Business Law Journal

Understanding the Statement of Information Process:

The California Statement of Information is a simple annual filing that ensures accurate information about your company is on record with the state. Compliance with this filing allows the state to effectively communicate with your business regarding taxes and other official matters. The California Secretary of State's Business Programs Division (the “CA SOS”) facilitates the filing of the Statement of Information, which can be completed online at https://bizfileonline.sos.ca.gov/. As of July 2023, the filing fee to the CA SOS for the Statement is $20, with an additional $5 disclosure fee for corporations. While many clients choose to handle filing Statements of Information themselves, the AALRR business and tax team would be happy to assist you with preparation and filing and/or to consult on the required content.

Misleading Mail Solicitations:

Domestic and foreign corporations, as well as limited liability companies registered in California, are receiving deceptive mail solicitations disguised as official forms which are neither sent nor authorized by the CA SOS. These fraudulent mailings are designed to mimic official forms, coercing businesses into using non-governmental third parties to submit their filings instead of the CA SOS’ office and are often accompanied by threats of penalties, fines, suspension, or even business seizure. The fraudsters erroneously reference specific statutes or laws, thereby creating a false sense of urgency while implying legal consequences if the form is not promptly returned and often demand fees that are nearly ten times the required filing fee.

Identifying Deceptive Solicitations:

These solicitations often have names that resemble the CA SOS Business Programs Division, leading unsuspecting businesses to believe they are dealing with an official government entity. According to the law, these solicitations must explicitly state at the top, in 24-point font,

"THIS IS AN ADVERTISEMENT. THIS OFFER IS NOT BEING MADE BY, OR ON BEHALF OF, ANY GOVERNMENT AGENCY. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER."

However, many of these wrongful solicitations may use smaller font sizes or other manipulative tactics. Therefore, it's crucial to carefully scrutinize every solicitation received. Furthermore, many of these fraudulent mailings also include processing times and false confidentiality claims in an effort to legitimize their practices.

File Statements of Information Directly:

To avoid penalties and delays while meeting your business’ statutory obligation, it is important to file Statements of Information directly with the CA SOS Business Programs Division at  https://bizfileonline.sos.ca.gov/ This official online platform is the only authorized method for filing the required documents and in fact, most legitimate filings and fees are handled electronically, not through traditional mail. Furthermore, although these third-party services may offer to handle the filing process on your behalf, it's important to note that submitting fees and filings to these entities does not fulfill your legal obligation and does not absolve you of any liability relating to such obligations. By filing directly with the CA SOS, you ensure compliance and protect your business's interests.

Additional Considerations:

Apart from misleading solicitations, businesses should also be cautious of other deceptive practices including, but not limited to, the offering of services for the preparation of termination documents, corporate minutes, or fraudulent Certificates of Status, which similarly come with exorbitant fees and false claims. It is vital to exercise caution and thoroughly research the legitimacy of any such solicitations before engaging their services. Furthermore, while corporations are obligated to maintain records, books, and minutes of their proceedings, these internal documents are not filed with the CA SOS and are kept for organizational purposes only.

Conclusion:

Protecting your business from fraudulent practices is paramount. By familiarizing yourself with the correct filing process, recognizing the signs of deceptive solicitations, and seeking guidance from trusted legal professionals, you can safeguard your business's financial interests and maintain compliance with legal requirements. As always, the attorneys in AALRR’s Corporate, Business, and Tax practice are here to help with guidance and expertise to support you and your business.

This AALRR post is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. AALRR is not responsible for inadvertent errors that may occur in the publishing process. 

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