[Updated] Delaware Secretary of State Division of Corporations Office To Be Closed for Computer System Upgrade

September 3rd to September 8th

The Delaware Secretary of State will close on Thursday, September 3rd at 4:30 pm EST, will be closed on Friday, September 4th and will not reopen until Tuesday, September 8th at 8:00 am EST due to the new DCIS system (ICIS) being implemented.

  • Thursday, September 3rd – All priority services will be discontinued at 12:00 pm EST.
  • Thursday, September 3rd – No filings or searches can be processed after 4:30 pm EST.

September 8th to September 11th

  • The Delaware Secretary of State will only be open from 8:00 am to 5:00 pm EST from Tuesday, September 8th through Friday, September 11th.
  • One Hour, Two Hour, and Same Day filings must be submitted to FCS by 11:30 am EST.
  • No searches or certificates can be obtained after 5:00 pm EST. Although filings can be submitted until 5:00 pm EST, filings that need to be dated with the submission day’s date must be submitted to FCS no later than 2:30 pm EST.
  • No file dates will be secure after the planned closure at 5:00 pm EST on each of these days.

The upgrade to its imaging, workflow and data systems will allow enhanced services and products and be its first major overhaul since 1989. You can read what is posted on the Delaware Secretary of State’s website regarding the computer system conversion here. If you have any questions, please feel free to contact us at 800.406.1577.

The Rise Of Merchant Cash Advancers

The Merchant Cash Advance market continues to rise and this week we take a closer look at it.

A merchant cash advance started as lump sum payments to businesses in exchange for a percentage of future credit card/debit card transactions. It’s a way for businesses to gain cash quickly while also structuring a relatively short-term payment plan. Businesses which perhaps met some difficulties accessing capital in the traditional avenues afforded businesses began flocking to this method as the events of 2008 and their aftermath unfolded to help fuel this development. One view of the industry’s advantages to businesses is explored here.

As the industry has evolved, the question of regulations to oversee the transactions has cropped up, and there are various opinions. One perspective on this, among other things, is shared here by Sean Murray, the founder of deBanked and a 9-year veteran of the merchant cash advance industry.

Also, some legal concerns have been brought up and are discussed here by Andrew Hayner, an attorney with Jaffe, Raitt, Heuer & Weiss, P.C.  . Of the key concerns Mr. Hayner notes, the key ones revolve around the length of the contract the structuring of the deal to make sure it is done as a purchase and not a loan. As Mr. Hayner writes, “The most important legal concern for MCA businesses is structuring the transaction as a sale rather than a loan.”

 What do you know about the rise of the Merchant Cash Advance industry? Please share your thoughts and insights below.

 

3 Tips for Avoiding Rejection of Articles of Incorporation

In most states, filing articles of incorporation (or organization) is a simple process —document filers fill out a form, collect a signature and send the document off to be filed. Corporate filings get rejected often, however, and it is usually for errors that are easy to catch. Here are three easy tips to help guard against rejection of your business formation filings.

Check Name Availability
A new business must have a unique name. If your chosen name is the same or deceptively similar to an existing entity, the state filing office will reject your document. To assist you in choosing a unique name, most states will allow you to check the availability of the name you wish to use prior to submitting your paperwork. Then, if the name is available, you can reserve it for your exclusive use. Please refer to our previous blog post, “Why Reserve your Business Name?” for more information on name reservations.

Aim to Meet the Minimum Requirements
Another best practice is to aim to satisfy the minimum requirements for filing formation documents without elaborating or providing additional information. In some cases, providing too much information can be a cause for rejection. For example, while some states require officer and director information to be included in the articles, others will reject for its inclusion on the basis that the proper way to communicate officers and directors is on the statement of information or annual report form.

Follow Conventional Standards
If the state provides a fillable form for the type of document your need to file, read the instructions carefully. For some filing types, however, there are no special forms; some require filers to create their own formation document according to certain specifications. If this is the case, look to the state’s website for a sample of a drafted document. Don’t get too creative here. Whenever possible, draft your document using the same verbiage as the sample as many states have required statements that must be included verbatim to avoid rejection.

First Corporate Solutions customers work with a designated Account Manager with expertise in the filing of business entity documents. Our filing experts can provide you with the appropriate form or sample document and offer guidance on subsequent filing requirements.

*Disclaimer

[Important] Delaware SOS Website To Be Closed For Major Conversion

The Delaware Secretary of State will close on Thursday, September 3rd at 4:30 pm and will not reopen until Tuesday, September 8th due to the new DCIS system (ICIS) being implemented.  The upgrade to its imaging, workflow and data systems will allow enhanced services and products and be its first major overhaul since 1989. You can read what is posted on the Delaware Secretary of State’s website regarding the computer system conversion here.

All priority filings must be submitted to the Secretary of State by noon on Thursday, September 3rd.   Any corporate filing submitted after that time can receive a back file date which will be considered as an extraordinary event by the Secretary of State.

Important Update:

The Delaware Secretary of State  will close at 5:00 pm from Tuesday, September 8th through Friday, September 11th.  One Hour, Two Hour, and Same Day filings must be submitted to FCS by 11:30 am EST.  No searches or certificates can be obtained after 5:00 pm EST. Although filings can be submitted until 5:00 pm EST, filings that need to be dated with the submission day’s date must be submitted to FCS no later than 2:30 pm EST.  No file dates will be secure after the planned closure at 5:00 pm EST on each of these days.

The First Corporate Solutions Delaware branch office will be open those days except for Labor Day, Monday, September 7th.   Please feel free to contact the Delaware branch at 800.406.1577 with any questions.

*Disclaimer

Tax Liens & UCCs Often Maintained In Separate Indexes

Depending on the specific state where you are conducting your lien search, tax lien records can often be maintained in separate indexes from UCCs. Sometimes these separate indexes can be found within the Secretary of States themselves, like in Illinois where the SOS maintains a separate index for UCCs and a separate index for Federal tax liens; searching only the UCC index will not reveal Federal tax liens of record.

Other times these separate indexes can be found in other filing offices like the county recorder or the courts. In these instances, and they are not uncommon, a search for only UCCs at the SOS will not reveal tax liens of record.

To uncover all the lien types that could affect your security interest, be sure to search in all of the appropriate filing offices based on each state’s filing criteria.

Consider partnering with a public records research company like First Corporate Solutions to assist your lien searching efforts and perfect your security interests successfully.

*Disclaimer

 

Interpleader: What Is It And Why Is It An Effective Remedy In An Escrow Holder’s Arsenal? – Part II

This week we introduce guest blogger and attorney Shelley Gould from the Law Offices of David B. Bloom. She delves into what an interpleader action is and how escrow officers can utilize this tool and why. Today’s post is the second and final part of the article.

BENEFITS OF FILING AN INTERPLEADER ACTION

There are multiple benefits to instituting an interpleader action. Many times escrow hasn’t closed and the Escrow holder is faced with parties in dispute and occasionally an allegation is made that the Escrow holder hasn’t performed his/her duties. Escrow can deposit the escrow funds into Court and obtain a discharge and release from further liability in connection with the escrow account and the parties. The purpose is to give Escrow protection and limit litigation expenses.

Once an interpleader action is filed, any claims the parties believe they have as to Escrow, cannot be pled as a cross complaint and must be brought as a separate action. Conner v. Bank of Bakersfield (1920) 183 Cal.199, 203

Escrow owes no duty to resolve a dispute between buyer, seller and broker as to the ownership of the deposited money in lieu of filing an interpleader action. Interpleader prevents the stakeholder [Escrow] from being obliged to determine at his/her peril which claimant has the better claim. Lee v. West Coast Life Insurance, (2012) 688 F 3d. 1004, 1009. Moreover, Escrow does not need to wait an indefinite time before filing an interpleader action. Security Trust & Savings Bank v. Carlsen, (1928) 205 Cal. 309, 316.

California’s Department of Business Oversight has reporting requirements for annual audits which under Title 10 of California Code of Regulations, Regulation 1741.5(7)(C)(i) states that part of the audit procedure shall include a review of the schedule of escrow liability as of the last audit for dormant files and verify that “funds in dormant files that no longer are on the schedule of escrow liability were properly disbursed according to signed instructions or according to the instructions of a court of competent jurisdiction, were interpleaded to a court of competent jurisdiction, or were escheated to the State of California.”

The interpleader action provides the disputing claimants with a forum to obtain a court determination of their respective rights to the fund and other claims that they may have against each other.

In some situations, the Escrow holder can petition for instructions in the interpleader litigation if further monies are received from third parties or an immediate request for guidance is warranted. This can become an issue, for example, when the Board of Equalization releases money being held that was paid by Seller before escrow opened.

Finally from a financial viewpoint, the interpleading party [Escrow] can request the Court to award its reasonable attorney’s fees and costs which may be paid from the amount in dispute which has been deposited into Court. Code of Civil Procedure §386.6. The Court has discretion to lower the fees requested but some law firms may agree as part of their ongoing representation of its escrow client to look only to the court awarded compensation for its fees.

INTERPLEADER PROCESS

The interpleader action is initiated by a verified complaint or cross-complaint. There are two distinct stages of an interpleader action. The first stage is the filing of the complaint and the depositing of the money and/or documents into Court. After the parties have been served, a claimant can answer and set forth his claim of ownership to the fund and any claims he may have against the other adverse claimants disclaim his interest in the fund or allow his default to be entered. Then the Court determines whether the requirements of the statutory interpleader action have been met – a single fund at issue and adverse claimants to the fund. Once the requirements are met, the interpleading party can obtain an Order for Discharge and dismissal from the litigation.

The Order for Discharge is typically obtained by filing a motion. In the Motion for Discharge, request is made to pay the attorney’s fees that have been incurred and court costs from the monies on deposit. The amount of attorney’s fees is left to the discretion of the Court. At the same time, request is made to pay any cancellation fee due Escrow. If the motion is granted, the Order must specify the name of the party to be paid, the address where the check is to be mailed and the amount of each payment. Disbursement is made by the County Auditor on receipt of a certified copy of the court order.

The case continues with the claimants but without Escrow which is the second stage. During this stage, the Court will then determine the issue of ownership between the remaining claimants. The Court may also determine which claimant will be charged with the costs and attorney fees that were incurred by the discharged party.

It should be pointed out that as a matter of jurisdiction, interpleader actions of small escrow deposits of $5,000.00 can only be filed as a limited matter in the superior court and legally may not be brought as a small claims action. Code of Civil Procedure §§86 (a)(2), 116.220(a)(5)

Despite this, there may be instances where Escrow is erroneously named as a party and if there is no objection or the Court allows it, the matter will be decided in a small claims action.

In summary, escrow officers should look to the interpleader remedy when parties to the escrow cannot resolve their own differences. By Shelley M. Gould, Esq., LAW OFFICES OF DAVID B. BLOOM, APC

Disclaimer:

The information in this blog is provided for general informational purposes only and is not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information provided may not apply to any specific factual and/or legal set of circumstances. No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.

Interpleader:  What Is It And Why Is It An Effective Remedy In An Escrow Holder’s Arsenal? – Part I

This week we introduce guest blogger and attorney Shelley Gould from the Law Offices of David B. Bloom. She delves into what an interpleader action is and how escrow officers can utilize this tool and why. Today’s post is the first of two parts; part 2 will be posted in next week’s blog. Please share your thoughts below.

Interpleader clauses can be found in the general provisions of standard escrow instructions for the sale of a business and the purchase of real estate. It is an under- utilized remedy because of a lack of understanding of what it is and how interpleader actions can be used by escrow companies for their own legal protection.

Interpleader is defined as an equitable remedy now governed by statute, whereby a holder of money such as an escrow deposits funds or property with the Court. The purpose is to avoid liability to double or multiple claimants or potential claimants to the same funds or property,  and/or to otherwise allow the Court to determine the conflicting parties’ respective claims to the monies or property. The governing statute for an interpleader action is California Code of Civil Procedure §386 et seq.

The elements of an interpleader action are set forth in Code of Civil Procedure §386; which provides that:

1) The party bringing or the interpleader may be any person, firm, corporation, association or other entity against whom double or multiple claims are made or may be made, by two or more persons which are such that may give rise to double or multiple liability.

2) The claims or assertion of titles need not have a common origin nor be identical but must be adverse to and independent of one another.

3) Or the claims are un-liquidated and no liability on the part of the party bringing the action has arisen. Collusion, bad faith or inequitable conduct by the interpleading party which create the controversy may be a defense to an interpleader action. The claims to the fund may be potential and not even asserted, but cannot be wholly speculative.

4) The party bringing the action has no interest in the money or property claimed, or no interest in a portion of the money or property, and alleges that all or such portion is demanded by the other parties to the action. [Escrow’s cancellation fee may be claimed as part of the interplead funds]

5) The party bringing the action may deny liability in whole or in part to any or all of the claimants.

Resort to an interpleader action can arise other than in the escrow context which is outside the scope of this article. However, the most typical circumstance for an escrow officer which may lead to an interpleader is when a “dispute” arises between buyer and seller and one party informs Escrow in writing to cancel, but parties do not sign mutual cancellation instructions. A common scenario is: Buyer states that Seller misrepresented the yearly income generated by the business and makes demand to cancel. Seller doesn’t want to cancel and refuses to sign cancellation instructions.

Another common circumstance is when conflicting demands are made on Escrow. A typical example is: Buyer decides he doesn’t want to go through with a real estate purchase and makes demand on Escrow

to cancel and return his deposit. Seller doesn’t want to cancel and wants to retain Buyer’s deposit pursuant to a liquidated damages provision. Seller’s attorney demands that deposit be turned over to him.

Finally an interpleader action may result when Escrow risks liability to each of the parties. This may arise when the parties to escrow are arguing but can’t resolve their differences and blame Escrow for not closing. For example, Buyer tells Escrow to cancel, but he only will pay 1/2 of the escrow’s fees. Seller refuses to pay his half of the fees incurred, and doesn’t want Escrow to release Buyer’s deposit.

Stay tuned for part 2 next week.

Disclaimer:

The information in this blog is provided for general informational purposes only and is not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information provided may not apply to any specific factual and/or legal set of circumstances. No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.

 

 

When Is My Annual Report Due?

Last week’s blog post discussed why you need to file an annual report for your entity. This week we’re providing you a chart detailing when Annual Reports are expected to be filed in all 50 States. Check it out below.

Part I

State Foreign Corp Domestic Corp. Foreign NP Corp Domestic NP Corp
Alabama 2.5 Months 2.5 Months Not required Not required
Alaska Jan. 2nd Jan. 2nd July 2nd July 2nd.
Arizona Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Arkansas May 1st May 1st Aug. 1st Aug. 1st
California Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month     (end)
Colorado End of 2nd Month after Anniversary End of 2nd Month after Anniversary End of 2nd Month after Anniversary End of 2nd Month after Anniversary
Connecticut Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
Delaware June 30th March 1st March 1st March 1st
District of Columbia April 1st April 1st April 1st April 1st
Florida May 1st May 1st May 1st May 1st
Georgia April 1st April 1st April 1st April 1st
Hawaii Anniversary Quarter Anniversary Quarter Anniversary Quarter Anniversary Quarter
Idaho Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
Illinois Month Previous to Anniversary Month Previous to Anniversary Month Previous to Anniversary Month Previous to Anniversary
Indiana Anniversary Month Anniversary Month Anniversary Month Anniversary Month
Iowa March 31st March 31st March 31st March 31st
Kansas 3.5 Months 3.5 Months 5.5 Months 5.5 Months
Kentucky June 30th June 30th June 30th June 30th
Louisiana Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Louisiana Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Maine June 1st June 1st June 1st June 1st
Maryland April 15th April 15th April 15th April 15th
Massachusetts 2.5 Months 2.5 Months Nov. 1st Nov. 1st
Michigan May 15th May 15th Oct. 1st Oct. 1st
Minnesota Dec. 31st Dec. 31st Not required Dec. 31st
Mississippi April 15th April 15th Not required Not required
Missouri End of 3rd Month, after Anniv. End of 3rd Month, after Anniv. Aug. 31st Aug. 31st
Montana April 15th April 15th April 15th April 15th
Nebraska March 1st March 1st April 1st April 1st
Nevada Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
New Hampshire April 1st April 1st Dec. 31st (every 5 years) Dec. 31st (every 5 years)
New Jersey Anniversary Month (end) Anniversary Month (end) Not required Not required
New Mexico 2.5 Months 2.5 Months 4.5 Months 4.5 Months
New York Anniversary Month Anniversary Month Not required Not required
North Carolina April 15th April 15th Not required Not required
North Dakota May 15th Aug. 1st Feb. 1st Feb. 1st
Ohio Not required Not required Not required Not required
Oklahoma Anniversary Date Not required Not required Not required
Oregon Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Pennsylvania Not required Not required Dec. 31st Dec. 31st
Rhode Island March 1st March 1st June 30th June 30th
South Carolina 2.5 Months 2.5 Months Not required Not required
South Dakota Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Tennessee 3 Months 3 Months 3 Months 3 Months
Texas Not required Not required Not required Not required
Utah Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Vermont 2.5 Months 2.5 Months 2.5 Months 2.5 Months
Virginia Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
Washington Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
West Virginia July 1st July 1st July 1st July 1st
Wisconsin March 31st Anniversary Quarter March 31st Anniversary Quarter
Wyoming Anniversary Month Anniversary Month Anniversary Month Anniversary Month

Part II

State Foreign LLC Domestic LLC Foreign LP Domestic LP
Alabama 3.5 Months 3.5 Months 3.5 Months 3.5 Months
Alaska Jan. 2nd Jan. 2nd Jan. 2nd Jan. 2nd
Arizona Not required Not required Not required Not required
Arkansas May 1st May 1st May 1st May 1st
California Anniversary Month (end) Anniversary Month (end) Not required Not required
Colorado End of 2nd Month after Anniversary End of 2nd Month after Anniversary End of 2nd Month after Anniversary End of 2nd Month after Anniversary
Connecticut Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
Delaware June 1st June 1st June 1st June 1st
District of Columbia April 1st April 1st April 1st April 1st
Florida May 1st May 1st May 1st May 1st
Georgia April 1st April 1st April 1st April 1st
Hawaii Anniversary Quarter Anniversary Quarter Anniversary Quarter Anniversary Quarter
Idaho Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
Illinois Month Previous to Anniversary Month Previous to Anniversary Month Previous to Anniversary Month Previous to Anniversary
Indiana Anniversary Month Anniversary Month Not required Not required
Iowa March 31st March 31st March 31st March 31st
Kansas 3.5 Months 3.5 Months 3.5 Months 3.5 Months
Kentucky June 30th June 30th Not required Not required
Louisiana Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Louisiana Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Maine June 1st June 1st June 1st June 1st
Maryland April 15th April 15th April 15th April 15th
Massachusetts Anniversary Date Anniversary Date Not required Not required
Michigan Feb. 15th Feb. 15th Not required Not required
Minnesota Dec. 31st Dec. 31st Dec. 31st Dec. 31st
Mississippi April 15th April 15th Not required Not required
Missouri Not required Not required Not required Not required
Montana April 15th April 15th Not required Not required
Nebraska April 1st April 1st Not required Not required
Nevada Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
New Hampshire April 1st April 1st Not required Not required
New Jersey Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
New Mexico Not required Not required Not required Not required
New York Anniversary Month Anniversary Month Not required Not required
North Carolina April 15th April 15th Not required Not required
North Dakota Nov. 15th Nov. 15th April 1st April 1st
Ohio Not required Not required Not required Not required
Oklahoma July 1st July 1st July 1st July 1st
Oregon Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Pennsylvania Not required Not required Not required Not required
Rhode Island Nov. 1st Nov. 1st Not required Not required
South Carolina Not required Not required Not required Not required
South Dakota Anniversary Date Anniversary Date Not required Not required
Tennessee 3 Months 3 Months 3 Months 3 Months
Texas Not required Not required Within 30 days of first notice Within 30 days of first notice
Utah Anniversary Date Anniversary Date Anniversary Date Anniversary Date
Vermont 2.5 Months 2.5 Months 2.5 Months 2.5 Months
Virginia Anniversary Month (end) Anniversary Month (end) Not required Not required
Washington Anniversary Month (end) Anniversary Month (end) Anniversary Month (end) Anniversary Month (end)
West Virginia April 1st April 1st July 1st July 1st
Wisconsin March 31st Anniversary Quarter Not required Not required
Wyoming Anniversary Month Anniversary Month Anniversary Month Anniversary Month

First Corporate Solutions offers Annual Report Management! Never forget to file your Annual Report by appointing us as your Registered Agent today! Email us at info@ficoso.com for more information!

*Disclaimer

Why Do I Need to File an Annual Report for My Entity?

The Secretary of State requires each company organized or incorporated within the State of North Carolina to file an Annual Report as a means of keeping the Secretary of State updated with registered agents, addresses, officers, directors, members and managers.  It is especially important to make necessary changes to addresses and registered agents on the Annual Report to assure that the Secretary of State notifies your company of issues surrounding any filings, including the filing of any lawsuit naming your company as a party.  If the Secretary of State cannot find your company because the address has not been updated, you run the risk of not knowing that such a lawsuit has been filed.

If you do not file the Annual Report in a timely manner, then the Secretary of State can administratively dissolve your company and/or issue penalty fees. Every state has different guidelines but if you fail to file your annual report your company is at risk of no longer being in good standing with the State (though it may still be sued).  If your company is no longer in good standing, company business may be slowed and negatively impacted because potential creditors or buyers may refuse to do business with a company that is not in good standing.

First Corporate Solutions offers Annual Report Management! Never forget to file your Annual Report by appointing us as your Registered Agent today!

*Disclaimer

UCC Paper Filings No Longer Accepted by New Jersey Secretary of State Effective July 1, 2015

Effective July 1, 2015, the state of New Jersey will no longer allow for UCC paper filings and electronic filings will be required. In addition to this change, it is important to note that establishing priority will be an issue as UCC filings will no longer be stamped with the time at which the filing was accepted.

Further changes to the UCC process in the state of New Jersey regarding collateral and secured party naming to perfect a security interest are succinctly recapped here for your review http://www.natlawreview.com/article/amendment-to-new-jersey-uniform-commercial-code.

*Disclaimer

What If I Don’t Assign a Registered Agent for My Entity?

A business that does not select a registered agent may risk falling out of “good standing” with the state in which it is registered. Penalties can include license revocation, fines, and the inability to enter into legal contracts and/or gain access to the state court system. Also, reinstatement proceedings could include further civil penalties and possibly criminal sanctions as well. If you try to file without a registered agent your filing will be rejected which can be more costly to you. Your filing could also be rejected in the following states if you do not get consent from your registered agent and present it to the state at the time of filing:
  • Arizona
  • Colorado
  • DC
  • Florida
  • Hawaii
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Mississippi
  • Montana
  • Nevada
  • New Mexico
  • North Dakota
  • Utah
  • Washington
  • Wyoming
It is required by almost every state to have a registered agent for your company (exception: New York). Feel free to leave a comment if you need help finding a reputable registered agent service company.

First Corporate Solutions Releases Kansas, Montana, North Dakota, South Dakota and Nebraska for Online UCC Searching

First Corporate Solutions is pleased to announce the addition of Kansas, Montana, North Dakota, South Dakota and Nebraska UCC data and document images to our UCC library of states, available July 1st, 2015. Enjoy consistent search logic, advanced search tools, comprehensive report options, clear document images and a supporting portfolio to save and later retrieve your search reports and document images at no cost any time in the future.

Log in today to see the benefits in action!

Not an FCS online user? Schedule a demo of our UCC searching, filing and monitoring system today!

* Additional fees may apply

*Disclaimer

Can I Be My Own Registered Agent or Have a Family Member Be My Registered Agent?

The short answer to this question is Yes, but perhaps it is not the best answer. While it is usually possible in most states to legally serve as your own registered agent (or appoint a friend/family member), it is advisable to designate a third-party to perform this important role.

By having someone else responsible for the receipt of your legal and tax documents, you can have the peace of mind that someone will always be available to receive such important information. This means you can leave the office freely, go on vacation, etc., without having to worry about missing any critical tax or legal correspondence. If you or your family member happened to be out of the office or away for any extended period when your important documents were delivered and needed your attention, then you run the risk of your entity falling out of good standing in the state in which it is registered. Feel free to leave a comment if you need help finding a reputable registered agent service company.

*Disclaimer

What Does Your Registered Agent Do For You And Why Do You Need One?

If you do not reside in a state where your entity is qualified to do business, then most states require you to have a registered agent* to accept documents on your behalf. The state where your entity is registered needs to know they have a contact person for your business at all times (PO Box is not an acceptable address for registered agents).

Your registered agent is responsible for receiving important tax and legal documents, such as service of process (SOP) when a business entity is a party in a legal action like a lawsuit. Your agent also receives important mail sent by the state (annual reports or statements). Having a registered agent is very beneficial because they are required to forward all documents and notices to the corporation, which can put you at ease knowing you won’t miss something important that may need your immediate attention. A corporation or LLC that fails to name a registered agent risks losing its legal status within that state as well as incurring penalties depending on the state. Not having an agent can also have unfortunate legal ramifications if by chance your business is sued in the state where it fails to maintain a registered agent.

Make sure you don’t miss important information regarding your business and consider appointing First Corporate Solutions as your agent here.

*It is optional in New York to appoint a registered agent.

*Disclaimer

IRS Disables Online ‘Get Transcript’ Capability Due to Data Breach

In an IRS statement last updated May 27, 2015, the IRS revealed “that criminals used taxpayer-specific data acquired from non-IRS sources to gain unauthorized access to information on approximately 100,000 tax accounts through IRS’ “Get Transcript” application. This data included Social Security information, date of birth and street address.” You can read the IRS’s full statement here.

In response to this incident, the IRS has disabled its online ‘Get Transcript’ application until further notice. still acquire IRS transcripts by mail by going here and following the directions given. “You can get a transcript by mail to view your tax account transactions or line-by-line tax return information for a specific tax year. The method you used to file your return and whether you have a refund or balance due, affects your current year transcript availability. Note: If you need a photocopy of your return, you must use Form 4506. To use Get Transcript by Mail, you need your Social Security number (SSN) or your Individual Tax Identification Number (ITIN), date of birth, and address from your latest tax return.”

From the IRS website definition, a tax account transcript shows any changes either you or the IRS made to your tax return after you filed it; this transcript includes your marital status, the type of return you filed, your adjusted gross income and taxable income. A tax return transcript shows most line items from the tax return you originally filed; it also includes items from any accompanying forms and schedules you filed but it does not reflect any changes made after you filed your original return.

The different types of transcripts and a brief description of each can be found here.

Do you rely on IRS tax account transcripts? How do you retrieve them? Will this shut down affect your due diligence processes? Share your thoughts below.

*Disclaimer

Where Should You File Your UCC?

That’s a good question, and revisions to Article 9 of the Uniform Commercial Code over the years has looked to clarify the answer.

It comes down to determining the business entities’ State of Organization and the State of Residence for individuals. Revised Article 9 sets forth that UCC Financing Statements filed against business entities are to be filed in their state of organization. UCCs filed against individuals must be filed in their state of residence, as defined by their driver’s license or state issued identification. In some circumstances this may necessitate filing in a business entity’s state or organization and in an individual’s state of residence, as well as the state where the business assets are located.

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Three Top Reasons Why Public Records Research is Essential for an Asset-Based Lender’s Due Diligence Process

In our continued focus on the importance of public records research to a secured party’s security interest perfection process, today we list three of the main reasons. So why is public records research essential to an Asset-based lender’s due diligence processes?

1. To determine priority before filing

A public records search uncovers pre-existing liens (like Federal and State tax liens, Judgment liens and UCCs) which can prevent the perfection of a security interest. You can learn more about it here:

2. To assure maintenance of an already perfected security interest

Periodic update searches reveal public record events of note that can potentially prime a perfected security interest, from lien filings to changes in business entity names or jurisdictions to a loss of Good Standing. You can read more about it here:

3. To determine if a client or potential debtor is in Good Standing with the state agencies. You can read more about it here.

If you are interesting in a lien monitoring solutions, feel free to contact us here and see how you can mitigate your financial risk.

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Do risks to your perfected security interest end with Federal tax liens and pre-lien IRS related threats?

Account MonitoringDo risks to your perfected security interest end with Federal tax liens and pre-lien IRS related threats? The simple answer is No. Some would seem to have you believe the opposite is true, but it’s not.

For example, last week we discussed how judgment liens can prime a previously perfected security interest. If you missed that post you can check it out here. But that’s not all. In some states, State tax liens can also potentially prime a perfected security interest. Consult legal counsel for specifics state by state.

And there’s more. Non-lien related public record events can also cause a financing statement to become ineffective with a loss of perfection. For example, a debtor name change, or business structure change, or debtor relocation to a new jurisdiction, all have the ability to cause a previously perfected security interest to become ineffective.

And none of this even begins to discuss the priority effects of liens and other public records that exist prior to the filing of a secured party’s financing statement and are not IRS related.

Only a thorough due diligence search of public records can uncover and inform a secured party of the many threats that exist to perfecting a security interest and then maintain that perfection going forward. Information derived solely from interactions with the IRS is not enough.

Consider partnering with a public records company that specializes in alerting secured parties to threats to their security interests by uncovering these various threats as they appear in the public record after perfection, and also by reporting the threats that exist prior to perfection.

Information gained from the IRS, while undoubtedly critical, is not close to enough.

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Did You Know a Judgment Lien Can Potentially Prime Your Perfected Security Interest?

It’s not common knowledge, common in the way everyone knows how a Federal tax lien can prime a perfected security interest. But it’s true. Check out this article from Pahl McCay’s Catherine Robertson discussing the subject.

Her final recommendation can be found at the end of her article, “we recommend you maintain a monitoring service for lien filings against your debtors.

The critical aspect here is that the monitoring recommendation is NOT just for Federal tax lien monitoring; essentially, that is not enough and more comprehensive coverage is required to address other lien types and public record events which can potentially prime your perfected security interest.

This and other critical insights were shared as the factoring world came together in New Orleans earlier this month at the annual International Factoring Association conference. There is general acknowledgment from the factoring industry of the need to monitor but with so many solutions to choose from, how does one decide? Perhaps more than one solution is best to blend the monitoring solutions, diversify the coverage, and so be able to catch more of the possible events that might prime your perfected security interest.

When choosing your monitoring coverage options, consider the following:

  • Is the monitoring service Lien-Focused Research (Federal & State Tax Liens and Judgment Liens, UCCs)?
  • Does the monitoring service utilize ONLY Direct Data Search Results from State and County Jurisdictions?
  • Does the monitoring service utilize Search Methodology that Uncovers and Reports Name Variations?
  • Is the monitoring service integrated into your lending software to maximize efficiency?
  • Does the monitoring service also include Corporate Status, Litigation and Bankruptcy Monitoring?

What monitoring coverage options do you and your underwriters utilize?Let us know and tell us why.

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