If your US LLC was administratively dissolved by the state, you have three problems running in parallel, not one. The state Secretary of State wants back annual reports and franchise tax. The IRS wants Form 5472 + Pro Forma 1120 for every year you missed (with a $25,000 penalty per year per form, currently 2026 inflation-adjusted). And the CRA wants any T1134/T1135 reporting that was due during the dormant period. Most cross-border articles cover only the state leg. This post is the full three-track decision tree, including when reinstating costs more than just forming a new LLC.
30-second triage: dissolution type and your timeline
Before pulling forms, identify your situation.
| Situation | What it means | Time pressure |
|---|---|---|
| Voluntary dissolution | You filed Articles of Dissolution. LLC is permanently dead. Reinstatement not available. | New formation only |
| Administrative dissolution (most common) | State revoked your charter for compliance failure. Reversible. | Most states 5-year window before permanent loss |
| Permanent revocation | Beyond reinstatement window. Charter cannot be revived. | Must form a new LLC |
| In good standing but missed federal filings | LLC alive, but Form 5472 etc not filed. | Catch-up only, no SOS work |
This post focuses on administrative dissolution, the path most Canadian LLC owners face.
Four common triggers for administrative dissolution
States dissolve LLCs administratively when one of these compliance failures persists.
- Annual or biennial report not filed (most common). Most states require annual report with current officer/manager info. Failing two years in a row triggers dissolution in most jurisdictions.
- Franchise tax not paid. California's $800 minimum franchise tax accumulates yearly with penalties. Texas franchise tax (no-tax-due return required even at zero, $2.65M threshold for tax 2026~2027). Delaware $300 annual.
- Registered agent vacancy. RA service lapsed (non-payment to your provider) or resigned. State sends written notice; if not cured in time window, dissolution follows.
- Annual fee not paid. Some states bundle fee with annual report (Wyoming $60+, Nevada list fee). Non-payment dissolves the LLC.
For a Canadian owner who often pays a registered agent service from overseas, the registered agent vacancy and annual report misses are the two most common triggers. Both cascade quickly: the RA lapse means you stop receiving state mail, then the annual report notice is missed.
State reinstatement matrix (2026)
Reinstatement procedures, fees, and time windows vary widely. Grouped patterns:
| State pattern | Reinstatement window | Reinstatement fee | What you must file |
|---|---|---|---|
| Delaware | Indefinite reinstatement (any time) | $200 + back franchise tax + penalty | Certificate of Revival of LLC |
| Wyoming | 2 years before name release | $50-100 + back annual fees | Reinstatement application + back annual reports |
| Nevada | 5 years | $300 + $400 reinstatement + back fees | Application + List of Managers + Initial List filings missed |
| Florida | 5 years | $138.75 standard + $400 reinstatement | Reinstatement form + back annual reports |
| California | 4 years (then permanent) | $250 reinstatement + back $800/year franchise tax + penalties | Application for Revivor + FTB clearance |
| Texas | 3 years standard | $75 reinstatement + back franchise tax (often $0 if under threshold) | Tax Clearance + reinstatement application |
| New York | Anytime (publication exempt for reinstatement) | $50 reinstatement + back biennial reports | Application + biennial reports for missed years |
| Washington | 5 years | $150 + back annual reports + license renewal | Reinstatement application |
Two patterns to note. First, California is the most expensive path because $800/year franchise tax accumulates with $250 monthly compounding penalties. A 3-year dormant California LLC easily costs $4,000+ to reinstate. Second, Delaware never expires the reinstatement option, but back franchise tax + penalties add up. A 5-year dormant Delaware LLC owing $1,500+ in catchup is common.
IRS Form 5472 and Pro Forma 1120 catch-up
The federal layer is often more expensive than the state layer for Canadian-owned LLCs that are SMLLCs.
A Canadian-owned single-member LLC (disregarded entity) must file Form 5472 + Pro Forma Form 1120 every year the LLC has any reportable transaction with its foreign owner. Reportable transactions include capital contributions, distributions, loans, and effectively most cash flow.
Penalty: $25,000 per year, per Form 5472, since 2018. Inflation-adjusted slightly higher in 2026 (around $26,500). For a 5-year dormant LLC, exposure is $125,000+.
Two relief routes most Canadian LLC owners can use:
First-Time Abatement (FTA): Available when (a) the taxpayer has a clean 3-year compliance history before the missed year, and (b) all currently due returns are filed. FTA waives the penalty entirely for the first year of failure. Apply by writing IRS or by phone after notice received.
Reasonable Cause: Available when there was a substantial cause (illness, advisor error, reasonable reliance on tax professional). Submit written statement with supporting documentation.
A typical Canadian SMLLC owner sequence:
- File all missed Form 5472 + Pro Forma 1120 returns (current and back years), marking them late
- After IRS sends penalty notices, file FTA request for the first missed year and Reasonable Cause for subsequent years
- If denied, appeal to the IRS Office of Appeals
Most clean-history Canadian owners get full FTA + partial Reasonable Cause relief, reducing $125K exposure to $0–$25K.
CRA T1134 and T1135 catch-up
The Canadian side has its own missed reporting.
T1134: Foreign Affiliate Information Return, due 12 months after the Canadian taxpayer's year-end. Required if the Canadian taxpayer has a controlled foreign affiliate. A Canadian individual or corporation owning >10% of a US LLC generally has T1134 obligations.
T1135: Foreign Income Verification Statement, due with the Canadian return. Required if foreign-held property exceeds $100,000 CAD at any point during the year. US LLC interest can be foreign-held property.
Penalties for missed T1134/T1135:
- T1135 late filing: $25/day up to $2,500
- T1134 late filing: $25/day up to $2,500 per affiliate
- Gross negligence penalty (separate): $500/month up to $12,000
CRA Voluntary Disclosure Program (VDP) provides relief similar to IRS FTA:
- General Program: penalty relief, partial interest relief
- Limited Program: penalty relief, no interest relief (when CRA already aware or close to aware)
VDP requires that the taxpayer come forward before CRA contacts you. No-name disclosure pre-VDP consultation is available to determine eligibility.
EIN: keep it or get a new one
A common question: do I need a new EIN after reinstatement?
The IRS does not automatically revoke EIN when a state administratively dissolves the LLC. The EIN remains valid for the same legal entity. After reinstatement:
- Same legal entity, same EIN: Continue using the existing EIN. Update IRS records via Form 8822-B if address or responsible party changed during dormancy.
- Different state of formation (you reinstated in a new state instead): New EIN required because new legal entity.
- Form 8832 election change during dormancy: Same EIN, but next year's filing reflects the new classification.
Keep documentation of EIN issuance and any IRS correspondence in case the state asks for proof of federal good standing.
Reinstate or form a new LLC?
A Canadian owner sometimes finds that reinstatement is more expensive than forming a new LLC. The break-even depends on state, dormancy duration, and FTA availability.
| Factor | Favors reinstatement | Favors new LLC |
|---|---|---|
| State franchise tax accumulation | Low (Wyoming, Delaware light years) | High (California $800/year + penalties) |
| 5472 missed filings | First year missed only (FTA covers) | 3+ years missed, weak Reasonable Cause |
| Customer relationships, brand, contracts in LLC name | Strong reason to reinstate | If brand-new launch, no continuity needed |
| EIN tied to existing US bank account | Strong reason to reinstate | If no US banking yet, new LLC simpler |
| Existing Form 5472 history with IRS | Strong reason to reinstate | Clean slate may be cleaner |
| Real estate or fixed assets in LLC name | Cannot easily transfer; reinstate | N/A |
Common decision rule: if California reinstatement cost (back franchise tax + penalties + 5472 catchup) exceeds $5,000 and you have no inventory/contracts/banking dependent on the existing LLC, forming a new LLC in a different state can be cheaper and faster.
Worked example: Toronto resident, 3-year dormant Wyoming LLC
Concrete numbers ground the framework.
Assumptions:
- Wyoming LLC formed 2022, dissolved administratively 2024 for unpaid annual report
- Owner: Toronto-based individual (clean compliance history)
- 3 years missed: 2024, 2025, 2026 annual reports + 5472/Pro Forma 1120
State reinstatement (Wyoming):
| Item | Amount |
|---|---|
| 2024 annual report fee | $60 |
| 2025 annual report fee | $60 |
| 2026 annual report fee | $60 |
| Reinstatement fee | $100 |
| Late penalties | ~$50 |
| Wyoming subtotal | $330 |
IRS catch-up:
| Item | Amount |
|---|---|
| File 2024 Form 5472 + Pro Forma 1120 (late) | $0 (form fee) |
| File 2025 same | $0 |
| File 2026 same | $0 |
| 2024 penalty notice | $26,500 |
| FTA application for 2024 | -$26,500 (waived) |
| 2025 penalty notice | $26,500 |
| Reasonable Cause for 2025-2026 (success likelihood ~70%) | -$26,500 to -$53,000 |
| IRS net exposure | $0–$26,500 |
CRA catch-up:
| Item | Amount |
|---|---|
| T1134 for 2024-2026 (assumed required) | $0 (form fee) |
| Late filing penalty (3 years) | up to $7,500 |
| VDP application | -$7,500 (waived if approved) |
| CRA net exposure | $0–$7,500 |
Total best case (FTA + VDP both succeed): $330 (Wyoming) only. Total worst case (no relief): $40,000+.
For comparison, a fresh new Wyoming LLC formation: ~$200 + new EIN ($0). Best case for reinstatement is barely cheaper than new LLC; worst case is far more expensive. The Toronto owner should weigh customer/banking continuity against the worst-case exposure.
Frequently asked questions
My LLC was dissolved 6 years ago. Can I still reinstate? State-dependent. Delaware allows reinstatement at any time. California has a 4-year window. Most other states have 3-5 year windows. After the window closes, you must form a new LLC. The federal 5472 catch-up may still be required for years the LLC technically existed, even if you cannot recover it on the state side.
Will the IRS hit me with the $25K Form 5472 penalty automatically when I file late returns? The IRS typically sends penalty notices a few months after late returns are processed. You then have 30 days to respond. The First-Time Abatement and Reasonable Cause routes are processed in response to those notices. Filing late returns first is the right sequence; do not delay filing while waiting for penalty resolution.
Can I just let the LLC stay dissolved if I have no US business activity anymore? Possible but risky. State debt (back franchise tax in California, for example) follows the entity until paid or written off, sometimes affecting the registered agent or member personally. Federal Form 5472 obligations may continue if the LLC technically exists. A formal voluntary dissolution after reinstatement is cleaner if you are exiting, even if it costs more than walking away.