Administrative Dissolution

Definition - What does Administrative Dissolution mean?

Administrative dissolution is when the government dissolves, or shuts down a company or organization due to a failure to comply with regulations and/or laws. A simple failure to pay taxes could result in administrative dissolution. However, there are also more complicated reasons such as failure to maintain a valid registered agent.

Justipedia explains Administrative Dissolution

In order for a company or an organization to operate legally, it must comply with state and federal laws. This includes obeying statutes and regulations. So, if a corporation simply decides that it will not file an annual report, then it could face consequences such as administrative dissolution. Business regulatory laws are in place to make sure that companies are legitimate, fully qualified, pay their taxes, are honest with their investors, etc. Therefore, failure to comply with these laws can be taken quite seriously by the government.

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