when you see that a corporate entity has been “admin. dissol” according to the Secretary of State’s website? In general, it means that the officers and directors of the corporation, or sometimes the organizers if they never got to the most fundamental of corporate formalities, failed to perform the obligations necessary to maintain status as a corporate entity in North Carolina.
Probably the most common error is failure to file an annual report with the Secretary of State’s office. All too often, individuals understand that there are protections which arise by creation of a corporate entity so they download the requisite forms, pay the fee and create a LLC or corporation. These individuals often fail to understand that with the incorporation comes a series of continuing duties. The corporation must file an annual report which serves to keep the records of the Secretary of State up to date as to the officers and registered agent of the corporate entity. If there is a change in the registered agent – the person designated as the point of contact between the corporation and the world, that information must be quickly conveyed to the Secretary of State.
The Secretary of State will notify a corporation if it is not in compliance and provide an opportunity to fix the problem. Even after an administrative dissolution, a corporate entity has up to five years to file its past due reports and thereby regain its status as if it had never been lost. Translation: if legal action is brought after administrative dissolution, the officers and directors can regain the corporate protections by filing the missing annual reports and otherwise bringing the corporate entity into compliance with the statutory requirements. This is not the case if the corporate entity loses its status by virtue of being revenue suspended. During any period of revenue suspension, the corporate officers incur personal liability for any debts incurred or actions taken in the corporate name.