Furthermore, the delinquent status of the corporation or LLC will be listed on the state’s public records. By withdrawing, the corporation or LLC will be removed from the state’s records and will no longer be subject to the compliance requirements of the state’s corporation or LLC statute.
Check out this compliance chart to learn more about what documents need to be filed to officially withdraw from a state.
Frequently asked questions for certificate of withdrawal
What is a certificate of withdrawal?
A foreign business entity may file for a certificate of withdrawal when it has ceased to transact business or conduct affairs in the state. A certificate of withdrawal is an official state document certifying that the foreign business entity (such as a foreign LLC or corporation) has voluntarily terminated its status as a registered foreign business entity in that state. The entity still exists to do business in its domestic state and any remaining states in which it has foreign qualified.
A certificate of withdrawal may go by different names depending on the state and entity type. For example, a foreign corporation in California would file for a Certificate of Surrender, while a foreign LLC in California would file for a Certificate of Cancellation. In Texas, a Certificate of Withdrawal of Registration is the document that is to be filed by both a foreign corporation and a foreign LLC.
If the entity has formally ceased to exist through a dissolution or merger, it may instead need to file for a certificate of termination or similar document.
Some states may require tax clearance from the state tax department prior as a prerequisite for filing for a withdrawal.
For more information, see What is corporate dissolution vs. withdrawal?
What is a tax clearance?
Tax clearance is proof that a business entity does not owe any taxes or reports in that state. Some states require a tax clearance letter or similar document from the state’s tax department to be included with the filing for a certificate of withdrawal.
Why is it important to obtain a certificate of withdrawal?
Without a properly executed filing for withdrawal, an entity may continue to appear as “active” on the state’s records. If an entity is registered to do business in a state, it is subject to that state’s annual report, franchise tax, and other compliance obligations. The state may impose fines and penalties on a business entity for failure to maintain these requirements. In some states, this liability may be extended to officers or employees who were responsible for tax payments and returns and wilfully failed to file and/or pay those to the state.
For more information, see What should a company do when it stops doing business in a foreign state.
Learn more
If you’ve stopped doing business in a state, CT Corporation can help you dissolve or withdraw your corporation or LLC properly and in compliance with state laws and local jurisdiction requirements. We provide business entity dissolution and withdrawal services for all 50 states and the District of Columbia. Contact CT Corporation today.
