S-Corp still valid for use?

Question

I created an S-Corp in PA in 2007. I used it for a couple years. All I've been doing for 3-4 years is filing the zero activity state and federal tax return. Is this entity still a legal entity in PA or do I need to start a new one?

Harold Gontz · Answer

Thank you for the feedback. I'll do some more research.

John Woodrich · Answer

In case I wasn't clear - the IRS and State will gladly take your returns and your money.  However whether you have a legal entity for protection is in question.

In MN it costs $150 or so to setup a new entity, I would advise my current clients to setup a new company.

Matt A. · Answer

My wife and I have an LLC that was created 8+ years ago, used for one purpose - re-characterized and used for another a couple years later. We then did nothing other than file RCT-101 (state informational returns) for several years, and recently started using it again. Its my understanding from our accountant that RCT-101 are now a thing of the past as well! In our particular case the accountant gave his thumbs-up per-se.Id suggest a call to your accountant for the "official line" on that one. If its a S_corp you might be okay, C-corp Im pretty sure would require a separate annual (even quarterly) return.... Im not tax expert (rather an investor that also doubles as an engineer for a very large computer manufacturer) so take that with a grain of salt.

Bryan Blankenship · Answer

I can't speak to PA law, but in Ohio, you'd have a fully legal entity ready to use.  I have entities in Ohio I leave sitting until I am ready to move property holdings into them in the future, some up to 5-7yrs old.

John Woodrich · Answer

You'll have to look at state law, in Minnesota you have to file an annual renewal which maintains your business as active in the state. If you are inactive for a period of time there is an administrative dissolution  and your company  is no longer a legal entity. If you look at the Pennsylvania Secretary of State website you will probably find useful information.

From a filing standpoint, if you have been filing 0 returns there is no reason the IRS or the Pennsylvania Department of Revenue will no longer recognize your company as a separate entity.

You may have a separate tax and legal answer to your question.