If I have a business that is “not in good standing” with the state, can I start a new business?

UPDATED: Feb 20, 2012

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If I have a business that is “not in good standing” with the state, can I start a new business?

I have a business that is “not in good standing” with the state. This is because I did not “properly” file franchise tax with the state. I have since let this business fall by the wayside and have not done in business under its name for the past 3 years. Now I would like to start a completely new and separate venture but I worry if I’m going to have any problems because of my previous business.

Asked on February 20, 2012 under Business Law, Texas


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you want to start a whole new business in your state due to your failure to pay a state tax return for the entity in existence, you can do so without being prevented by your secretary of state. The type of entity would either be a limited liability company or a corporation and will need to be under a different name as the one you have in existence.

I suggest that you consult with a business attorney to create the new entity you desire and to dissolve the one that is not in good standing. It is best to clear matters up as to things before embarking on a new venture.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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