Massachusetts General Laws require a Limited Liability Company (“LLC”) to file an annual report each year. LLCs can be administratively dissolved by the Massachusetts Secretary of State if they fail to file annual reports for two consecutive years. If a LLC is dissolved, it can only exist for the purpose of winding down and does not have the capacity to continue operations.
In a recent Superior Court decision, a judge found that an administratively dissolved LLC could not exercise an option to acquire a piece of real estate. The LLC had been formed for the sole purpose of acquiring and developing that piece of real estate.
The Court rejected an argument that the LLC’s reinstatement could relate back and cure the dissolution. Such a remedy may be available for corporations in Massachusetts, but not for LLCs.
Massachusetts LLCs are required to file annual reports pursuant to 950 CMR 112.14 and protect their authority to do business and enter into contracts. If an LLC fails to file annual reports, it could suffer the same fate as the LLC in the recent case – its contracts could be invalidated.
If you have any questions regarding LLC reporting requirements or any other corporate or business questions, please contact one of the business attorneys at Doherty, Ciechanowski, Dugan & Cannon, P.C.