Corporations, limited liability companies, and certain types of partnerships, formed in the state of Washington, are required to file annual reports and pay an annual license renewal fee to the Washington Secretary of State (the “Secretary”). Each year, the Secretary sends notice to the entity that its annual report and fees are due by a certain date. The Secretary has the authority to administratively dissolve an entity if one of the following events occurs: (1) the entity does not pay any fee, interest, or penalty required to be paid to the Secretary when due; (2) the entity does not deliver its annual report to the Secretary within 120 days after it is due; (3) the entity does not have a registered agent in the state of Washington for 30 consecutive days; or (4) the entity’s period of duration in its public organic record (the record filed with the Secretary to create the entity or to amend or restate the original record) has expired.
The Secretary is required to provide the entity with notice that it will be administratively dissolved and the reason for the dissolution. If, within 60 days after service of that notice, the entity does not cure the deficiency or demonstrate to the Secretary’s satisfaction the non-existence of each ground for dissolution determined by the Secretary, the Secretary is required to administratively dissolve the entity. Administrative dissolution, like voluntary dissolution of the entity or judicial dissolution under appropriate facts, can have significant adverse impacts on the dissolved entity because, although the entity continues its existence, it is not permitted to engage in any activities after dissolution except those necessary to wind up the activities or business affairs of the entity, or to apply for reinstatement. Those who purport to act on behalf of the dissolved entity could also face significant adverse impacts if they cause the entity to engage in activities not related to winding up the activities and business affairs of the entity or to apply for reinstatement.
An administratively dissolved Washington entity may apply to the Secretary for reinstatement as an active entity within 5 years of its administrative dissolution. This requires filing an application with certain required information and payment in full of all annual license or renewal fees that would have been assessed during the period of administrative dissolution if the entity had been in active status, plus a penalty fee determined by the Secretary. Filing the application and payment of all amounts due does not automatically result in reinstatement of the entity. The Secretary reviews the application to determine whether all required information is included and whether it is correct. If the review is satisfactory and the Secretary determines that all required payments have been made, the Secretary issues a statement of reinstatement which is filed in the Secretary’s public records and a copy is sent to the entity. When the reinstatement is effective, it relates back to and takes effect as of the date of the administrative dissolution. The entity can resume its activities as if the administrative dissolution had never occurred, except for the rights of any person arising out of an act or omission in reliance on the dissolution before that person knew or had reason to know that the entity had been reinstated.
If you need assistance, contact Per Oscarsson or one of the other attorneys in Beresford Booth’s Business and Real Estate Group at info@beresfordlaw.com or by phone at (425) 776-4100.