Secretary of State Forfeiture
If your Texas LLC has been forfeited by the Secretary of State due to unpaid franchise taxes or missing annual reports, you can restore its good standing—and your liability protections—by following a straightforward reinstatement process.
Relevant Tax & State Code References
- Texas Tax Code §171.255 (Forfeiture of Charter or Authority for Non-Payment)
- Texas Tax Code §171.351 (Reinstatement After Forfeiture)
- By analogy to IRC §6651(a)(2), which imposes penalties for failure to pay federal taxes when due, timely payment of state franchise taxes is essential to avoid additional interest and penalties.
Relevant Forms & Filings
- Texas Comptroller Form 05-158 (Franchise Tax Report and Payment)
- Texas Comptroller EFT Enrollment (if required for liabilities over $1 million)
- SOSReinstate (online filing via SOSDirect to request reinstatement)
- Certificate of Reinstatement (auto-generated upon approval by the SOS)
- Detailed Example
Sarah’s “Lone Star Designs, LLC” failed to file its 2023 franchise tax report due April 15, 2024, resulting in a forfeiture notice on July 1, 2024. She owed:
- $800 in franchise tax (no-tax-due report)
- $200 in interest and penalties (per Texas Tax Code §171.255)
Total Due: $1,000
After paying via ACH (no fee) and filing the late report (Form 05-158), she requested reinstatement through SOSDirect. Within two business days, her LLC was restored.
Step-by-Step Guide to Reinstatement
- Confirm Forfeiture Status
- Search your entity on the SOS website (texas.gov/corpsearch) to verify forfeiture date and outstanding obligations.
- Calculate and Pay Outstanding Franchise Tax
- File or correct your Form 05-158 for each delinquent period.
- Pay tax, penalties, and interest (per Tax Code §171.255) via ACH through WebFile.
- Obtain Certificate of Account Status
- From the Comptroller’s office, request an official “Account Status” letter showing zero balance.
- File Reinstatement Request
- Log in to SOSDirect.
- Select “Reinstate Forfeited Entity,” upload the Certificate of Account Status, and pay the $150 SOS reinstatement fee.
- Receive Certificate of Reinstatement
- Upon approval (typically 1–3 business days), download the electronic Certificate of Reinstatement.
- Update Records
- Notify banks, vendors, and licensing authorities of your restored status.
- File any missing annual reports to avoid future forfeiture.
Conclusion
Reviving a forfeited Texas LLC is a time-sensitive but manageable process: clear your tax delinquencies, secure an official status letter, and file for reinstatement with the SOS. Acting promptly minimizes additional penalties and ensures uninterrupted liability protection.
Schedule a Consultation
For tailored assistance reviving your Texas LLC, schedule a meeting with our CPA, Anshul Goyal:
https://calendly.com/anshulcpa/
Disclaimer
This blog provides general guidance on restoring a forfeited Texas LLC and does not substitute for professional advice. Always verify current fees and filing requirements with the Texas Comptroller and Secretary of State. For personalized support with your reinstatement, consult Anshul Goyal, CPA EA FCA—a licensed Certified Public Accountant in the United States and Enrolled Agent before the IRS—who specializes in Texas state tax compliance and entity management.
About Our CPA
Anshul Goyal is a CPA EA FCA with over a decade of experience in state and federal tax compliance. He helps businesses resolve franchise tax issues, navigate SOS filings, and maintain good standing in Texas and beyond.
Top 5 FAQs
1. How long does reinstatement take?
Normally 1–3 business days after SOS fee payment and document submission.
2. What fees are due?
Outstanding franchise tax, interest & penalties (per Tax Code §171.255) plus a $150 SOS reinstatement fee.
3. Can I file reinstatement by mail?
No—SOSDirect online filing is required for reinstatement.
4. What if I miss subsequent annual reports?
Your LLC remains at risk of forfeiture; file all reports on time to avoid repeat defaults.
5. Do I need a new Certificate of Formation?
No—reinstatement restores your existing formation record; no new Certificate is necessary.