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In some situations, a business owner may seek to have their Delaware Registered Agent resign upon the business entity. This course of action is not the same as filing a formal certificate; it will put the company into a forfeit status with the state.
An entity in a forfeit status is considered an inactive company by the state of Delaware. Be aware that the resignation process actually takes a couple of months to complete; it does not occur instantaneously.
These steps must be taken before the Registered Agent is formally resigned from the company:
At this point, the state of Delaware gives the entity another 30 days to rename the former Registered Agent as its current Registered Agent for the entity or to find a new Registered Agent to act on its behalf. Again, if no action is taken, then the entity will become officially forfeit and will lose its good standing status.
During the approximate 60-day waiting period, the entity can potentially still receive notices for payments due, such as the annual Franchise Tax Fee. Until the entity is actually resigned upon and in a forfeit status, the Franchise Tax notices will continue to be generated by the state of Delaware.
People often assume—incorrectly—that if their company is in the resignation phase they will not have to pay that company’s Franchise Tax Fee. The Franchise Tax Fee is automatically imposed on the entity by the state of Delaware at the beginning of each new year.
Regardless of whether the entity has conducted any business, it will generate a Franchise Tax Fee. If the entity is resigned upon and the Franchise Tax Fees are not paid, the assessment stays with the entity. Therefore, if the entity is restored at a later date, the outstanding Franchise Tax Fees must be paid at the time of a renewal filing. However, no new Franchise Tax fees are imposed on an entity that is in a forfeit status.
All possible options and subsequent consequences should be reviewed by the company’s responsible parties to determine the best course of action for the entity.
As mentioned above, this is not the same as cancelling or dissolving your entity. The only way to formally close your company is to file the proper cancellation (for an LLC) or dissolution (for a corporation) documents with the state of Delaware. Just as formation documents are filed with the Secretary of State’s office to create a Delaware company, official documents must also be filed to legally close the company.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
There are 16 comments left for How to Request Resignation of Your Registered AgentAnn cargile said: Tuesday, February 20, 2018
Can you tell me how we go about making our company inactive?HBS Staff replied: Tuesday, February 20, 2018
The answer to that is company specific. If you email your company name to email@example.com, we can provide a price quote.
Joenie Vergara said: Friday, February 9, 2018
Thank you for this guides, now I know how can I help my friend about to his problem which is what he needs to do for his company because he wants to close his company, you giving me and my friend a good Ideas for that problem that's why I'm very thankful for this blog, keep sharing good information and guides.Thanks.HBS Staff replied: Monday, February 12, 2018
We are glad our blog was helpful to you and your friend.MK GLOBAL said: Saturday, January 27, 2018
I registered my company on 2017 in Delaware and I am interested to close it down. please let me know how much it cost me and how long it takes time. Thanks M.KhazaiHBS Staff replied: Tuesday, January 30, 2018
Thank you for your comment. Our filings team will send an email directly to the email on file with the closing options for your company.Chris said: Wednesday, January 24, 2018
Hello, I wish to dissolute my c-corp. How much would it cost if I used your service to formally close my company? Thanks in advance.HBS Staff replied: Wednesday, January 24, 2018
For an accurate quote, we need your company name. Please give us a call at 800 345 2677.sk elmasry said: Sunday, October 30, 2016
If I cancel my LLC, is there any potential harm if I decide to open a new one in the future in Delaware or elsewhere. Also, is there an option to suspend company activities, rather than cancelling it? please advise.HBS Staff replied: Monday, October 31, 2016
Once the entity is cancelled or dissolved, it is no longer in existence and has no bearing on a new company formation. Feel free to call us for more information on canceling an LLC. 1-800-345-2677.