Summary of What This Blog Covers:
- 💡Understanding Good Standing and Its Importance – Your LLC must comply with Texas tax laws and state regulations to remain in good standing. If your business falls out of compliance, it risks losing liability protection, damaging its reputation, and facing financial penalties.
- 💡Common Reasons LLCs Lose Good Standing – Businesses often fall out of compliance due to missed franchise tax filings, unpaid state taxes, errors in required forms (such as the Public Information Report), or issues with their registered agent. Identifying the cause is the first step toward reinstatement.
- 💡Steps to Restore Your LLC’s Good Standing – The reinstatement process involves filing overdue franchise tax reports, settling unpaid taxes and fees, obtaining a Certificate of Account Status, and submitting a Certificate of Reinstatement to the Texas Secretary of State. Each step must be handled carefully to avoid delays.
- 💡How Insogna CPA Helps Keep You Compliant – As trusted CPAs in Texas, we handle everything from tax filings to ongoing compliance monitoring, ensuring your business remains in good standing year-round. Our expertise in QuickBooks Online, tax filings, and business accounting makes compliance effortless for entrepreneurs.
Running a business is a rollercoaster ride—you’re managing growth, handling financials, and keeping up with compliance, all while trying to actually run your company. The last thing you need is the Texas Comptroller or Secretary of State sending you a notice that your LLC is out of good standing.
But don’t panic. It’s fixable, and you’re not the first entrepreneur to run into this issue. Business owners across Austin, Texas, and beyond have had to deal with franchise tax problems, missed filings, or compliance mishaps. The good news? Getting back in good standing is easier than you think—especially when you have the right CPA firm by your side.
At Insogna CPA, we help business owners reinstate their LLCs quickly and efficiently. Whether it’s tax-related, a simple paperwork fix, or something more complex, we’ll guide you through every step so you can get back to doing what you do best—running your business.
What Does It Mean to Be Out of Good Standing?
When your Texas LLC is in good standing, it means your business has complied with all necessary state regulations, tax requirements, and filing obligations. Think of it like having an up-to-date driver’s license—it proves you’re legally recognized to operate.
But when you fall out of good standing, it’s like driving with an expired license. You may not notice a problem right away, but when you try to do something like sign a contract, apply for a business loan, or file your business taxes, things can get complicated.
Here’s what you risk when your LLC falls out of compliance:
- Legal Consequences – If your business is non-compliant, you might lose liability protections, meaning personal assets could be at risk.
- Reputation Damage – Clients, investors, and banks might hesitate to work with a business that isn’t in good standing.
- Financial Penalties – Missing state tax payments or filings could lead to fines, interest, or even forfeiture of your LLC.
So, if you’ve received a notice that your business is no longer in good standing, it’s time to act fast.
How Do Texas LLCs Fall Out of Good Standing?
There are several reasons why your Texas LLC might have fallen out of compliance. The most common issues include:
1. Missed Franchise Tax Filings
Texas requires businesses to file a franchise tax report annually. If you miss the May 15th deadline, your LLC status could be revoked.
2. Unpaid Taxes or Fees
Failing to pay franchise taxes, penalties, or fees can lead to non-compliance. This includes:
- IRS Form 1040 filings for business owners.
- Capital gains tax if your LLC has investments.
- Self-employment tax for LLC members.
3. Errors on State Filings
Mistakes on the Public Information Report (PIR) or missing required forms like Form 2553 (S Corporation election) can cause delays or automatic forfeiture of your LLC.
4. Registered Agent Issues
Every Texas LLC must have an active registered agent with up-to-date information. If the state can’t contact your agent, your LLC could be flagged as non-compliant.
How to Restore Your LLC’s Good Standing
Fixing your LLC’s good standing status with the Texas Secretary of State is a step-by-step process. Here’s what you need to do:
Step 1: Determine the Cause of Non-Compliance
Before you can fix the issue, you need to understand why your LLC fell out of good standing.
How We Help: Insogna CPA will review your tax records, franchise tax status, and state filings to identify what went wrong.
Step 2: File Outstanding Franchise Tax Reports
If you’ve missed a franchise tax filing, you need to catch up ASAP.
How We Help: We’ll ensure all tax documents—1099 NEC, W9 tax form, and IRS Form 1040—are filed correctly, so you can avoid further penalties.
Step 3: Pay Any Outstanding Taxes and Fees
If unpaid taxes are the issue, you’ll need to settle your balance with the Texas Comptroller.
How We Help: We assist with:
- Franchise tax payments
- Self-employment tax calculations
- 1040 ES (estimated tax payments)
- 1031 exchange filings for real estate investors
Step 4: Obtain a Certificate of Account Status
This document from the Texas Comptroller proves your LLC has cleared all tax obligations.
How We Help: We’ll handle the request and make sure your Certificate of Account Status is filed without errors.
Step 5: File for LLC Reinstatement
To officially restore your LLC’s good standing, you must submit a Certificate of Reinstatement with the Texas Secretary of State.
How We Help: We’ll file your reinstatement, ensuring it’s done correctly and efficiently, so you’re back in business fast.
Why Staying in Good Standing Matters
Once your LLC is reinstated, you’ll want to stay compliant to avoid future issues. Here’s why:
- Protect Your Limited Liability – An LLC shields personal assets from business liabilities—unless your business is non-compliant.
- Maintain Financial Credibility – Banks, investors, and lenders won’t work with an LLC that’s not in good standing.
- Save Money – Late penalties and reinstatement fees cost more than simply staying compliant.
How Insogna CPA Helps You Stay Compliant
At Insogna CPA, we don’t just help fix compliance problems—we help prevent them. Entrepreneurs across Austin, South Austin, and Round Rock, TX, trust us for:
- Proactive Tax Filing – We handle all tax documents, from Form 1065 (partnerships) to Form 1120 (corporations).
- Accounting Support – Need help with QuickBooks Online, FreshBooks, or Wave Accounting? We’ve got you covered.
- Ongoing Compliance Monitoring – We track deadlines for franchise tax reports, 1099 tax forms, and business filings so you never miss one again.
With our CPA-certified accountants, your LLC will always be one step ahead of compliance issues.
Take Action Now: Protect Your Business and Your Future
Your Texas LLC is more than just a legal structure—it’s the foundation of your hard work, your reputation, and your financial future. When your business falls out of good standing, it’s not just a bureaucratic hiccup; it’s a real threat to everything you’ve built. The ability to sign contracts, secure business funding, file taxes correctly (including 1099 tax forms, W2 forms, and IRS Form 1040), and protect your limited liability status all hinges on maintaining compliance. Without it, you’re exposing yourself to unnecessary risks, delays, and costs. But here’s the good news: restoring your LLC’s good standing is entirely within your control, and we can help make the process effortless.
At Insogna CPA, we do more than just help you fix problems—we proactively prevent them. Imagine never having to worry about missing a franchise tax report deadline or dealing with the hassle of unpaid tax penalties. Whether you need assistance with QuickBooks Online, FreshBooks, or other accounting software, our team of certified public accountants (CPA) and business compliance experts will ensure that your financial and legal obligations are met year-round. Our CPA office near you is dedicated to providing hands-on, concierge-level service, so you’ll never feel lost in the process.
We’ve worked with countless business owners in Austin, Round Rock, and across Texas to reinstate their LLCs, file back taxes, and implement systems that keep them in compliance permanently. Whether you’re self-employed and need help calculating self-employment tax or you’re running an S Corporation and need guidance on filing Form 2553, we’re the trusted CPA firm near you to get the job done.
The longer you wait, the more complicated and costly this issue can become. Reinstatement fees increase, penalties add up, and your business credibility is at risk. But with Insogna CPA, you don’t have to navigate this alone. We’ll handle every detail, from requesting your Certificate of Account Status to filing your Certificate of Reinstatement, so you can focus on running your business with confidence.
Let’s get your LLC back in good standing today. Call Insogna CPA now to schedule a consultation, and let’s take the first step toward securing your business’s future. Don’t leave your company’s fate to chance—partner with the best and get peace of mind knowing that your business is protected, compliant, and set up for long-term success.