Morgan Miller Blair

In recent months, we have seen a proliferation of deceptive notices sent to our clients relating to corporate compliance. These notices are cleverly designed to appear as if they are official communications from a governmental entity, with names such as “Corporation Compliance Center” and “State Corporate Compliance.” They remind the recipient of the requirement for a corporation to maintain annual minutes, and warn of dire consequences for failure to comply. The recipient is urged to complete a simple form and return it with a fee, usually in excess of $100, in order to maintain its compliance.

These notices are not from a governmental agency. They are from private operators who provide little if any service in return for the fee. Rest assured that neither the California Secretary of State nor any other governmental entity regularly monitors companies’ compliance with annual minutes requirements. The only compliance monitored by the Secretary of State is the filing of periodic information statements (annual, in the case of corporations, and biennial in the case of LLCs). In fact, the notices our clients have been receiving from these non-government entities usually contain (in small type) a disclaimer such as:

“CA Business & Professions Code Sec. 17533.6. This service has not been approved or endorsed by any government agency, and this offer is not being made by an agency of the government.”

The latest scam we have seen targets LLCs. This one is from the “Annual Review Board” and asks the recipient to complete the form and return it with $228.  The notice contains alarming language in large, bold type: “Avoid Penalties, Fines and Suspension – Remit Immediately!”, while the disclaimer “Annual Review Board is not a Government Agency” appears in fine print at the bottom of the form.

We are not sure if the Annual Review Board will actually prepare and file an information statement for the recipient, as the notice suggests. However, the Annual Review Board’s solicitation is being sent to LLCs long before their biennial Statement of Information deadline. The Secretary of State typically mails blank Statement of Information forms to LLCs and corporations a few months before the due date, to facilitate compliance by those companies without outside assistance. These are simple forms that you should be able to complete without the assistance of an attorney, and the filing fees are $25 for corporations and $20 for LLCs.