New York “Dissolution by Proclamation”: What It Means and How to Reinstate

Dissolved, annulled, or past due: which one applies to you

The phrase people search often pairs two outcomes: “dissolution by proclamation” and “annulment of authority.” They come from the same process, but they apply to different kinds of companies. A third situation, a past due biennial statement, is the one an LLC faces instead.

Section 203-a applies to “stock corporations and corporations formed for profit.” Section 701(a) of the Limited Liability Company Law lists the ways an LLC dissolves, and a tax proclamation is not one of them. Our guide to reinstating an LLC that is not in good standing compares how New York handles this with other states. For an LLC, the Department of State says a missed statement shows up as past due, and “Any Certificate of Status or status letter” will say so.

Some nonprofits face a similar process under Not-for-Profit Corporation Law Section 1014. It covers nonprofits registered, or required to register, under Executive Law Article 7-A or Estates, Powers and Trusts Law Article 8. The trigger is five years of missing annual financial reports. It works differently, as the address section below shows.

What triggers it: Sections 203-a and 203-b side by side

Both sections let the Tax Department send a list by the end of March, June, September or December. The list can include corporations that meet the triggers below. We read both sections in full on the New York Senate’s official laws site and counted the triggers in each.

Section 203-a has two triggers. The first covers a New York corporation that has “not filed reports required under this article during the period of two consecutive years.” The second covers one that has “been delinquent in the payment of taxes for any two years duly assessed.” The section excludes corporations formed under special acts, and “banking, insurance and railroad corporations.”

Section 203-b has three triggers. It uses the same report and tax periods as 203-a. It adds a third: being “delinquent in the payment of maintenance fees imposed under this article for a period exceeding ninety days.” That third trigger applies only in 203-b, to authorized foreign corporations.

The Tax Department’s summary says a corporation that “doesn’t file franchise tax returns or pay franchise taxes for two or more years” may be dissolved. Note the wording in the law itself. The report trigger needs two consecutive years. The payment trigger counts any two assessed years, so they do not have to be in a row.

What changes after the proclamation

The corporation is dissolved, but its tax filings do not stop. The Tax Department says a corporation dissolved by proclamation “must continue to file returns and pay taxes or fees” until it is reinstated or completes a voluntary dissolution.

The name is protected only for a short time. Subdivision 6 of Section 203-a reserves the names of dissolved corporations “for a period of three months immediately following the publication of the proclamation.” After that, another company can take the name. If that happens, subdivision 7 says the corporation cannot reinstate under its old name unless it files a certificate of change of name at the same time. The Tax Department’s instructions say a corporation that changes its name must also file a Certificate of Amendment.

Winding-up rules apply. Section 1009 of the Business Corporation Law says Sections 1005 through 1008 apply to a corporation dissolved under Section 203-a. Those sections cover what a dissolved corporation may do, claims by creditors, and court supervision. A New York attorney should read them against your facts, especially if a lawsuit or contract is involved.

How to reinstate a corporation dissolved by proclamation

The Tax Department’s reinstatement instructions (publication TR-194.1) set the order. The same steps cover a foreign corporation whose authority was annulled.

1. 1Call the Tax Department’s Corporate Dissolution Unit at 518-485-2639. It checks which returns and payments are missing.
2. 2File every outstanding return and pay the tax due, current or delinquent, with any penalty and interest. The Tax Department asks for a separate check for each return.
3. 3Wait for the Tax Department’s written consent. It is sent once the corporation is up to date.
4. 4File the written consent with the Department of State, along with the Certificate of Payment of Taxes from the Tax Department and the filing fee.
5. 5Check that the corporation’s original name is still available. If you change the name, file a Certificate of Amendment as well.

Subdivision 7 of Section 203-a sets the standard for consent. It is given only if the Tax Department finds that all fees and taxes, “as well as penalties and interest charges related thereto,” have been paid. Once filed, the consent annuls the dissolution, “with the same force and effect as if such proclamation had not been made or published.”

The fee is $50 on the Department of State’s fee schedule for both a New York corporation (203-a) and a foreign corporation (203-b). For a New York corporation that files more than three months after the proclamation, Section 203-a adds a charge based on its authorized shares. It is “one-fortieth of one percentum” of par value shares, and “two and one-half cents for every share without par value.” Section 203-b, as we read it, has no such added charge.

Sections 203-a and 203-b require no warning: the addresses you must keep current

We read all ten subdivisions of Section 203-a and all nine of Section 203-b. We pulled every sentence that tells the state to mail or send something outside the two agencies. Each section has two. The first mails the bulletin with the proclamation to every county clerk. The second, after a reinstatement or a corrected listing, publishes a notice and sends the bulletin to one county clerk. Neither section tells the state to mail the corporation a warning before the proclamation.

Compare Not-for-Profit Corporation Law Section 1014, which covers the registered nonprofits described above. Such a nonprofit can be listed only after mailed warnings. The Attorney General must have “sent to such corporation by certified mail return receipt requested notice” in each of the last two years of missed reports. Section 1014 also requires that the Attorney General “used reasonable diligence to identify a current address for the corporation.” Sections 203-a and 203-b contain no such step.

Two addresses decide what reaches you. The first is the Tax Department’s address for your business tax account, where tax bills and letters go. Tax Law Section 1081 says a notice of deficiency, including one the Tax Department estimates when a return is not filed, “shall be mailed by certified or registered mail to the taxpayer at its last known address.” You can change that address in Business Online Services, or on paper with Form DTF-96, Report of Address Change for Business Tax Accounts.

The second is the Department of State’s address for service of process. A lawsuit against a corporation is often served on the Secretary of State. Business Corporation Law Section 306 then has the Secretary of State send a copy by certified mail. It goes “at the post office address, on file in the department of state, specified for the purpose.” The Department of State puts the risk plainly: “Many companies move their location and neglect to notify the New York Department of State.” Filing a biennial statement, it says, lets a company update that address and avoid “the possibility of a default judgement.”

The Department of State’s fee schedule lists the biennial statement at $9 and a certificate of change under Business Corporation Law Section 805-A(a) at $30. The process address on the biennial statement “shall supersede any previous address on file,” in the words of Section 408. The Department of State also emails a reminder when a biennial statement is due, if an email address has been provided to it.

The tax account address and the service of process address are separate records. Change each one in its own place. Our guide to the New York LLC publication requirement covers the address that goes in the published notice. Our free address checker shows how an address you plan to use is classified before you put it on a state filing.