Since the uniform commercial code isn’t exactly applied uniformly throughout all the states, and due to the high volume of searching the state of Delaware, service companies get a lot of questions from people wondering what words are dropped when they do a Delaware UCC search with the Secretary of State. Thankfully, the Secretary of State’s office publishes a list to identify the words they ignore when performing UCC searches, also known as their “noise words.”
You can follow this link to a comprehensive list of the State’s noise words: http://corp.delaware.gov/uccsearch.shtml
A quick comment on the State’s list – It is important to note that the ending noise words are just that: they will only be dropped if they appear at the end of your search name. That means that if you search “ABC Company,” your listing will include filings indexed under “ABC Company” as well as “ABC LP” and “ABC Limited Liability Company,” but will not include filings indexed under “ABC Company Holdings” or “ABC Company, a Delaware Corporation,” for example.
Lastly, please keep in mind that although the State programmed their system to drop certain noise words, errors can occur. If you ever get results that you suspect are not correct, always check in with your UCC & corporate service provider or the Secretary of State to double-check.
Creating a title report is a complex and detailed process. It requires experience and industry expertise to craft a comprehensive report that you can trust to assist you in making decisions.
Reliability
1. Does your search company keep their word? Do you get your reports when promised?
2. Do they have errors & omissions insurance?
3. How often do they communicate with you? If your work will be delayed, do they tell you before it is due, or when it is already late?
4. How long has your search company been in business? First Corporate Solutions has been around since 1987.
Quality
5. Is your search company knowledgeable about title norms and customs?
6. Do they have a detailed understanding of title documents?
7. Do they read and understand all legal descriptions? Most searchers rely on addresses or parcel numbers instead of carefully reviewing the legal description. This practice can lead to incomplete and inaccurate reporting.
Coverage
8. Does your search company cover the entire country?
9. Do they offer the full spectrum of public records research or title services only?
10. Finally, is your search company’s goal simply to sell you title reports?
First Corporate Solutions works with our customers to first understand their needs, then create a customized report that satisfies them.
FRAUD ALERT: Watch out for Misleading Corporate Filing and Renewal Solicitations – UPDATE
Regular readers of our blog may recall that several weeks ago we posted an item about misleading solicitations being sent to California small businesses. These official-looking notices demand exorbitant fees for the filing of annual statements or the drafting of corporate minutes and threaten loss of corporate status for failure to comply.
The Secretary of State’s office has issued a new Customer Alert to inform the public that the scope of the misleading solicitations has expanded to include dissolution filings.
The solicitation letters originate from a company called Business Filings Division. The letter instructs recipients to send $495 and a completed form to them for processing in order to dissolve their entity. The steps and verbiage suggested in the letter DO NOT meet the requirements of the California Corporations Code.
For more information and to view a sample of the misleading solicitation, you can follow this link to the Secretary of State’s New Customer Alert:
http://www.sos.ca.gov/business/be/alert-misleading-solicitations-terminations.htm
Please take some time to investigate the links included above and remember to review all notices carefully before submitting payment for services. If in doubt about a notice your firm has received by mail, call a public records specialist to discuss specific filing requirements for your organization.
While everyone is in the midst of the holiday chaos, we’d like to throw out a friendly reminder that Delaware annual reports and annual franchise taxes for corporations are due on 3/1/2010 for 2009.
ALL corporations incorporated in the State of Delaware are required to file an annual report, and all but exempt domestic corporations are required to pay taxes. The annual report filing has been raised to $50.00 this year, with minimum tax at $75.00 and maximum tax at $180,000.00.
Any corporations who do not file their annual report on or before March 1st will be required to pay an additional penalty of $100.00, as well as interest on any unpaid tax balance which accrues at 1.5% per month.
It’s also important to note that any corporations that owe $5,000.00 or more pay estimated taxes in quarterly installments.
All annual reports and tax payments must be completed online via the DE SOS website: http://corp.delaware.gov/paytaxes.shtml
The site is very easy to use, but the folks at the State office are always ready to answer any questions that might arise.
Given the uncertainty of today’s economy, businesses across the nation are looking for meaningful ways to reduce spending. Lenders however, should be cautious where they make cuts and think twice before cutting too deeply from their due diligence budgets. Now more than ever, lenders need to have a clear picture of a prospect’s financial solvency before making their funding decision.
It is advisable to let your legal and risk management departments determine what searches to perform to best mitigate your risk for loss. That being said, the following due diligence search package provides for comprehensive reporting of existing financial obligations and encumbrances in the public record:
- UCCs (and available Tax Liens or Judgments) at the State Level
- UCCs/Fixture Filings, Tax Liens and Judgments at the County Level
- Civil Litigation at the State Court of General Jurisdiction
- Civil Litigation at the U.S. District Court
- Bankruptcy at the U.S. Bankruptcy Court
Thorough due diligence searching can help lenders make funding decisions with confidence. For more information on search options, contact a public records professional. Many service companies can customize a search package to meet your specific pre and post-funding due diligence needs.
California public records professionals have learned of a troubling new con taking place in our state. Over the last couple of years, we have fielded countless phone calls from anxious clients regarding suspicious notices they have received in the mail. The official-looking notices demand exorbitant fees for the filing of annual statements or the drafting of corporate minutes and threaten loss of corporate status for failure to comply.
THESE NOTICES ARE FRAUDULENT. Although they may appear to come from a legitimate government agency, refer to specific code sections in the text or contain an official-looking seal, they are actually solicitations for business from phony companies that prey on earnest small business owners, hoping trick them into paying something for nothing.
Prompted by thousands of complaints, the Attorney General’s office is taking action. Last month, Attorney General Edmond G. Brown, Jr. filed suit against several individuals and businesses that have been running misleading solicitation scams.
You can read the Attorney General’s press release by following this link:
http://ag.ca.gov/newsalerts/release.php?id=1817&
The Secretary of State’s office has issued a Customer Alert that provides valuable tips for spotting fraudulent notices:
http://www.sos.ca.gov/business/be/alert-misleading-solicitations.htm
Please take some time to investigate the links provided above and remember to review all notices carefully before submitting payment for services. If in doubt about a notice your firm has received by mail, call a public records specialist to discuss specific filing requirements for your organization.
Because of an addition to the Delaware General Corporation Law, the Delaware Secretary of State is asking that all non-stock corporations filed with the SOS complete an amendment filing in an attempt to set the exempt records straight, as well as ensure that all non-stock corporations are charged the correct Annual Report filing fee come tax time.
The addition signed into law by the 145th General Assembly and the Governor is as follows:
Amend § 391, Title 8, Delaware Code, by adding a new subsection (j) as follows:
“(j) As used in this section, the term “exempt corporation” shall be defined as any corporation organized under this chapter that is not authorized to issue capital stock and that:
(1) is exempt from taxation under § 501(c) of the United States Internal Revenue Code or any similar provisions of the Internal Revenue Code, or any successor provisions;
(2) qualifies as a civic organization under § 8110(c)(1) of Title 9 or § 6840(4) of Title 16;
(3) qualifies as a charitable/fraternal organization under § 2593(1) of Title 6;
(4) is listed in § 8106(a) of Title 9;
(5) is organized primarily or exclusively for religious or charitable purposes; or
(6)(i) is organized not for profit and (ii) no part of its net earnings inures to the benefit of any member or individual.”
This filing, which the SOS asks to be completed and returned by November 30, 2009, will be filed at no charge. Any corporations meeting one of the above listed requirements will pay an Annual Report filing fee of $25 rather than the $50 fee required from non-exempt corporations.
Any questions can be directed to the Delaware Division of Corporations: 302-739-3073.
As of October 30th, 2009, Massachusetts has approved new regulations pertaining to Limited Partnerships and Limited Liability Companies. Copies of these regulations can be found here: http://www.sec.state.ma.us/COR/cornotice.htm
One of the perks: in the past, if you were merging a MA LLC and a MC Corp., you had to provide both a filing for the Corp as well as a filing for the LLC; according to the new regulations, now you only have to submit one filing (the fees remain the same as they were for both filings, so no break there).
Another nice change is that you will no longer be required to provide two originals for MA Limited Partnership filings when filing over the counter; one will suffice (e-filing will remain the same as there are no originals required). The MA SOS will also now begin issuing LP Good Standing certificates, which will list the LP’s general partners. This new, long-awaited certificate will replace the Long Legal Listing General Partners.
For a complete list of changes and updates, visit the URL above.
Rejected documents cost filers valuable time and money. I hope that you’ve had the opportunity to review our previous blog posts addressing common mistakes on UCC1 Financing Statements and UCC3 Change Statements. In this post, we will discuss common reasons for the rejection of Corporate Documents.
A Corporate Document can be rejected for a variety of reasons. Here is a list of some common reasons a state might reject a Corporate Document:
Name not Available
States will not allow multiple active entities to hold the same name. If your chosen name conflicts with an existing entity, the state will reject your document. To combat this issue, many states allow filers to check the availability of and reserve their name prior to submitting documents for filing.
Document is of Poor Quality
The filing office will refuse a document that is not legible. Please note that the definition of a legible document is evolving as technology advances. Presently, most states will reject a document that, while legible in hard copy form, will not scan well into their electronic database.
Missing Signatures
Each Corporate Document has specific signatory requirements. Most states will now accept a non-original signature, but a document that is missing a required signature will always be rejected.
Proper fees not Included
A document will be rejected if the proper fees do not accompany it. Keep in mind that some states have add-on fees above the actual filing fee. These additional charges may include a counter fee, prepayment of taxes, expedite or special handling charges, certification fees etc.
In closing, remember that each jurisdiction has unique and specific filing requirements. Please be sure to read the form’s instructions carefully. If you are stuck, it is advisable that you speak with an attorney or contact a private service provider with expertise in the filing of Corporate Documents.
If you need to search for anything at the county level in Delaware, you only have three counties from which to choose: New Castle (northernmost), Kent (middle), and Sussex (southernmost).
The Bankruptcy Court and U.S. District Court are located in the county seat of Wilmington, which is in New Castle County.
Below is a handy guide for figuring out what’s located where at the county level:
Recorder of Deeds: UCC/fixture filings, federal tax liens and property searches including property tax information, current owner, and deed and mortgage info.
Superior Court (also known as the Prothonotary): State tax liens, judgments, pending suits, assumed names, criminal (felony & misdemeanor cases), civil cases over $50,000
Chancery Court: Civil records
Court of Common Pleas: Misdemeanors, civil cases under $50,000
For corporations, folks tend to file in the county of the registered agent, although there have been plenty of instances in which filings have been recorded in a different county than that of a corporation’s registered agent!
For additional information, each county has its own website:
New Castle County: http://www2.nccde.org/Home/default.aspx
Kent County: http://www.co.kent.de.us/
Sussex County: http://www.sussexcountyde.gov/
