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What happens if you don't pay your NJ INC Annual fees/report?

Newark, NJ |

I started a NJ incorporation and never made a dime. I didn't have money to even pay the annual fees for NJ. They gave me an option to pay a monthly fee on what was owed. I followed through with it but recently lost my job and I couldn't pay that amount.

They said that if I didn't pay them the monthly fee then the account would be forwarded to collections. What does that mean? In addition, I recently received a letter from the state that the company is no longer active and that if I ever wanted to use the company again I would have to pay what is owed and then re-open the company.

So where does this leave me? What are my liabilities?

In addition, when I am on my feet again, am I obligated to pay up for the annual fees if I don't want to use the company anymore? Or is that optional? I would like to pay anyway but would like to know. Also, when i am not paying, is that amount piling up to the bill or since the company is not in good standing the tax doesn't accrue?

Attorney Answers 3

Posted

You have an inactive corporation and have the state as a creditor pursuing a past due debt.

The answer given does not imply that an attorney-client relationship has been established and your best course of action is to have legal representation in this matter.

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Asker

Posted

Thanks Mr. Pippen. But I am a bit unclear. To what extent would they pursue it? Like I said i would be more than happy to pay it as soon as i get a job and i will do those monthly payments. So when the collection department gets in touch, is that what i tell them or will they be heavy on me getting them the money right away?

Joseph Franklin Pippen Jr.

Joseph Franklin Pippen Jr.

Posted

Offer small apyments-see what happens

Posted

They will suspend and latter disolve corporation. You are not personally liable for the fees.

Contact local consel

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Posted

I concur with my colleagues. A way to avoid the issue is, when you are ready to start a new entity, since there is no goodwill that you need to preserve, is to create a new entity with a different name, and instead of creating a corporation, create an LLC.

The foregoing is not intended to be legal advice upon which you may rely as I have not been retained for this purpose.

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Asker

Posted

Thanks Mr. Bearg. So in other words instead of reviving this company I can simply start a new one?

Martin L Bearg

Martin L Bearg

Posted

Yes. Martin L. Bearg, Esq., LL.M. (Tax) Admitted in NJ, NY & FL 160 South Livingston Ave., Suite 208 P.O. Box 2027 Livingston, NJ 07039 Tel: (973) 994-9080 Fax:(800) 466-9703 Email: <mailto:martin@bearglaw.com> martin@bearglaw.com Website: <http://www.bearglaw.com> www.bearglaw.com This electronic mail transmission and any attachment(s) may constitute an attorney-client communication or contain information which is privileged, confidential, and protected by the attorney-client or attorney work product privileges. It is not intended for transmission to, or receipt by, any unauthorized persons. If you are not the addressee or intended recipient, please note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please delete and destroy it without copying it, and notify the sender by reply e-mail. Circular 230 Notification: Pursuant to recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed here. _____

Asker

Posted

Thanks. But it's my understanding that the late fees/penalties and monthly charges keep applying to the balance. Isn't that a potential risk especially if that goes on for a long time?

Martin L Bearg

Martin L Bearg

Posted

You are personally responsible, as an officer of the corporation, for fiduciary taxes - employment and sale/use tax. You are not personally liable, especially if there have been no sales, for corporate income taxes or filing fees. Yes, the Division farms out collection to an independent collection agency, but its job is to collect, and convince you of all the terrible things that could happen if you fail to pay. Unless our great Governor Chris Christie as enacted new laws, with the assistance of the state Senate and Assembly, that I am not aware of, the foregoing is what I believe to be accurate. Martin L. Bearg, Esq., LL.M. (Tax) Admitted in NJ, NY & FL 160 South Livingston Ave., Suite 208 P.O. Box 2027 Livingston, NJ 07039 Tel: (973) 994-9080 Fax:(800) 466-9703 Email: <mailto:martin@bearglaw.com> martin@bearglaw.com Website: <http://www.bearglaw.com> www.bearglaw.com This electronic mail transmission and any attachment(s) may constitute an attorney-client communication or contain information which is privileged, confidential, and protected by the attorney-client or attorney work product privileges. It is not intended for transmission to, or receipt by, any unauthorized persons. If you are not the addressee or intended recipient, please note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please delete and destroy it without copying it, and notify the sender by reply e-mail. Circular 230 Notification: Pursuant to recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed here. _____

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