CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Get Educated and Don’t Fall for Corporate Compliance Scams!

By: Terri Lennon, COGENCY GLOBAL INC. on Mon, Jun 23, 2014

Beware of misleading compliance solicitations and scam notifications that are rampantly circulating via the United States mail in at least 37 states!  These scams may be harmless in nature, but can cost companies hundreds of dollars in fees that are not required by state statute. 

What is a misleading compliance solicitation?
Misleading compliance solicitations are letters mailed by private companies unaffiliated with state or federal government agencies. The letters appear official in nature and give the impression that the targeted company owes some type of filing to the Secretary of State.

The notices are commonly labeled as an “Annual Corporate Records Form” or “Annual Minutes Form” and can easily be confused with official report notices, such as annual report reminders, sent out by state agencies throughout the U.S.

The image below is an excerpt from the Annual Minutes Form solicitation circulating in the state of Florida. The language used on the notice manipulates language taken from a section of the Florida Corporations Act. This state law requires corporations to keep minutes of its shareholder or board meetings, however, the state does not require corporations to record/send a copy of the minutes to the state.

 

 

Compliance Scam

 

How do I know if it’s a scam?
When reviewing any report notice, it is important to read the fine print in detail. Two indications that you have received a misleading solicitation are phrases such as:

  • “This product has not been approved or endorsed by any government agency and this offer is not being made by an agency of the government."

  • “Corporate Records Services is not a government agency and does not have or contract with any government agency to provide this service.”

Not every scam notice has this disclaimer, which is why COGENCY GLOBAL actively maintains a comprehensive list and samples of these solicitations notices. If you receive a document and are unsure of its origin, please visit the Misleading Annual Report and Compliance Solicitations page of our website and compare it to the ones we have listed.

What happens if you were scammed?
COGENCY GLOBAL INC. has received positive feedback from our clients who have reached out to the corporations divisions in various states. The state filing offices have been helpful in assisting victims of these scams in obtaining a refund of the fees paid.

Please reach out to us if you are unable to determine the legitimacy of a notice and do not see it listed on our website. Simply send an email to info@cogencyglobal.com with a copy of the solicitation attached. We will happily review the document and confirm its authenticity. Hopefully, by being more aware of what to look for, you won’t fall for these kinds of scams.

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Delaware Corporate, UCC and Compliance, Annual Report Compliance