Legal Question in Business Law in Delaware

Re: Consequences Behind Forfeiting an LLC

You actually need an answer from a Delaware lawyer, not a New Yorker like me. However:

IN NEW YORK (I don't know about Delaware):

Simply not paying franchise taxes does NOT "forfeit" the company; it simply makes the company inactive. To make a company finally go away, a Certificate of Dissolution is required.

IN NEW YORK (I don't know about Delaware):

Having an inactive company sitting out there is not a particularly big deal, though it's much cleaner to dissolve it. I suppose that an inactive company could get sued and hale you into Delaware courts, or perhaps some day unpaid franchise taxes could catch up with you; those are the two biggest problems I see.

IN GENERAL:

LLCs in general do not cross state lines well; they are very, very new in the law (Wyoming was the first, in the late 1980s), and the LLC law in one state may not provide the same protections as the LLC law in another, which makes a company's activities outside of its state of formation very vulnerable to piercing of the corporate veil that the LLC business form is supposed to drop.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.