Receive a forfeiture notice?

Texas requires LLCs and corporations to file a Public Information Report (PIR) annually with the Texas Comptroller’s Office. The PIR discloses the current officers, directors, managers and members of the company. If this information becomes outdated (for example, if a prior owner is still listed after leaving the business), the state record creates the legal appearance that the person still has authority to act on behalf of your company. 

Businesses must also report certain changes to the Texas Secretary of State, including updates to ownership structure, registered agent and business address. Keeping both sets of records current is essential to maintaining your liability protection and legal standing.

CPAs have historically filed the Texas franchise tax report alongside the Public Information Report (PIR), and many still do. But there are two important gaps to be aware of. 

First, as of 2024, the franchise tax filing threshold was raised to $2.65 million in gross revenue. This means many businesses no longer need to file a yearly franchise tax report, which may cause some CPAs to stop submitting the PIR as well, since the two were typically filed together. 

Second, CPAs don’t always have visibility into internal business changes such as ownership transfers or management updates. As a result, your state records can reflect former owners or managers as still having authority over your company, which creates real legal exposure. Keeping your records accurate requires active coordination that goes beyond what most CPA relationships provide.

Rejections from the Texas Secretary of State’s office are more common than most people expect, and the reasons vary case by case. This can involve anything from how the certificate is filled out to questions about who has legal signing authority for the entity. 

We work with clients who were rejected multiple times on their own before coming to us. A professional experienced with Texas reinstatements can identify why your filing was rejected, correct the issue and resubmit with the right documentation so the process doesn’t keep stalling.

This is fixable, but you should act quickly. The most significant risk is that during any period your LLC was forfeited, you lose the limited liability protection that shields owners and managers from personal liability. Any debts, lawsuits or obligations that arose while the entity was forfeited could expose you personally. 

A forfeited LLC may also lose the legal authority to sign contracts, open bank accounts or sell property held in the company’s name. We’ve worked with clients whose LLCs had been forfeited for years. In one case, a client couldn’t sell a property her LLC owned because she no longer had the authority to sign on the company’s behalf. 

So the sooner you reinstate, the more you limit your exposure.

You don’t always need a lawyer, but restoring a forfeited Texas LLC is a multi-step process involving two separate state agencies. First, you must go through the Texas Comptroller’s Office to file any missing franchise tax or Public Information Reports, pay back penalties and obtain a tax clearance letter. Then you must file for reinstatement with the Texas Secretary of State. 

If you don’t already have accounts with both agencies, this alone adds days to the process. Working with a professional who knows how to file these reinstatements — and who has the authority to sign on behalf of the entity — reduces the risk of rejection and makes sure everything is done correctly the first time.