The California Corporations code requires corporations and limited liability companies file initial and annual Statements of Information identifying the organization's management (directors, officers, managing members, etc.) and agent for service of process. The initial and annual fee for doing so is minimal ($20 or $25). However, the penalty for not filing the form in a timely manner is $250. The initial form must be filed with the Secretary of State within 90 days of filing your initial articles of incorporation or articles of organization. The annual form and fee is due annually during the calendar month of initial formation and the immediately prededing five calendar months.
Unfortunately, certain private companies have been soliciting business through mass mailings to corporations and limited liability companies with a solicitation similar to a Statement of Information that is required to be filed with the Secretary of State. These misleading solications are not official, and the companies that send them are in no way affiliated with the Secretary of State or any government agency.
If you read the solicitation carefully, you will notice that indicates that the company is requesting a fee (as much as $250.00) in exchange for you authorizing them to complete and file the official Statement of Information on your behalf. Given that the official form takes about five minutes to complete, these companies are essentially charging you hundreds of dollars for absolutely nothing. At best, the company will file your official statement for you and pay the $20 or $25 filing fee. At worst, they won't file the statement on your behalf and the Secretary of State will hit you with the $250 penalty for not filing your statement on time.
Do not fall for this scam. Please read any official looking solicitation very carefully before you write a check. Make sure that you are writing your check to the California Secretary of State and not some private company with a misleadingly official sounding name. The misleading solication that I recently reviewed required payments to "Business Filings". The Secretary of State's website has additional information and contact information for the California Attorney General so that you may file a complaint if you've been the victim of such a solicitation.
About The Author: Joe Sandbank is an attorney specializing in assisting business buyers, business owner/sellers, business brokers, and agents with legal matters pertaining to buying and selling businesses throughout California. Joe can be reached direct at 800-875-1480.
Watch for more blog posts / articles from me in the future!
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