What Texas Form 05-359 Is For
Texas Form 05-359 is used to request a Certificate of Account Status from the Texas Comptroller of Public Accounts. This certificate confirms that a business has satisfied all franchise taxes and submitted all required tax reports before ending its legal or registration status in the State of Texas.
Business owners must obtain this certificate before the Texas Secretary of State will accept termination or withdrawal filings. The certificate serves as tax clearance, verifying that the entity has no outstanding franchise tax liabilities, missing filings, or unresolved tax accounts.
This form applies to limited liability companies, corporations, limited liability partnerships, and other taxable entities that are formed in Texas or registered to do business in Texas. It does not address federal tax obligations, sales and use tax, or other tax programs managed outside the franchise tax system.
When You’d Use Texas Form 05-359
A business owner files Form 05-359 when permanently closing a Texas entity or withdrawing a foreign entity’s registration. This typically occurs after business operations end and all required tax filings have been completed.
Typical situations include voluntary closure, administrative dissolution cleanup, mergers, or winding down a business that no longer generates total revenue. The form is also required when an entity wants to end its franchise tax filing responsibility as part of a combined or tiered partnership structure.
Form 05-359 must be filed after all Franchise Tax Reports, Public Information Reports, Ownership Information Reports, or Tiered Partnership Reports are submitted. It must be requested before filing termination forms such as Form 651, Form 612, Form 205, or Form 304 with the Texas Secretary of State.
Key Rules or Details for 2021
Texas Form 05-359 requires all franchise tax filings and tax payments to be fully current before the Texas Comptroller of Public Accounts will issue a Certificate of Account Status. The final Franchise Tax Report must follow the 60-day rule, covering activity up to the date business operations ended.
The certificate is valid only through December 31 of the year issued and must be filed with the Texas Secretary of State before it expires. The form applies only to franchise tax compliance and does not resolve sales tax, use tax, federal tax obligations, or other tax accounts held with the State of Texas.
Step-by-Step (High Level)
Terminating a Texas entity follows a specific order that must be completed correctly.
- Review the Franchise Tax Account Status to confirm that all tax reports and tax payments are current.
- File all required annual Franchise Tax Reports for prior tax years.
- Submit the final Franchise Tax Report covering the period up to business closure.
- File the required Public Information Report or Ownership Information Report, if applicable.
- Request the Certificate of Account Status by submitting Form 05-359 through Webfile or by mail.
- Receive Form 05-305, which serves as the tax clearance certificate.
- File termination or withdrawal documents with the Texas Secretary of State and pay the applicable filing fee.
After approval, the entity’s legal status with the State of Texas ends, although the Employer Identification Number and historical tax filings remain on record.
Common Mistakes and How to Avoid Them
- Requesting the certificate before filing the final Franchise Tax Report: File all required franchise tax reports first so the Comptroller can issue the certificate.
- Using the wrong accounting period on the final report: Apply the 60-day rule and confirm the final report period matches the termination facts to avoid rejected requests.
- Submitting electronically when paper filing is required: Confirm whether the entity must file by mail and use the correct submission method to prevent resubmission delays.
- Letting the certificate expire on December 31 before filing with the Secretary of State: Coordinate timing so the Secretary of State filing is completed before year-end.
- Confusing Form 05-359 with Form 05-391: Use Form 05-359 for termination clearance, and use Form 05-391 for reinstatement after forfeiture.
What Happens After You File
After submission, the Texas Comptroller reviews the entity’s franchise tax filings, tax reports, and tax payment history to confirm compliance. If filed through the franchise tax Webfile and no issues exist, the Certificate of Account Status may be issued immediately.
Once issued, the certificate must be submitted to the Texas Secretary of State, along with the appropriate termination or withdrawal form and the filing fee. After approval, the entity’s legal status under the Business Organizations Code comes to an end, although prior tax filings remain on record.
FAQs
Who must file Texas Form 05-359?
Any taxable entity ending its legal existence or registration in Texas must file this form, including Texas LLCs, corporations, and limited liability partnerships.
Is there a filing fee for Form 05-359?
The Texas Comptroller charges no filing fee. Filing fees apply only when submitting termination documents to the Secretary of State.
What if the certificate expires?
An expired certificate cannot be used. A new request must be submitted, and all tax filings must still be current.
Can this form be used for reinstatement?
No, reinstatement requires Form 05-391 and a separate Tax Clearance Letter Request for Reinstatement.
Does the certificate affect federal tax obligations?
No, federal tax filings, including Form SS-4 matters, are handled separately and are not affected by this certificate.
