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!
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area
Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services
Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.
|Brad Steinberg, Broker - Laundromat Specialists
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
|Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses
Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.
|Helen Yoo: Escrow & Bulk Sale Services - Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Diane Boudreau-Tschetter: Escrow And Bulk Sale Services
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
|Ranvir S. Sandhu, Esq. - Legal Services For Buyers And Sellers
I've worked at top Bay Area law firms and have extensive experience with business entity formation, mergers, dissolutions, conversions, employment matters, including experience in reviewing and negotiating transactional documents such as leases and purchase agreements.
|Joe Sandbank, Esq. - Legal Services
I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.
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