The Big California Corporate Filings Ripoff

When Equine Legal Solutions incorporates a business in California, the business' initial mailing address recorded with the California Secretary of State is typically Equine Legal Solutions' mailing address. As a result, we receive a number of credit card applications and other marketing material directed at new businesses. This deluge of targeted junk mail suggests the California Secretary of State sells contact information for newly incorporated businesses.

Now this fact is shocking enough, but it appears that some of the Secretary of State's best customers are scam artists. These scam artists ply their trade by sending out deceptive communications to newly incorporated businesses, implying that the businesses will suffer dire consequences if they don't complete the enclosed forms and send them back with a check. The envelopes bear important-sounding labels such as "Annual Minutes Requirement Statement" and "Avoid Penalties, Fines and Suspension." The companies listed in the return addresses have official-sounding names like "Compliance Services" "Corporate Compliance Center" and "Annual Review Board."

Inside, the forms ask you to list the names of all of your company's officers and directors, along with their contact information. (Considering the ethics of these scam artists and how they obtained your company's contact information in the first place, it seems probable that your officers' and directors' contact information will be sold to other direct marketers.) There are urgent-sounding calls to action, e.g., "Return this form no later than 3/2/09 to ensure time for processing" and "Remit Immediately!" And, the letters are sprinkled with California code references and some are imprinted with official-looking seals.

While it's true that every California corporation should keep minutes of its board and shareholder meetings, and every California corporation has to file a (very short) annual statement with the California Secretary of State, it's certainly not necessary to pay a scam artist to do it for you. Equine Legal Solutions is happy to send its clients a free template for meeting minutes. The Secretary of State's annual statement form is automatically mailed to every corporation, and if you misplace it, the form is also available online. Meanwhile, the ripoff artists want to charge you as much as $250.00 for something you can do for FREE.

Equine Legal Solutions has complained to the California Secretary of State about these practices, and received an unsatisfactory reply. One can only wonder whether the funds generated by renting the mailing lists of new corporations has outweighed the Secretary of State's interest in protecting the public...

Bottom line: if you receive communications that look like these or that ask you to write a check to any entity other than the Secretary of State, put them through the shredder:

Compliance%20Services%20EnvelopeAnnual%20Minutes%20Requirement%20StatementAnnual%20Minutes%20Compliance%20NoticeAnnual%20Review%20Board%20Statement%20of%20Information