A letter that says your right to transact business is forfeited reads like the end of the company. It is a franchise tax problem with a known fix, and the fix has an order: clear the Comptroller first, then file with the Secretary of State. Every step below links to the state page it comes from.
Free: email us your taxpayer number, get your live status and the exact forms back
One business day, one reply, no account. If you would rather have the file prepared for you, the same email gets you a flat quote before any work starts (section 05).
Texas collects a franchise tax from most entities every year, with a report due in May. When a report, an information report, or a payment is missing, the Comptroller sends notice and, if the entity does not cure within the statutory window, forfeits its corporate privileges: the right to transact business in Texas. That is the letter you received. The company still exists at that point. The Secretary of State can later forfeit the charter itself, which is the harder case.
Two sections of the Tax Code carry the weight here. Section 171.251 is the forfeiture of corporate privileges. Section 171.255 is why it matters: while the forfeiture stands, the people who run the company can be held personally liable for debts the company creates. Read the section yourself before you decide how urgent this is; we quote it in section 03.
The Comptroller steps are the state's own list, from its reinstatement page. The Secretary of State steps come from the Form 801 instructions and the reinstatement FAQ.
| Step | Agency | What happens | Form |
|---|---|---|---|
| 1 | Comptroller | File every outstanding annual franchise tax report and every Public or Ownership Information Report, through the reinstatement date. | Franchise tax reports |
| 2 | Comptroller | Pay all tax, penalty and interest due. The state says steps 1 and 2 must be complete before step 3. | Payment |
| 3 | Comptroller | Request a Tax Clearance Letter, online through Webfile or on paper. If you just paid, wait two to three business days before asking. | 05-391 |
| 4 | Comptroller | Receive the Tax Clearance Letter. This is the document the Secretary of State needs; it states the entity has satisfied its franchise tax obligations and is eligible for reinstatement. | 05-377 |
| 5 | Secretary of State | File the Application for Reinstatement with the 05-377 letter attached and the $75 fee (no fee for a nonprofit corporation). Online through SOSDirect or SOSPortal, or by mail to P.O. Box 13697, Austin, TX 78711-3697. | 801 |
| 6 | Secretary of State | If your entity name is no longer available by then, an amendment changing the name must be submitted at the same time as the application. Otherwise the reinstatement is processed and the right to transact business returns. | Amendment, if needed |
Personal liability for new debts. Tax Code section 171.255 makes the directors and officers of a forfeited entity liable for debts the entity creates or incurs after the report or tax was due and before the privileges are revived, with the exceptions the section itself lists. In plain terms: the shield that an LLC exists to provide is down for new obligations until the cure is filed. Read the section, not our summary, before you rely on it.
The name. A forfeited entity can reinstate at any time, as long as it would otherwise still exist. What is not guaranteed is the name: if another filer takes it before you reinstate, the Secretary of State requires a name amendment filed together with the application. The longer the forfeiture stands, the more likely the name conversation is part of the cure.
The Comptroller's franchise tax account status search shows the entity's standing as the state holds it today: active, not in good standing, right to transact business forfeited, or franchise tax involuntarily ended. Search by taxpayer number, entity name, or Secretary of State file number.
One thing we measured ourselves, in September and October 2026, is worth knowing: the state's bulk open-data file can still show an entity as active weeks after the live search shows it forfeited. If you looked yourself up in a downloaded dataset or a third-party site and saw "active", that is not the answer. The live search is.
Do not want to decode the codes? Email the desk your taxpayer number or entity name and the wording of your letter. We reply within one business day with your live status and the exact forms your case needs. No charge, no account, nothing sold in that reply.
If you would rather not run the sequence yourself, we prepare the file: the list of every missing report with its period, the 05-391 clearance request filled from your account, the Form 801 packet ready for signature with the letter attached, and a one-page filing checklist in the state's order. You sign, you pay the state, we check the live record after each step and tell you when the right to transact business is back.
How it is priced. A flat fee, quoted by email before any work starts, after we have read your live status. Nothing is charged until you say yes to the quote. The state's own fees ($75 to the Secretary of State, plus whatever tax, penalty and interest the Comptroller shows) are paid by you, to the state, never through us.
We are a records and document-preparation desk, not a law firm, and we do not represent you before the Comptroller or the Secretary of State. If your case has a dispute, a missing year you cannot reconstruct, or a tax amount you want to contest, a Texas attorney or CPA is the right call and we will say so in the reply.
Narrated walkthroughs of the sequence above, publishing on the RecordRefinery channel; each one cites the state page it draws from. Titles below; links are added as each video goes live.
| # | Title | Covers |
|---|---|---|
| 1 | Your Texas LLC was forfeited. Here is the cure. | The overview and the order of operations |
| 2 | Step 1: clear the Comptroller | Reports, payment, the 05-391 request |
| 3 | Step 2: Form 801 and the $75 fee | Why it bounces without the 05-377 letter |
| 4 | Your name while forfeited | Availability and the amendment rule |
| 5 | Personal liability under section 171.255 | The section, quoted |
| 6 | Why the letter arrives in the fall | The May deadline and the notice sequence |
| 7 | "Active" in the file, forfeited on the live search | The open-data lag, measured |
| 8 | Tax-forfeited or charter-forfeited? | Which case you are in |
How long does the cure take? It depends on how many reports are missing and how fast you can pay. The Comptroller asks you to wait two to three business days after a payment before requesting the clearance letter, and the Secretary of State processes online filings faster than mail. Starting at the Comptroller is the only part you fully control.
Can I just file Form 801 now? Not usefully. The application must be accompanied by the 05-377 Tax Clearance Letter, and the letter is issued only after every report is filed and every balance paid.
Is the company dissolved? A tax forfeiture of corporate privileges is not a termination. The Secretary of State's own FAQ says an entity forfeited under the Tax Code can reinstate at any time, provided it would otherwise still exist. A forfeited charter is a further step the Secretary of State takes; the reinstatement sequence is the same with the charter restored in the same filing.
Is this legal advice? No. This page summarizes the state's published pages and statutes and links every one of them. Document preparation means we fill the forms from your records; the decisions, the signatures and the payments are yours.
Who are you? RecordRefinery is a records desk operated by Inform Media LLC. Our other work is weekly court-record feeds by county. The Texas cure desk exists because the same records that show a forfeiture also show how to fix it, and most people who receive the letter never find the order.