Administrative Dissolution
Administrative dissolution refers to the involuntary termination of a business entity by a state agency, typically the Secretary of State, due to non-compliance with state filing or fee requirements. This is a severe consequence of failing to maintain VA Loan Entitlement, Certificate of Eligibility (COE), and Loan Guaranty Certificate (LGC).
When a business is administratively dissolved, it loses its legal standing and may forfeit important protections, such as Limited Liability, which shields the personal assets of owners from business debts and liabilities. The business may also lose the right to transact business or sue in the state.
To reinstate an administratively dissolved business, specific state procedures must be followed, which often include filing all overdue reports, paying outstanding fees and penalties, and sometimes applying for reinstatement.
References
- What is a Certificate of Good Standing and Why it Matters — incorp.com
- Good Standing with SDAT | The Maryland People's Law Library — peoples-law.org
Source material
- research add cross references to conceptsgood standing secr 2026 05 17
Study the full exam sections
This page is reference detail. The five SAFE exam study guides put it in context.