Changes to Texas Franchise Tax Rules
Changes to Texas Franchise Tax Rules allow for new, larger penalties for late filings.
In the past, the procedure to reinstate a forfeited company was the same regardless of how long the company had been forfeited. Now, the Texas Comptroller can charge more penalties for later filings.
- For franchise taxes and reports less than 4 years overdue:
- $50 late penalty for each late report;
- Estimated tax assessment, plus interest.
- For franchise taxes and reports overdue 4 years or more:
- Estimated tax assessment for each year the entity is in forfeiture over 4 years;
- Additional fee of 18 cents per day.
For example, if a company has been forfeited since 2015, the following is an estimate of the cost to reinstate it through the Texas Comptroller in 2019:
- 2015: $1,480 estimated assessed taxes + $65.70 (.18 x 365 days) = $1,545.70
- 2016-2019: $50 late penalty per year = $200
- Total Due: $1,745.70
It is not an option to terminate a company instead of filing the late documents and paying the fees because before you can terminate a company, it must be in good standing.
A Forfeited Texas Company Does Not Legally Exist.
A forfeited Texas company does not legally exist until it is fully reinstated by the Secretary of State. As a result, corporate protections are lost and there is a risk for personal liability for any debt of the company, including but not limited to the delinquent taxes discussed above.
We can help you reinstate a forfeited company and communicate with the Texas Comptroller regarding assessed penalties or fee. If your company has been forfeited or if you are unsure of the status of your company, please call us so we can assist you.
The legal information in this blog entry is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, nothing contained in this article is intended to create an attorney-client relationship with any reader. This article and website are made available by Waldron & Schneider for educational purposes only and to give basic information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney-client relationship between you and Waldron & Schneider. The article and website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. For more information or questions you can contact us and one of our attorneys will be in touch soon.
Waldron & Schneider wishes everyone a safe and Happy 4th of July. ... See MoreSee Less
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Associate Attorney Collin Bullard writes about the disadvantages of a general partnership in his blog.
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Disadvantages of a General Partnership
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Disadvantages of a General Partnership The Texas Business Organizations Code defines a partnership as “an association of two or more persons to carry on a business for profit.” Whether those indiv...1 CommentComment on Facebook
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Waldron and Schneider wishes Partner Richard Simmons a happy early 50th birthday!!! ... See MoreSee Less
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Congrats, Richard. Make sure to have some fun tomorrow.
HAPPY EARLY BIRTHDAY DAD
Happy Birthday!!🎉🎂
Associate Attorney Collin Bullard writes about the importance of buy sell agreements in his blog.
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The Importance of a Buy/Sell Agreement
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The Importance of a Buy/Sell Agreement Many small business owners understand the importance of creating an LLC or similar entity to protect the individual owners from potential liabilities of the c…1 CommentComment on Facebook
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Congratulations to Emily Simmons (daughter of partner Richard Simmons) who competed in the National American Miss Pageant this weekend! She was the Heart of service Winner!!! 4th runner up overall!! 3rd in Casual wear!!! ... See MoreSee Less
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