Revive a Delaware LLC or Corporation: Void Charter, Back Taxes, Penalties and Reinstatement Steps

A Delaware LLC or corporation can lose standing or face cancellation for failing to pay annual taxes or filing required reports. The path back depends on whether your entity is merely in default or actually canceled. This guide explains the distinction, the financial obligations you will face, and the exact steps to restore your Delaware entity to active status.

Two Levels of Delaware Trouble: Loss of Good Standing vs. Cancellation

Delaware law creates two separate problems. An entity can lose "good standing" without being canceled, or it can be canceled outright. These carry different consequences and different remedies.

Loss of good standing means the entity still exists as a legal entity, but it loses the right to sue in Delaware courts and file most documents with the Division of Corporations. You restore good standing by paying back taxes, penalties, and interest.

Cancellation means the Division of Corporations strikes the entity from the register. A canceled entity no longer exists as a legal entity and requires a formal revival filing to come back.

The difference is crucial because it determines your filing requirement and your costs.

How Delaware LLCs Lose Good Standing

Delaware LLCs owe a flat annual tax of $400, due June 1 each year following the calendar year in which the Certificate of Formation became effective. Check corp.delaware.gov for the current amount and date, as the rate was changed under HB 400 retroactive to tax year 2026, with the first $400 payment due June 1, 2027.

Failure to pay removes the LLC from good standing. At this point, the LLC:

• Cannot sue in Delaware courts
• Cannot file most documents (such as amendments and name changes) with the Division of Corporations
• May face a Chancery Court injunction against doing business in Delaware (see below)

If the LLC remains in default for three months or more, the Delaware Attorney General may seek a Chancery Court injunction to prevent the LLC from doing any business in Delaware.

Penalty and interest: The Division of Corporations assesses a penalty of $200, plus monthly interest at 1.5% of the unpaid tax amount. Interest runs at 1.5% for each month or portion of a month until the tax is paid (6 Del. C. 18-1107(c)).

Restoring Good Standing (Without Cancellation)

If your LLC is in default but not yet canceled, restoration is straightforward. You owe:

• All unpaid annual tax ($400 per year)
• The $200 penalty
• Monthly interest at 1.5% per month on the unpaid tax

You do not need to file a revival document. You restore good standing simply by paying all amounts due. The Division of Corporations will confirm restoration once payment is processed.

Until you pay in full, the LLC remains unable to sue or file documents in Delaware. This can be critical if you need to file documents with the Division or bring a lawsuit.

When Cancellation Happens: The Three-Year Rule

If the annual tax remains unpaid for three years from its due date, the Delaware Division of Corporations automatically cancels the Certificate of Formation. Cancellation means the LLC ceases to exist as a legal entity.

An LLC is also canceled if its registered agent resigns and no successor registered agent is named within 30 days after the resignation filing.

Once canceled, restoration requires a formal filing.

Reviving a Canceled Delaware LLC

To revive a canceled LLC, you file a Certificate of Revival with the Delaware Division of Corporations. The revival filing costs $220 (fee schedule revised August 1, 2026).

Before filing the revival, you must have paid or be prepared to pay at the time of filing:

• All unpaid annual taxes from the year of cancellation back to the year the tax first became due
• The $200 penalty for each year of non-payment
• Monthly interest at 1.5% per month on each unpaid tax amount

The Division of Corporations will not process the revival filing unless the tax, penalties, and interest due at cancellation are paid with the filing (6 Del. C. 18-1109(a)).

You file the Certificate of Revival electronically through the eCorp Document Upload Service at the Division of Corporations website. Processing time varies with filing volume. For faster processing, the Division offers expedited tiers: two-hour Priority 2 service ($500 per document) or one-hour Priority 1 service ($1,000 per document). The $50 next-business-day and $100 same-day tiers are for new formations, so check corp.delaware.gov for what applies to a revival.

Once the revival is accepted and all taxes are paid, your LLC is restored to full legal status. You can immediately sue in Delaware courts, file amendments, and operate the business.

How Delaware Corporations Lose Standing and Get Canceled

Corporations face a similar but distinct process. A Delaware corporation must file an Annual Franchise Tax Report by March 1 each year, with a $50 fee.

If a corporation fails to pay the franchise tax or fails to file the required annual report for one year, its charter is voided. The Governor then issues a proclamation repealing the charter, and the corporation ceases to exist as a legal entity.

This happens more quickly than the LLC three-year threshold. A single missed annual report or unpaid franchise tax can trigger cancellation.

Reviving a Canceled Delaware Corporation

To revive a canceled corporation, you file a Certificate of Revival with the Division of Corporations. You must include all unpaid franchise taxes and penalties.

The Division of Corporations does not publish a standard fee for corporation revival. Contact the Division at corp.delaware.gov to confirm the current revival fee and any other requirements specific to your situation.

Once the revival is accepted and all taxes are paid, your corporation is restored. You can resume business operations, file amendments, and participate in lawsuits.

Foreign Corporations (Out-of-State Entities)

If you have a foreign corporation (formed outside Delaware but registered to do business in Delaware) that has been canceled, reinstatement costs $125. Withdrawal from Delaware registration costs $175.

Contact the Division of Corporations for the specific documents and procedures for your foreign corporation situation.

Understanding the Penalty and Interest Trap

A $400 annual tax, if left unpaid for two years, becomes:

• $400 times 2 years = $800 in tax
• $200 times 2 = $400 in penalties (one penalty per year)
• Interest at 1.5% per month or portion of a month on each unpaid tax amount

Interest keeps running at 1.5% a month on every unpaid year, so the bill grows with each month of delay. This is why paying back taxes quickly, before default extends to cancellation, is far less expensive than waiting.

If you owe termination tax in addition (because you actually want to dissolve the entity), you must pay all back annual taxes for years the entity was supposed to be active before you can terminate.

The Registered Agent Cancellation Issue

A less obvious cause of cancellation: if your registered agent resigns and you fail to name a successor within 30 days of the resignation filing, the LLC Certificate of Formation is automatically canceled.

Many business owners do not monitor their registered agent status. If your registered agent (often a service provider) resigns without notice to you, your entity can be canceled while you are unaware.

Check your registered agent status immediately if you suspect any lapse. If cancellation has occurred due to registered agent failure, the revival process is the same: file a Certificate of Revival, name a new registered agent, and pay all back taxes and penalties.

Who Can Be a Registered Agent

A registered agent must have a physical street address in Delaware and be either a Delaware resident individual or a business entity authorized to act as a registered agent. A business located in Delaware can serve as its own registered agent.

Many business owners hire a registered agent service to handle mail and ensure compliance. If you serve as your own agent and move out of Delaware, you must resign and appoint a successor, or cancellation will follow.

Timeline and Costs for Revival

For a canceled LLC:

• Revival filing fee: $220
• Back annual taxes: $400 per year in default
• Penalties: $200 per year in default
• Interest: 1.5% per month or portion of a month on unpaid taxes
• Processing time: Standard processing varies with volume; expedited options include two-hour ($500) and one-hour ($1,000 per document) service

For a canceled corporation:

• Revival filing fee: Confirm with Division of Corporations
• Back franchise taxes and annual report fees: confirm with Division of Corporations
• Penalties: Contact Division of Corporations
• Processing time: Standard processing varies; expedited options available

Example: A Delaware LLC with three years of unpaid taxes

• Annual tax: 3 times $400 = $1,200
• Penalties: 3 times $200 = $600
• Interest: 1.5% per month or portion of a month on each unpaid amount
• Revival filing: $220
• Total before interest, using the $400 figure: $2,020

These are substantial amounts. The longer you wait, the larger they grow.

Steps to Revive Your Delaware Entity

1. Contact the Division of Corporations to confirm the exact amount of back taxes, penalties, and interest owed. Request a status check. Go to corp.delaware.gov.
2. Gather payment funds. Confirm the total with the Division, including any fees for revival filing and expedited processing if you need it.
3. Prepare the Certificate of Revival. Check corp.delaware.gov for the current Certificate of Revival form and requirements.
4. File electronically via the eCorp Document Upload Service.
5. Submit payment for all back taxes, penalties, interest, and the revival filing fee at the time of or immediately after filing.
6. Confirm acceptance. The Division will confirm when the revival is effective and good standing is restored.
7. Update registered agent status if the registered agent has changed or if you need a new one.
8. Resume compliance. For LLCs, ensure the annual $400 tax is paid each June 1 going forward. For corporations, file the annual report and pay franchise tax by March 1 each year.

Common Mistakes That Lead to Cancellation

• Ignoring the annual tax bill. Many owners assume a business that is not actively generating revenue does not need to pay state taxes. Delaware annual tax applies regardless of business activity.
• Confusing formation with ongoing compliance. Filing a Certificate of Formation is a one-time event. The annual tax is recurring and comes due every year.
• Losing track of dates. Without a calendar reminder, the June 1 LLC tax or March 1 corporation report deadline is easy to miss.
• Not monitoring registered agent status. A resignation letter from your registered agent service can arrive unnoticed, leading to automatic cancellation within 30 days.
• Waiting too long to restore. Interest runs every month and a $200 penalty is added for each year of non-payment, so the cost grows with every year of delay.

When to Seek Professional Help

This guide is informational content, not legal or tax advice. Revival involves state law, tax penalties, and potentially back income tax obligations. Consider consulting a Delaware business attorney and a CPA before taking action, especially if:

• The entity has been canceled for more than two years
• You plan to sell the business or transfer assets
• There are outstanding creditor claims or lawsuits
• You are unsure whether the entity owes state or federal income taxes in addition to the annual tax
• The registered agent resigned and you are unsure of your rights or obligations

An attorney familiar with Delaware business law can navigate the revival process, work with the Division of Corporations, and ensure all compliance obligations are met going forward. A CPA can calculate any federal tax liabilities and advise on whether the entity should be revived or dissolved.

Moving Forward: Staying Compliant

Once your entity is revived, set up a calendar reminder for the annual tax deadline (June 1 for LLCs, March 1 for corporations). A single missed deadline can restart the default spiral.

Even if your business is inactive or dormant, Delaware annual tax applies. If you no longer need the entity, formally dissolve it (rather than simply ignoring it) to avoid future penalties.

If you do dissolve, you must pay the annual tax through the year of dissolution before the dissolution is final. This prevents a situation where you think the entity is closed but actually owe back taxes years later.

For guidance on the right structure for your situation, contact the Delaware Small Business Development Center or the U.S. Small Business Administration Delaware District Office.