What this is: A handy list of tips that will help you get your corporate filings from near miss to slam dunk.
What this means: Rejected? It’s often only a minor mistake. But that minor mistake could cost you in money lost and time wasted.
No one enjoys the feeling of rejection. In addition to hurt pride and the annoyance of having to do it all over again, corporate filing rejection can also mean long delays and wasted filing and expedited fees.
Even the most experienced filers can make mistakes in meeting corporate requirements, such as checking business name availability before filing. To help you avoid these kinds of missteps, we’ve compiled a list of the most common errors filers make that result in rejection.
The next time you’re ready to submit a document related to corporate registration and filings, take a few minutes to check whether or not you’re on a surefire path to approval.
Check Status and Be Aware of Prerequisites
Before submitting a filing on an existing entity (such as an amendment or dissolution), ensure the entity is in good standing. States will usually not accept filings on entities that are not. This includes handling any preliminary requirements, such as a tax clearance or annual report filing.
Make Sure the Name is Correct
Small punctuation and spelling errors in an entity’s name are easily avoidable causes for rejection. Make sure the name of the entity is consistent across supporting documents submitted with the filing or where the name is listed in other places in the documents. Proofread, proofread, proofread!
Verify Name Availability in Advance and Check Against State Requirements
State statutes often list which types of indicators (such as corporation or LLC) are allowed and words that cannot be used or require outside approval first, but sometimes it depends on administrative regulations or the judgement of the filing officer, as evidenced by Delaware’s new regulations. Every state has its own rules.
Some states, like Delaware, allow very similar names as long as they can be differentiated on the record. Other states, like California, use the ‘deceptively similar’ standard and will reject names if they appear to be too similar to an existing entity name, even if they don’t exactly match the existing entity’s name.
Our team provides expert handling and coordination of your merger and conversion filings. To learn more, visit our page on Mergers & Conversions.
Get an Authorized Signer to Sign the Right Way
Signatures are more complicated than you would think. Rules vary from state to state and according to the entity type and the filing being submitted.
Check the statutes to ensure you have the right company principal signing the form and verify what sort of signature is allowed. Most states accept scanned copies, but there are exceptions depending on the filing. Electronic ‘DocuSign’ signatures are gaining acceptability but are still not allowed by many jurisdictions.
When in doubt, err on the side of caution. If a document gets printed and rescanned multiple times, the quality can suffer. States will often reject documents if they think they will be unreadable once uploaded to their system. Best practice is to stick with standard black font and consider how many times a filing has been copied or rescanned.
Check That You Have the Most Current Version of the Right Form
This may seem obvious, but a common problem is submitting a form for the wrong entity type, such as submitting an amendment for an LLC on a form for a corporation. When dealing with filings that can combine multiple entity types, such as mergers and conversions, it can get tricky. Careful perusal to ensure you choose the right form is best.
For more complex transactions, such as a merger filing, pre-clearance can help ensure your filing is accepted when it really matters. While not available in every state, it can be an excellent option when you are faced with a situation where you are unsure whether the document will be considered acceptable. Typically, you submit an unsigned copy of the document, requesting pre-clearance with the appropriate fee. A filing officer will review the document and indicate whether there are any problems that would cause them to reject it. Be aware, however, that this review does not always include verifying whether a chosen name is available or the company listed in the filing is in good standing.
Click here for the downloadable chart 7 Surefire Paths to Corporate Filing Approval.
What types of signatures are acceptable on corporate documents? Does every state recognize digital signatures?
There are several complexities that make the document signature a common cause of filing rejection. You need to take a close look at the different ways to sign a document and identify document signers, and how these factors impact document acceptability as determined by a state’s filing office. For more info, you can read Getting Document Signatures Right: It’s Not as Easy as You Think!
What documents in New York require specific signatures?
When drawing up documents for filing in New York, it’s important that all the elements required by the relevant section of that particular law be present to help avoid filing rejection. Items like Certificates of Incorporation, Articles of Organization and Certificates of Amendments all need specific signers. You can find out more at Signature Requirements on Corporate and Other Documents in New York.
Are there any uncommon reasons states reject corporate filings?
Sometimes it’s the small things that trip you up. Things like the payment check for the filings made payable to the wrong division, or the stock amount indicated on the supporting documents from the domestic state does not match what is indicated on the qualification document. Read about these and other pitfalls in this article: Top 10 Reasons Why Corporate Filings Are Rejected by State Filing Offices.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.