My Texas LLC Is Not in Good Standing: How to Fix It
Updated: Aug 17
When your Texas LLC shows as not in good standing, the state has flagged your franchise tax account as non-compliant, almost always because a required annual filing was not submitted. It is a warning state, not necessarily the end state: depending on how long the problem has run, your LLC may be at the early flag stage, already forfeited, or somewhere in between, and the fix is sized accordingly.
A detail worth knowing before you go further: the Texas Comptroller no longer officially uses the term "good standing." What everyone still calls good standing is now formally your Franchise Tax Account Status, the record lenders, title companies, and counterparties pull to verify your right to transact business. The vocabulary changed; the stakes did not.
The fix is the same family of work covered throughout this series: file the missing franchise tax reports and Public Information Reports, resolve any penalties and tax, and complete the Secretary of State stage if the problem progressed that far. This article covers what the status actually means, where your LLC sits on the spectrum from flagged to forfeited, how to prove your standing to whoever is asking, and how to restore it.
Is Your Texas Business Currently Forfeited? If your business shows forfeited or not in good standing with the Texas Comptroller, every day this stays unresolved increases your personal liability. We handle the entire reinstatement process, full entity review, every missing filing prepared, Comptroller submission, and good standing restored. Many businesses owe nothing beyond the missing reports.
What does not in good standing mean for a Texas LLC?
It means the Comptroller's records show your LLC's franchise tax account is not current: a report was not filed, a balance was not paid, or both. Texas requires nearly every LLC to file annually by May 15 even when zero tax is owed, so the flag reaches profitable companies, dormant companies, and single-member LLCs that never knew a filing existed with equal indifference.
The status lives on the Comptroller's public records, where anyone who checks can see it, and it tends to surface at exactly the moments the original version of your paperwork mattered: loan applications, license renewals, closings, and contract diligence.
The status is also a spectrum rather than a single condition, and knowing where you sit on it determines the size of your fix.
Is not in good standing the same as forfeited in Texas?
No, and the difference is the difference between a warning and a consequence. Here is the spectrum:
Stage | What it means for your LLC | What fixes it |
In good standing (active) | Franchise tax account current; full rights intact | Nothing; keep filing each May 15 |
Not in good standing | A filing or balance is outstanding; rights generally still intact but the public flag is live and forfeiture is on the horizon | File and pay what is missing, promptly, before the state escalates |
Right to transact business forfeited | The Comptroller has revoked your business privileges; the courtroom closes and personal exposure attaches | Full reinstatement through the Comptroller |
SOS forfeited existence | The Secretary of State has forfeited the charter itself | Comptroller compliance plus a tax clearance letter and SOS reinstatement filing |
Catching the problem at the second row is the cheap version of this story: file what is missing and the flag clears without a forfeiture ever occurring. If your record already shows one of the forfeited statuses, your situation and its first 24 hours are decoded in Texas Business Status Shows Forfeited: What Do I Do, and what forfeiture costs while it lasts is covered in What Happens If Your Texas Business Is Forfeited and How to Fix It.
How do I prove my Texas LLC is in good standing?
This is the question behind the question, because most owners discover their status when someone else demands proof of it. Texas offers different documents for different audiences, and asking for the wrong one costs days:
Document | Who issues it | What it proves and when you need it |
Franchise Tax Account Status printout | Comptroller, from the public Taxable Entity Search | The everyday proof: shows your right to transact business; sufficient for many lenders and counterparties |
Certificate of Account Status | Comptroller, on request | Formal confirmation of your franchise tax standing; often requested in financing and real estate transactions |
Certificate of Fact - Status | Secretary of State | Confirms the entity's existence and status on the SOS record; commonly required for out-of-state registrations, acquisitions, and closings |
The practical move when a lender or counterparty asks for "a certificate of good standing" is to ask which agency's document they want, because Texas splits the concept across two offices, and a Comptroller printout will not satisfy a requester who needed the Secretary of State's certificate. Both are quick to obtain when your account is clean, which is precisely the point: every document above is available in minutes to a compliant LLC and unavailable at any price to a forfeited one.
The document Marcus's banker actually wanted
The last unwritten scene of Marcus's story from this series is the paperwork that reopened his loan file. After his HVAC company's filings processed and his status cleared, his banker did not want a narrative, an apology, or a letter from anyone. He wanted to run the same check that froze the loan and watch it come back clean, plus a current status document for the file. Marcus pulled the Comptroller's account status the morning his record updated, sent it before lunch, and the file reopened that week.
The lesson generalizes: the institutions that discover your status problem will accept the state's own records as the cure, and nothing less. Which means restoring the record is the entire game, and collecting the proof afterward takes minutes. Owners sometimes ask whether there is a way to reassure a lender while the fix is still processing. There is, and it is the same one Marcus used at discovery: a specific, honest account of what is missing and when it will be resolved. But the document that ends the conversation only exists on the other side of the fix.
Someone asked you for proof of good standing. The fastest path to that document is the fix itself. We restore your LLC's standing end to end: full review, every missing filing prepared and submitted, and the status record your lender or counterparty will actually accept.
How do I restore my Texas LLC to good standing?
Match the fix to your stage on the spectrum above. If you are flagged but not forfeited, file the missing franchise tax reports and Public Information Reports and resolve any balance, and the flag clears without further process. If the Comptroller has forfeited your right to transact business, the same filings become a formal reinstatement. If the Secretary of State has acted, add the tax clearance letter and the SOS application.
The year-by-year filing requirements, including the 2024 change that ended the No Tax Due Report for current years, are detailed in Texas Franchise Tax Not Filed: How to Reinstate Your Texas Business, and the complete journey, including how to stay in good standing permanently afterward, is mapped in the Complete Guide to Reinstating Your Business.
Final thoughts: how worried should I be about a not in good standing flag?
Less worried than a forfeited owner and more urgent than a compliant one. The flag is the state telling you, in public, that the escalation machine has started, and everything downstream of it, forfeiture, personal exposure, a second agency, is avoidable from where you stand today.
The owners who turn this flag into a crisis are the ones who treat it as cosmetic. Treat it as a deadline with your company's name on it, clear it this month, and it becomes a status you saw once and never again.
Once processed, your Texas LLC returns to good standing.
The flag is public. So is the fix, the moment it is done. Aureus Advisory Partners restores Texas LLCs to good standing every week: full review, every filing handled, status confirmed on the state's own records where everyone who checks can see it.
Frequently Asked Questions
Does Texas still use the term good standing?
Not officially at the Comptroller: the record everyone calls good standing is now formally the Franchise Tax Account Status, which shows an entity's right to transact business. The older term survives everywhere in practice, in bank checklists, contracts, and conversation, so you will keep hearing it. What matters is knowing that when someone asks about your good standing, the Comptroller's account status record is usually what they mean.
What is a Certificate of Fact - Status in Texas?
It is the Secretary of State's certificate confirming an entity's existence and status on the SOS records, the document other states call a certificate of good standing or certificate of existence. Requesters such as out-of-state registration offices, acquirers, and some lenders specifically require this SOS document rather than the Comptroller's franchise tax records, so confirm which agency's certificate your requester needs before ordering.
Can my Texas LLC be active with the Secretary of State but not in good standing with the Comptroller?
Yes, and it is one of the most common configurations, because the two agencies answer different questions. The SOS record tracks the entity's existence and charter, while the Comptroller tracks franchise tax compliance, where problems begin. An LLC can show intact at the SOS while flagged or even forfeited at the Comptroller, which is why any real status check runs both searches.
Is my personal liability protection gone if my LLC is not in good standing?
The flag alone does not strip your liability shield. The serious exposure arrives if the problem progresses to forfeiture, and Texas law then ties personal liability for certain debts to a window that reaches back to when the missed report was due, which can be well before the forfeiture itself. That reach-back is exactly why a not in good standing flag deserves prompt action, and the full mechanics are covered in the personal liability article in this series.
Can my Texas LLC get a loan while not in good standing?
Expect the application to stall. Lenders verify franchise tax account status as routine diligence, and a flag or forfeiture on the record typically freezes underwriting until the state's records show the issue resolved. Loan files usually wait rather than die when the borrower is ahead of the problem with a specific fix underway, so the sequence that protects your financing is: confirm your stage, start the fix, and tell your lender exactly when the record will clear.
