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WiseOwl58, Attorney
Category: Business Law
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Experience:  Experienced business lawyer.
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Re-Awakening of Inactive Corporation in PA? About ten years

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Re-Awakening of Inactive Corporation in PA?

About ten years ago I formed a small corporation (I *think* maybe an LLC??) and did so through the state of Delaware using a mail service as I was told this would cost less than doing so in PA.

It never made enough money that it would have been taxable after even the minimum business expense deductions. I am not good with paperwork, had no money to have it done properly, and let it slide and dropped the mail service. I have NO idea what the current legal status of the corporation is although I withdraw the several hundred dollars a year it brings into its biz acct. I have been living off savings and have not been filing taxes as my income has been below taxable levels since the 1990s.

I am now about to put out a new product, one which may indeed make five or ten thousand dollars or more in the next year or two and therefore I will need to pay attention to taxes and legalities again. My question is several-fold:

1) Is the old corporation likely to still be legal? If it suddenly "woke up" and was pulling in money would I run into a disaster of proving it hadn't made money for the last ten years with no real records to show that? Or could I get in trouble for having ignored its legal status for all this time? (No one else was involved in the corporation.)

2) Similar to (1): Would the IRS suddenly get upset if I suddenly appeared and filed taxes showing even a small income from the corporation after having been so invisible for so long?

3) Would it be a reasonable alternative option to simply ignore the old corporation and form a "self-proprietorship" in PA for the new business? I'd have no employees or "clients" -- just people who buy the product online, through local stores/consignments, or face-to-face.

{Addendum: yes, the obvious thing to do would be to hire a lawyer face-to-face for this, but those savings I spoke of have now gone to zero and I'm living on about $5,000 per year with help from my two sisters.}
No, you.would have to.start over again with a new corporation.

That original corporation had been revoked. You cannot use it any more. You must start over with a new incorporation.

Note,, you may be able to use the same name if you like, assuming nobody else has used it after your original corporation was revoked.

Good luck to you. I wish you all the best.
Customer: replied 5 years ago.

Thank you for a very quick answer Wise! :) But what bad things would happen if I simply set up either a self-proprietorship or formed a new corporation and simply let the old one continue to put several hundred dollars a year in my bank account? Corollary question: Can you point me to a resource where I could learn more about a self-proprietorship option? I know it's at least theoretically workable as I had an author/publisher friend I'm no longer in touch with but who did it for years in PA while writing/publishing four books.

if you keep receiving if you keep receiving money f. From the old Corporation.

under your own social security under your own social security number.

Goto the IRS website for good information about sole proprietorships
Customer: replied 5 years ago.

Sorry... I'm still really unclear about something in your answer: Are you saying that I could get in trouble simply for continuing to receive checks for the product that is registered to the old corporation even though there was no one else in that corporation? If the corporation is no longer a legal entity, would I be able to get the product or the checks from its purchases transferred over to a new corporate entity? Heh, the money has to go SOMEWHERE! :>

Thank you for the suggestion on sole proprietorships: I had thought they were a state-level thing and would not have thought of checking with IRS!

Here is my recommendation for how to handle the checks coming in to the old corporation.

What you do is execute an assignment of all assets of the old company to you. The old company would write that they assign all right, title and interest to the assets of the old company to you. Then you would sign it as the president of the old company. Once you have that assignment in hand, you can receive and cash the checks of the old company.

Good luck to you. I wish you all the best.
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