When your client starts a business, complying with the Secretary of State and local agencies’ filing requirements is vital.
Compliance notifications — which would give you and your client status updates about registration timelines and filing procedures — help your clients avoid costly state penalty fees and potential lawsuits.
After working with your client to determine whether to register as a corporation, limited liability company, limited partnership, general partnership, or limited liability partnership, you’ll need to file appropriate Articles of Organization (for a corporation) or other documents related to the business entity.
Compliance notifications can help with this initial step by informing clients of the next steps after the articles have been filed — the next steps being busy-work you would most likely appreciate avoiding.
The California Secretary of State recommends consulting with legal counsel prior to submitting formation documents to the Secretary of State.
The office also notes that “[m]any corporation, limited liability company and limited partnership documents are returned for correction without being filed because of name issues, errors, omissions or misstatements contained in the proposed filings submitted to this office.”
As your business client’s legal counsel, you can help reduce the risk of returned documents and additional filing fees by providing compliance notifications.
These notices give you peace of mind knowing your clients are actively being informed of necessary items to ensure their business stays in good standing with the Secretary of State.
Another example of a compliance requirement arises if the state in which the business is registered in requires an announcement in the local newspaper.
These are called publication filings and are required in a handful of states.
Through our compliance notifications, your client can order a publication filing at a click of a button, all under your brand.
The risk of lawsuits is real.
Operating without proper licenses, and failing to inform the state of such basic information such as who is your registered agent, could mean your client incurs fines from the state or local government.
Moreover, your client may need to wait for a probationary period before resuming business operations.
Not following compliance requirements means a customer could sue your client for, among other claims, fraud.
A customer suing a company for fraud could recover the cost of the product or service provided, as well as damages—and this could be even greater for a class action suit.
If you are interested in how Legalinc can notify you and your clients when your entities fall out of good standing, schedule a demo with us today.