Posts Tagged ‘New Jersey business’

New Jersey’s Streamlined Business Reinstatement and Dissolution Program – Salvation at Last!

Every year in New Jersey, legally formed businesses must file a report and pay a fee to the State.  This allows businesses to maintain their legal status.  If a business does not file and pay for two consecutive years and is notified, the State may revoke its status.  As a result, the business can lose the legal powers conferred upon it, including:

  • the right to conduct its business;
  • the right to sue in court; and
  • the exclusive right to use its business name.

A revoked business may have difficulty obtaining financing.  The revocation, itself, could constitute a default under current financing agreements.  A revoked business may encounter difficulties in a sale, merger or acquisition, too.  Currently, there are approximately 370,000 inactive or revoked business entities in New Jersey.

Now, the good news: from March 1, 2020 through June 15, 2020, New Jersey will offer a streamlined process for revoked businesses to either reinstate their legal authority to operate or properly end their operations.  This process will require payment of a one-time $500 fee (plus a convenience or credit card processing fee), and completion of an online application.

The streamlined process promises to:

  • avoid the need (and cost) to apply for tax clearance;
  • avoid the cost of multiple past due annual reports and other fees that likely would exceed the one-time $500 fee;
  • offer expedited processing: one business day to reinstate or dissolve; and
  • provide dissolving entities with definitive closure of the business.

The State’s business registry program and the public at large will benefit as businesses update their filings and return to compliance.