Parasec :: The Source

X (Reference) Marks the Spot

2012-01-11T11:40:00.000-08:00

About the author: A prolific writer and presenter, Edward Noyer has penned numerous articles for trade association magazines and paralegal associations across the nation. His background in banking and certification from an American Bar Association-approved paralegal program only add to his credentials, which include a degree in business administration and marketing. Edward is currently the Director of Product Marketing at Parasec.

Can a UCC filer use anassumed name as the organizational name when the assumed name is x-Referencedin the corporate index? Bankruptcy Court asked to decide.

Does the existence of cross-referenceddebtor name on a corporate filing office website meet the definition of “publicrecord” for an organizational debtor? This is a question posed recently in theEastern District of Michigan, Southern  Division (Detroit)  bankruptcy courtcase.  In the bankruptcy case of In Re: Harvey  Goldman & Company,  a/k/aWorldwide  Equipment Company,  2011 Bankr. E.D. LEXIS  3356 Mich. (Sept. 13, 2011).

“The Harvey Goldman  & Company” was formedas a Michigan corporation in 1947 with the filing of Articles of Incorporation. OnJune 7, 1991, a certificate of assumed name was filed with the Department ofLicensing and Regulatory Affairs, Corporations Division. This filing indicated thatthe corporation would be using the name of “Worldwide Equipment Company” totransact business.

On January 3, 2007, the Abraham andGeraldine Irrevocable Living Trust filed a UCC-1 Financing Statement with theMichigan Secretary of State. The UCC was filed under the debtor name of “WorldWide Equipment Co.” The filed UCC statesthat it covers “inventory in the amount of $650,000 to secure an outstandingloan.”

On July 14, 2010, an involuntaryChapter 7 petition was filed against “The Harvey Goldman & Company.” Havingbecome aware of a security interest claimed by the secured party, thebankruptcy trustee filed a motion for summary judgment against the securedparty alleging the financing statement was not filed under the debtor’scorporate name.

The defendant (secured party) filedtheir financing statement under the name of “World Wide Equipment Co.” asimilar name to the name on the assumed name statement of “Worldwide EquipmentCompany.”

The plaintiff argued that the truename of the corporation was “The Harvey Goldman & Company” and thereforeshould have been the name provided as the debtor for the UCC filing. Thedefendant did not dispute that the name of the corporation was “TheHarvey Goldman & Company.” The defendant also did not dispute that theMichigan Uniform Commercial Code states that, “... if the debtor is aregistered organization the financing statement is only sufficient if itprovides the name of the debtor as indicated on the public record of thedebtor’s jurisdiction of organization which shows the debtor to have beenorganized.”

The plaintiff provided proof that aUCC and Tax Lien search from the Michigan Secretary of State conducted by the interim trustee did notdisclose the secured parties filing as it was filed under the wrong name. Thedefendant concurred that their filing failed to be located in the UCC and TaxLien search obtained from the interim trustee, however, the defendant offeredthe court four arguments as to why their filing was not seriously misleadingand had been filed under the correct debtor name.

The filing of the assumed name certificatehad made that name the name of the debtor. Therefore, the failure to providethe name “The Harvey Goldman & Company” did not make their financingstatement seriously misleading.
A search of the “public record” at theDepartment of Licensing and Regulatory Affairs corporate division would haveled to the debtor name of “Worldwide Equipment Company” as it  is crossreferenced with “The Harvey Goldman & Company” so a search of either namereveals the other.
A financing statement is effective evenif it has minor errors or omissions unless those errors and omissions make thestatement seriously misleading. As the financing statement was cross referencedin the corporate division index, and this agency is a ‘filing office’ thisstatement would not have been seriously misleading.
The debtor conducted business usingthe name “Worldwide Equipment Company” with all checks, letterhead, invoicesand signs. In addition, the correct tax identification number had beenprovided on the financing statement.

The court rejected each and everyargument set forth by the defendant as a false argument and fallacious methodof reasoning. The instructions on a Michigan AssumedName Statement clearly state it is to be used by, “corporations...desiring totransact business under an assumed name other than the true name [emphasisadded] of the corporation.” Michigan law clearly sets forth that the name ofthe corporation is the name provided on the Articles ofIncorporation. As the Articles of Incorporation list the name of thecorporation as “The Harvey Goldman & Company,” this is the name of theorganizational debtor. Having establishing the name of the corporation as “TheHarvey Goldman & Company” the defendants’ arguments became a house ofcards. With a debtor name clearly established, the search logic would now dealthe final blow to the defendant.

The search logic is the test as towhether a filing is “seriously misleading.” If a filing is located using thestandard search logic, it is not considered “seriously misleading.” However, ifthe standard search logic fails to locate a filing, it is deemed “seriouslymisleading” under Michigan law and fails to perfect a security interest.

The final argument raised by thedefendant had to do with the fact the corporations’ signage, business documentsand tax ID number where all under “Worldwide Equipment Company.” The courtfound that, “this is unremarkable as it is what one would expect of acorporation doing business under an assumed name.”

The Uniform Commercial Code is veryclear in §9503 that when a UCC is filed against an organization it “mustcontain the name of the debtor indicated on the public record of the debtorsjurisdiction of organization which shows the debtor to have been organized.”This section also states that a UCC is not rendered ineffective by the lack ofa trade name.

One of the fascinating facts to comefrom this case is that even if the court had found the trade name wasacceptable it would still have been regarded as seriously misleading andineffective to perfect a security interest as a space was placed between thewords “world” and “wide.” Under the search rules in Michigan, this spacingwould have resulted in the filing being excluded from the official search.Since the filing would not have been located using the standard search logicthe filing would have been seriously misleading and ineffective to perfect asecurity interest. There was no way in which this defendant could haveprevailed in this case. •

Parasec is a legaldocument filing company and does not provide legal advice. Since everytransaction is different, clients are advised to speak to an attorney. Parasecmakes no warranties as to the completeness or accuracy of this document.

California: Changes to Nonprofit Certificate of Dissolution

2012-01-04T09:49:00.000-08:00

Yesterday, we received notice from the California Secretary of State (CA SOS) regarding changes made to the requirements relating to a nonprofit Certificate of Dissolution. The changes, which became effective on January 1, 2012, are the result of AB 1211 Silva. The email from the CA SOS outlined the changes as such:

The statement required to be in a nonprofit Certificate Dissolution regarding the filing of the corporation's final tax return has changed, and Item 2 in the Certificate of Dissolution (Form DISS NP) has been revised accordingly. Because that statement has changed, the previous version of Form DISS NP is no longer acceptable for filing by domestic nonprofit public benefit, religious, and mutual benefit corporations.

The instructional material included with Form DISS NP has been updated to explain that a nonprofit public benefit and religious corporation filing a Certificate of Dissolution does not need to obtain the letter from the Attorney General if the corporations meets the requirements discussed in California Corporations Code section 6615(a)(5), and if a written statement by the corporation is included in the Certificate of Dissolution that confirms the corporation meets those requirement.

A few nonsubstantive formatting changes have been made to the nonprofit Certificate of Election to Wind Up and Dissolve (Form ELEC NP), and the previous version of Form ELEC NP remains acceptable for filing, but will no longer be available

If you have any questions regarding these changes or if you need assistance with filing your dissolution, give us a call at 800.533.7272. We're here to help!

California: Changes to Statement of Information Filings

2011-12-30T14:18:00.000-08:00

Beginning January 1, 2012, several legislative changes to Statement of Information (SOI) filings in California will go into effect as a result of AB 657. The California Secretary of State (CA SOS) is currently revising its filing forms and sample packets in order to reflect the new requirements, and expect that the updated documents will be available on their website during the first week of January. The CA SOS has plans to phase in additional system changes over the coming months, and we'll be sure to notify our clients as we become aware of the changes being implemented.

Currently processing documents submitted back in August, the CA SOS points out that only expedite documents and some documents submitted electronically will be affected immediately. The office will continue to accept mailed in SOIs submitted on the old forms after January 1st; however, customers are encouraged to use the new forms as soon as they are available to ensure documents are not rejected for using outdated forms.

The below text, taken from an email from the CA SOS, highlights some of the changes that will be implemented:

Corporate Statements of Information:

The entity number will be required in addition to the entity name.
Foreign corporations must now file a 90-day initial Statement of Information (the same as other corporation types and LLC's).
Filers will have the option of providing an email address only for the purpose of us sending them notifications (reminders, delinquency notices, etc.).
Nonprofit corporations formed to manage a common interest development (CID) will no longer be required to provide any CID related information on the Statement of Information, other than having to check the box stating they are a common interest development; all CID information will still be required on the Statement by Common Interest Development Association that accompanies the Statement of Information, as applicable.

Statements by Common Interest Development Association:

The street address of the business or association's corporate office, if any, must be included.

Limited Liability Company (LLC) Statements of Information:

LLC's are to include a mailing address, if different from the street address of the principle executive office.
Filers will have the option of providing an email address only for the purpose of us sending them notifications (reminders, delinquency notices, etc.)

Articles of Incorporation for Nonprofit (Common Interest Development) Corporations:

Filers no longer have to provide the nine-digit zip code associated with the association's location in the articles of incorporation.

If you have questions about any of these changes, feel free to call and speak to one of our knowledgeable account executives. We can be reached at 1.800.533.7272.

Important Notice to Limited Liability Companies in Mississippi

2011-11-30T09:32:00.001-08:00

Limited Liability Companies (LLCS)in Mississippi now have until December 5th to file their annual report with theSecretary of State’s office—the orginal filing deadline was April 15th, but anextension has been provided. LLCs that fail to file by the new deadline will face administrative dissolution. According tothe MS SOS, 40,000 LLCs in the state had not filed their annual reports as ofTuesday, November 29th. Don't forget to get yours in!

If you need help filing your annual report, give us acall at 800.533.7272!

Increased Funding for Processing Business Filings at CA SOS

2011-11-02T11:35:00.000-07:00

According to an email from Betsy Bogart, Chief of the Business Programs Division of the California Secretary of State (CA SOS), the California State Assembly's operating budget this fiscal year had a $1.2 million surplus. Secretary of State Debra Bowen and California State Assembly Speaker Jon Perez have joined forces to allocate the additional funding to the CA SOS's Business Programs Division. The money will be used for overtime and to enlist temporary help, both of which are anticipated to reduce the lengthy processing times currently being experienced within the department.

Colorado Secretary of State Alerts Business Community about Deceptive Mailings

2011-04-13T14:22:00.000-07:00

Earlier this month, the Colorado Secretary of State (CO SOS) issued an alert to the Colorado business community regarding deceptive mail solicitations. The official-looking documents request a $225 annual fee to file reports with the Secretary of State’s office and use stress-inducing words like "noncompliant" and "delinquent" in order to elicit a response. According to the CO SOS, in most cases, the annual fee is merely $10 if filed directly with the Secretary of State’s office. That's quite a profit these clever scam artists are making, huh?

The documents, which are titled “Periodic Report,” are creating confusion for many Colorado-based business who are being urged to keep an eye out for these deceptive solicitations. The documents are being sent out by an entity calling itself the “Corporate Controllers Unit.” Please be aware, that these forms are not required by the Colorado Secretary of State’s Office. If you would like to review your entity’s records, please visit the CO SOS's web site.

To view a sample of one of these solicitations, click here.

As always, feel free to give us a call if you have ANY questions about documents you may receive—from us or another party. We’re happy to help make sure you don’t get caught in one of these costly scams! We can be reached toll-free at 800.533.7272.

Mississippi: Annual Reports Deadline Approaches

2011-04-07T08:28:00.000-07:00

This is the first year limited liability companies (LLCs) are required to file an annual report with the Mississippi Secretary of State (MS SOS). The deadline to file both LLC and corporate annual reports is April 15, 2011. Failure to file by the deadline may lead to the LLC or corporation being administratively dissolved. In order to submit an annual report, you will need your company’s business identification number, which can be found on the MS SOS web site.

Mississippi domestic LLCs are not required to pay a filing fee with their annual report, however; there is a $250 filing fee for out-of-state or “foreign” LLCs. The fee to file a corporate annual report (both foreign and domestic) is $25. If you have any questions or need assistance filing your annual report, give us a call at 1.800.533.7272 or send us an email.

Senate Bill 133: “The Strictest Law in the Nation on Rebates” and its Effect on Title Marketing

2011-04-07T07:49:00.000-07:00

About the author: Ian Sierchio came to Parasec with over seven years experience in the medical and advertising industries. After his years in the advertising industry, on both the state and national levels, he decided to transition into the legal field as a way of satisfying his insatiable thirst for knowledge. Parasec and the wide breadth of its covered service areas have not disappointed. With Parasec’s many departments, covering work in many states, Ian has a never-ending area in which to learn and grow. In addition, spearheading our research and development allows him to uncover new service areas moving forward.

On January 1, 2009, a bill (SB 133) regulating the marketing of title insurance went into effect in California. As a result, solicitation of title business from real estate brokers and agents has been restricted heavily in the hopes of limiting activities which would induce referrals. There are arguments for and against this law, and the trickle-down effect it has had on the real-estate industry. Other states are taking notice of the changes and it is likely that similar bills will be introduced across the nation. 

The summary statement from the bill reads as follows: “Would establish procedures for obtaining and renewing a certificate of registration as a title marketing representative, as specified; prohibit a person from marketing, offering, soliciting, negotiating, or selling title insurance in California without a valid certificate of registration as a title marketing representative; and place limits on the value of items that title marketing representatives are allowed to provide to those in a position to refer business to the title insurers they represent.”

This means that all title company sales or title representatives are now required to be licensed with the California Department of Insurance (CDI). The reps as well as the title companies themselves are now subject to fines. Additionally, the reps are also subject to suspensions/revocations if found in violation of the law. If a rep’s license is revoked, the offender cannot reapply for five years from the date of revocation.

Prior to SB 133, the CDI had no enforcement authority over the individual title marketing representatives who engaged in illegal rebating activities. While these practices were still technically illegal, the department only had the ability to fine the title insurers. The CDI is now authorized to bring administrative actions against the sales reps and title insurers who engage in these practices.

One fear was that this type of activity could be viewed in some cases as commercial bribery, which is a crime under the California Penal Code. Another fear is how expensive these “crimes” can be for a title company, which can be fined up to five times the amount of the expense. The law establishes zero tolerance for enticing realtors and lenders with anything that can be construed as an inducement to refer title business. This includes:

· Providing meals
· Purchasing tickets to sporting events
· Purchasing advertising on behalf of an agent or broker
· Creating/providing marketing materials on behalf of an agent or broker
· Distributing any item with monetary value (gift cards, event tickets, car washes, etc)
· Providing unlawful rebates (quote or charge under their filed rate with state of CA)

Many title companies, which have provided “accommodation” work in the past at no charge to law firms, lenders and other real estate-related companies; are now afraid these services could be a violation of the law. Not willing to expose themselves to the potential risks involved, they’re turning to Parasec and other public records filing and retrieval companies, which are then supplying companies with these types of documents.

With the filing and retrieval of deeds no longer being performed gratis, our industry is seeing an influx of outside referrals from our title company clientele. The title companies want to help, but to do so directly exposes them in a way they are not willing to risk. Real estate law firms, lenders and others are now left to fend for themselves while attempting to deal directly with other counties and even states in certain situations They’re spending precious time, money and manpower on a service they’ve been handed for years.

Parasec offers a variety of commercial title support and real-estate-related services to a wide range of businesses, including title companies, developers, lenders, asset managers, pension advisors, real estate attorneys, investors and banks. Title companies certainly offer many of the services Parasec specializes in, but we find that even title companies choose to outsource this “accommodation” work to us.

With the enactment of this law, we are finding new services we can assist with on a regular basis. Parasec is not a title company and this type of accommodation work is what we specialize in. We do not insure or underwrite projects in any way—we simply provide the accurate and timely information needed for the job at hand. From a standard Chain of Title report to a Full Commercial Search to simple Mechanics Lien searches, Parasec is happy to assist you in California and every other state.

The Alert is Out!

2011-04-06T08:05:00.000-07:00

The latest issue of our newsletter, the Alert, is now available. We make it our goal to keep you updated on important developments in the legal arena. Plus, enjoy interviews with paralegals from Gray Robinson PA (Jacksonville, Florida) and Quateman, LLP (Los Angeles, CA). Check it out online here.

CA SOS Backs Bill to Stop Deceptive Business Solicitations

2011-04-05T08:48:00.000-07:00

Throughout the years, the California Secretary of State (CA SOS) has issued many customer alerts regarding deceptive solicitations aimed at those doing business in the Golden State. In fact, the attorney general has received upwards of 1,000 complaints regarding these fraudulent solicitations. Most of the scams have involved similar tactics, including the mailing of official-looking documents warning that if the forms are not returned with payment by a certain date, the companies will risk loss of their status with the state of California. The fees requested in the scams have sometimes been as high as $495.

There is currently a bill (AB 75) making its way through the legislature that would require third-party vendors to include more obvious disclaimers on their solicitations. The disclaimers would make it clear that the documents received are not government documents—hopefully preventing more businesses from falling prey to these types of scams.

Secretary of State Debra Bowen is requesting support to ensure AB 75 makes it to the Governor's desk and is signed into law. Bowen is urging Californians to submit support letters to their legislative representatives. To view several sample letters urging your chamber to support this legislation, go here.

Parasec has been working for at least the past couple of years to get the word out about these ongoing scams and will continue to try to warn our clients about the potential for being deceived by these clever scam artists. Please feel free to give us a call at 1.800.533.7272 if you have any questions about documents you have received.

CA SOS Issues Customer Alert Regarding Online Notarization Services

2011-03-30T12:05:00.000-07:00

The California Secretary of State (CA SOS) recently issued an alert regarding a private company claiming to offer online notarization. The company has sent misleading information and made false claims that its new web-based platform allows a person to submit copies of identification using a webcam in lieu of appearing in person. The CA SOS wants to stress that appearance via webcam is not a permissible option and that online notarization services are not legal in California. Read the complete customer alert here.

Changes at Parasec

2011-03-23T15:20:00.000-07:00

Spring is right around the corner and many of us are eager to get things organized and to introduce positive changes and enhancements to our lives. At Parasec and Paracorp, we’re doing the same thing. In fact, we have made several management-level changes that we are confident will help make our accessibility and customer service better than ever.

From this point on, I will act as chairman of the board, a position that will allow me to stay active in the overall vision and direction of the company. This will be a great change for me after spending 20 years as president. While the duties of my position have changed somewhat, I plan to maintain as much customer contact as possible and am looking forward to facing some new challenges.

Matt Marzucco, previously our operations manager, will step into the role of president, taking on responsibility for much of the day-to-day functions of the firm as well as increasing his contact with our wonderful clients. Matt has been with the company for 14 years and has worked in our registered agent division, IT department and our operations wing. Matt and I are both excited about this reorganization because it will give our clients more access when they need a quick response from someone in a top-level position.

Replacing Matt as operations manager will be Jessica Sierras, who has been with Parasec for 12 years and has moved up steadily from account executive to supervisor (of Title and UCC as well as our branches) and now to operations manager. Jessica is an eager learner with a thirst for knowledge and we are confident that she will take the reigns of operations manager with great skill and gusto.

Another change within the company is that Ian Sierchio has assumed the position of sales manager, a role that he has stepped into with great success – as many of our clients can attest. Ian’s insatiable curiosity and hunger for knowledge have led him from acting as one of our regional accounts managers to becoming assistant sales manager and finally to his new role as sales manager.

Phil Conner, previously our acting sales manager, will now focus his efforts on corporate development and other additional projects within the company. His commitment to this company and to our continued growth and success are of great value.

Finally, it would be remiss not to mention Barbara Geiger, who will remain vice president and head of our registered agent division (Paracorp). Barbara has been a member of the Parasec team since 1992, and her knowledge, experience and dedication to our clients and staff have made her an integral part of the company.

As a company, we feel that these management changes will improve our ability to service our clients and at the same time continue to grow and prepare our employees for continuing advancement. Please let us know what you think as you experience this growth with us. Please feel free to contact any of us for any reason you may have, including just to say “hello.”

Lynn Conner

Chairman of the Board

Oklahoma Tax Commission Franchise Tax Filer Notification

2011-02-25T08:10:00.000-08:00

Every entity doing business in Oklahoma is now required to file a Business Activity Tax (BAT). The imposed tax comes about as a result of Senate Joint Resolution 61 (SJR 61), which passed during the 2010 legislative session, and will be in effect for tax years 2011 and 2012. The BAT will be filed in lieu of the Franchise Tax return, which had a moratorium placed on it as a result of SJR 61. The BAT form was made available for use back in January 2011. Additional filing and payment information, please visit the Oklahoma Tax Commission web site at www.tax.ok.gov or give us a call at 800.533.7272.

UCC-1 Filing Letters in New Hampshire

2011-02-24T15:12:00.001-08:00

We here at Parasec recently received notice from Debra Ulmanis – of the New Hampshire Secretary of State’s office (NH SOS) – informing us that the NH SOS has been getting complaints from folks regarding letters stating that UCC-1s have been filed against them. The letters appear to be coming from two different companies: General Merchant Capital (based in Pennsylvania) and Paramount Merchant Funding (in New York City). The letters being mailed out contain verbiage similar to the following:

"We have been advised by an independent search agency that there was a UCC-1 filed against your company, with the NH Secretary of State. This indicates that you or a previous business at the same location has obtained financing from one or more companies in the past. While this is no way detrimental to your business, it may hinder your chances of obtaining financing in the future. To learn how to satisfy the UCC-1 against your business and receive additional working capital against your future credit card receivables with better rates, terms and no UCC-1 Filing, Please Call 888-221-2760 at your earliest convenience. Please reference PMFID: 20100015479M to have fund wired into you account in as little as three (3) business days..."

While these companies claim to have obtained the information from a list of public records that was supposedly supplied by the UCC office, the NH SOS office assured us that they provide no such list. Furthermore, some of the individuals who are receiving these letters do not even own businesses or haven’t owned one in many years.

If you’ve received a letter in similar nature, we’d love to know about it. Our goal is to keep our clients informed of any scams that may adversely impact them. Remember, knowledge is power. Feel free to contact us at 800.533.7272 with any questions or concerns you may have.

Embassy of Libya in DC

2011-02-24T14:25:00.000-08:00

We have just received word that the Embassy of the Libyan Arab Jamahiriya (aka the Embassy of Libya) in Washington, D.C. has been shut down due to “a dictatorship and a civil war." The embassy officer our representative spoke with had no idea as to how long the embassy would remain closed for. We will be sure to keep you abreast of changes in the embassy's status as we are made aware of them.

New SOI Scam Targeting CA Entities

2010-12-21T10:14:00.000-08:00

Parasec has just received official-looking documents from an entity calling itself “Department of California Collectors” or DCC. The official-looking documents imply that entities are required to complete the paperwork and return it along with a $175 fee for filing a Statement of Information. Please note: the fee for filing a Statement of Information with the California Secretary of State's (CA SOS) office is $20 or $25 - NOT the $175 these scams claim.

Please stay alert because there are many other companies perpetrating similar types of scams. Give us a call if you have ANY questions about documents you may receive, we can help determine if the documents you have received are legitimate or not.

New Mechanic’s Lien Requirements in CA

2010-12-03T07:52:00.000-08:00

According to a blurb in a recent issue of the California State License Board’s (CSLB) newsletter, recent changes to the California mechanic’s lien law will soon require contractors, subcontractors and suppliers to provide property owners with a Notice of Mechanic’s Lien. In addition, a Proof of Service Affidavit must also be completed, signed and delivered to the property owner. The new requirements will take effect January 1, 2011, and failure to comply with them will render the mechanic’s lien unenforceable.

The changes come about as a result of Assembly Bill 457, which can be read in its entirety here.

CA SOS Measure Hopes to Decrease Processing Times

2010-08-10T11:43:00.001-07:00

As many of you are aware, the California Secretary of State (CA SOS) has been experiencing processing delays due to budget cuts made during the past two years. The Legislature’s Budget Conference Committee recently adopted a measure (Budget Conference Item 0890-001-0228) to help improve processing times at the CA SOS. Secretary of State Debra Bowen is requesting the authority to use business filing fees to make technological upgrades, pay staff overtime and hire temporary staff to help process backlogged filings. Currently, the use of these fees is restricted. Bowen is urging Californians to submit support letters to the Governor’s office in an effort to get the measure preserved in the final budget. In an effort to keep our clients informed of the goings on at the CA SOS, we’ve included links to the letter we received from the CA SOS as well as two sample support letters for your review.

Letter Parasec received from the CA SOS

Support Letter to Governor Schwarzenegger

Support Letter to Legislative Leadership

CA SOS Makes Changes to Certified Copies

2010-07-23T09:06:00.000-07:00

We received notice from the California Secretary of State (CA SOS) that in order to improve their services and reduce expenses, the Business Programs Division, excluding the Uniform Commercial Code Section, is changing the way that they process and provide certified copies of documents.

The CA SOS currently provides a separate cover sheet indicating that the copy is a true and correct copy of the original document of record with their office. The change will eliminate that cover page and now every document certified by the Business Programs Division, with the exception of Uniform Commercial Code Section, will contain a manually placed certification stamp. This procedure will be implemented for document filing and retrieval.

The stamp will appear on the back of the final page of the document in the lower right-hand corner. The stamp will contain the date the document was certified, the signature of the Secretary of State, and the California State Seal. Within the area of the stamp will be the handwritten number of pages being certified and the initials of the deputy certifying the document.

Please take a moment prior to submitting documents to ensure that they are complete and printed only on one side. As part of Parasec’s quality control process we will double check this prior to submitting to the Secretary of State as well to avoid any delays.

Make note that any pending orders that are currently at the Secretary of State for filing or retrieval will be returned to us using this new procedure.

Please contact your Account Executive directly if you have any further questions.

Parasec at the LBLPA Event

2010-04-29T08:48:00.000-07:00

The Long Beach Legal Professionals Association (LBLPA) held its annual Installation of Officers Reception on Tuesday, April 20, 2010 at the Grand Event Center in Long Beach. The event had a surprising turnout for a Tuesday evening, with nearly 20 legal professionals in attendance. Lynn Conner, President of Parasec, was invited to attend and speak at the event, where she gave her “Legal Ethics and Corporate Officer Fraud” seminar.

“I had a wonderful time at the event,” remarked Lynn. “Everyone was very welcoming and it was a pleasure to meet so many new people.”

Erin Sierchio, Executive Assistant to Mrs. Conner, was equally impressed with the folks she met. “Everyone I spoke with was friendly and they made me feel at ease. I can’t wait for them to come up to Sacramento next month for the Legal Secretaries, Incorporated (LSI) annual convention, so we at Parasec can repay the warm welcome.”

CA SOS San Diego Office Closure

2010-02-01T10:13:00.000-08:00

Due to budget cuts, the California Secretary of State has decided to close its San Diego regional office. The closure will go into effect on April 2, 2010. Documents which would normally have been submitted at the San Diego office should now be submitted (via mail or in person) to the Sacramento location (1500 11th Street, Sacramento, CA 95814). Documents may also be delivered to the Los Angeles regional office (300 South Spring Street), which will continue to offer services previously available at the San Diego branch. If you need assistance with filing or retrieving public documents with the CA SOS, Parasec can help make the process seamless. Give us a call today at 800.533.7272.

State Turnaround Times

2010-01-27T14:34:00.000-08:00

Well, we’re wrapping up the first month of the new year and I am happy to report that we are seeing some improvements in the economy and hearing good things from some of our clients about their businesses improving – two things that give me a very positive feeling as I look further into the year and beyond.

That said, I am still concerned with the ability of our governmental agencies to handle the volume of a growing workload as the economy begins to pick up and improve. I’ll use the California Secretary of State (CA SOS) as an example. At the end of the calendar year things tend to get a little wild in the corporate-filings division. Volume rises dramatically, special date requests are more frequent and the number of expedited filings increases. In past years, the CA SOS has accommodated this boost in business by working overtime – especially on weekends – to get the backlog completed and get back to business as usual.

With the state’s poor budget and mounting deficits, the CA SOS can no longer utilize overtime as they have, so timeframes have jumped exponentially. Documents that used to take five to seven business days to process are now taking 15 business days. As of today, January 27th, the state is working on documents filed on January 7th. I’m not sure how long it will take them to work through the holiday workload and bring the timeframes down to a reasonable range. The CA SOS isn’t even participating in furloughs as most other state departments are. What would things be like if their staff was taking an additional two days off a month?

While most states are not faced with quite the fiscal crisis that California is, many are still confronted with some significant financial belt tightening, which may well affect the turnaround times on document filing and retrieval. We are monitoring state timeframes on a daily basis and will continue to provide our clients with estimates based on the most up-to-date information.

Sacramento Valley Paralegal Association Luncheon

2009-11-18T15:33:00.000-08:00

Today I was invited to sit in on the Sacramento Valley Paralegal Association’s monthly CLE luncheon. I was unable to attend, so I sent my right-hand person, Erin Sierchio. Here is her recap of the event:

Nearly 20 SVPA members attended today’s Sacramento Valley Paralegal Association meeting, which was held in the conference room here at Parasec’s Sacramento office. The featured speaker was Gregory Axten, CEO of American Geotechnical, who gave an unexpectedly interesting presentation on "Diagnosing Soil Problems."

Mr. Axten is a civil/geotechnical engineer with more than 37 years of experience in the fields of soil engineering, foundation engineering, geology, materials engineering and hydrology. He has acted as an expert witness for problem analysis and dispute resolution in nearly 100 trials.

One of the interesting tidbits that Axten discussed was the impact landscaping, and trees in particular can have on soil and therefore on structures built nearby. Tree roots can lift foundations and slabs as well as create soil shrinkage so it’s important to consider this when planting them near structures. When determining where to plant trees, Axten suggested that we estimate that the roots will grow to extend out from a tree at a distance equivalent to the tree height, and simply trimming a tree will not stop the roots from growing!

Axten also discussed common indicators of structural problems, such as cracks and separations, slope movement, wall tilt, soil features, seepage and poor drainage. Axten was able to illustrate – in layman’s terms – how analyzing soil samples, investigating damage, and running field and laboratory tests can help determine what caused specific structural damages. It’s his keen eye and expertise in identifying these problems that have led people from the legal community to seek out his assistance with cases.

IRS Amnesty Program a Success

2009-11-03T08:15:00.001-08:00

The IRS recently ran a very successful amnesty program which ended October 15, 2009, for individuals who have been maintaining offshore accounts to avoid US taxation. The hope was that citizens would voluntarily come forward to report their accounts rather than the IRS having to track them down at significant taxpayer expense. As a result of the program, nearly 7,500 citizens and residents came forward to report their offshore accounts. The amnesty provided said individuals with an incentive for reporting any illegally hidden assets, including a significant reduction to any unpaid taxes and penalties, and the removal of criminal penalties and/or prison time.

Of the citizens/residents that voluntarily came forward, the dollar amounts associated with the hidden assets varied from accounts as small as $10,000, and as large as $100,000,000. The IRS did not estimate how much tax income would be generated as a result of the program, but they were very pleased with the program’s turn out.

The benefits of the program are not limited to the individuals who have come forth thus far. As the IRS has time to process these accounts and speak at length with the individuals, they are certain they will be able to identify additional offshore account holders who did not come forward. For example, CPAs, investment advisors and others who have participated in helping citizens to hide their money off shore. As these individuals are identified, more offshore accounts will be identified and the monies will become available for taxation.

Another benefit is that the taxpayer will now be in the system for each year from now forward. Depending upon the number of tax avoiders found during this amnesty program and the follow up searches, that could be a significant addition to the state and national tax rolls for years to come.

If you have an offshore account that is hiding income and did not sign up for the amnesty program, all is not lost. The IRS is considering extending the program but has not made a decision yet. Also, there are other programs available to help you mitigate the penalties involved. Contact your CPA for assistance with bringing your offshore accounts into tax compliance.

Santa Barbara Paralegal Association Luncheon

2009-10-29T15:41:00.000-07:00

It’s a beautiful Thursday afternoon and I just finished speaking at the Santa Barbara Paralegal Association (SBPA) luncheon in sunny downtown Santa Barbara. The event marked the association’s annual meeting, during which they held elections for next year’s officers and listened to me speak for an hour on “Legal Ethics and Corporate Officer Fraud.”

There was a great turnout at the event, with somewhere between 35 and 40 members in attendance. The group was very friendly and I didn’t catch a single person sleeping during the presentation. I’d love to think that it is because of the quality of my presentation, but I can’t quite be sure.

The meeting was held at the Santa Barbara Bank and Trust Community Conference Room, which is a beautiful facility and perfect for meetings of this type. Sandwiches and salads were served, the elections went smoothly and the results announced after the presentation. The results of the election should be posted on the SBPA website (www.sbparalegals.org) in the near future. I can guarantee they haven’t had time to update the site just yet!

I want to extend a warm thank you to this great association and group of paralegals for a very warm welcome as well as for their attentiveness and questions. I look forward to having the opportunity to speak with SBPA again soon!

Continuing Reports Regarding Annual Report Scams

2009-10-28T11:18:00.000-07:00

On October 8, 2009, California Attorney General Edmund G. Brown brought suit against six businesses and eight individuals all of whom were involved in scams perpetrated against small corporations and LLCs in the state.

Parasec has been working for at least the past couple of years to get the word out about these ongoing scams and will continue to try to warn our clients about the potential for being deceived by these clever scam artists.

All of the scams involve similar tactics, including the mailing of official-looking documents warning that if the forms are not returned with payment by a certain date, the companies will risk loss of their corporate or LLC status with the state of California. The fees requested in the scams have ranged from $195 to $239.

The forms all carry official-looking seals and come with titles such as: “Compliance Annual Minutes Board,” “Annual Review Board” and “Corporate Filings Division.” Sometimes these perpetrators claim that they will prepare the corporate minutes in return for payment, but the Attorney General has found that when this is the case the documents prepared are insufficient to qualify as legitimate corporate minutes.

While these cases are certainly a step in the right direction towards containing these scams, please stay alert because there are many other companies perpetrating similar types of scams. The scams are apparently quite lucrative and require very little effort. The warning we printed in the latest issue of our Alert resulted in numerous calls from our clients regarding documents they had received from companies similar to these.

Give us a call if you have ANY questions about documents you may receive. It is better to be safe than sorry, especially in these tough economic times. Any correspondence you receive from us will be clearly labeled with either Parasec or Paracorp on the documentation. If you don’t see our name, it’s definitely not from us. We’re happy to help make sure you don’t get caught in one of these scams!

If you do receive any solicitations of this nature, the California Attorney General is interested in seeing the material. Here is the information about where to file complaints:

Attorney General’s Office
California Department of Justice
Attn: Susie Lorden
110 West A Street, Suite 1100
San Diego, CA 92101
PHONE: 800-952-5225
Email: piu@doj.ca.gov

The Alert is out!

2009-07-31T09:43:00.000-07:00

If you notice any changes in the writing style in this latest issue of the Alert, it’s because my assistant, Erin Sierchio, took on the job for me. After years of writing our newsletter with little assistance and only one short break, I’ve finally found the perfect person to tackle this major task. Erin has a degree in English and has been with Parasec now for over a year. During her time with us, she has educated herself about what we do and she is now able to handle the vast majority of the writing requirements.

I will still be actively involved in writing my column as well as in editing and assisting on any articles where Erin is uncomfortable with her knowledge of the subject. I’m looking forward to spending some of my newly freed time developing new and informative continuing legal education seminars, and getting those seminars onto the internet as Webinars, which will allow our clients to access the information more readily.

The Alert will continue to maintain its high standards for providing current and relevant information and we look forward to any input you may have that will help us to continue to improve on our format and presentation.

Read it in its entirety here.

2009 American Recovery Capital Program

2009-07-09T11:55:00.000-07:00

A new program called the 2009 American Recovery Capital Program has been rolled out under the direction of the Small Business Administration. This program will provide interest-free loans of up to $35,000 to small, private businesses. The specific purpose of the program is to offer companies experiencing financial hardship a source of capital to pay principal and interest on existing debt so they can utilize their cash flow to support the business and maintain company jobs.

These loans will be available until September 30th, 2010 - unless the money runs out sooner. Some of the criteria which must be met in order to qualify include:

The company must be a minimum of two years old

The company must be private and for-profit

The company cannot employ more than 500 employees

The company must be able to show a current financial hardship

A financial hardship can be identified in a number of ways, but could include a significant decrease in revenue, total sales or working capital.

For more information about the details of the program, go here. You can also call to talk with a representative who is knowledgeable about this program from 8am to 9pm EST Monday through Friday. The number is 866.947.8081.

Add Indiana to the Growing Number of States Condemning Corporate Harassment

2009-07-06T14:01:00.000-07:00

The Marion County Indiana Superior Court recently issued a permanent injunction against the following companies, preventing them from sending written notices or transmissions that might be confused to be from a government entity:

Indiana Corporate Compliance

International Corporate Compliance, Inc

Papillon Global Marketing, LLC

As in many other states, these notices indicated that businesses were required to pay a record-keeping fee of up to $150 and implied that the notice was from a legitimate government agency. A number of people have acknowledged that they were mislead by these letters and sent in the requested money. A hearing is scheduled to determine if damages will be awarded to the victims of the scam.

Improving Parasec’s Website

2009-06-15T15:59:00.000-07:00

Ask most business owners if creating a company website is a one-time deal and they’ll look at you like you’re off your rocker. Website maintenance is a constant issue for any company with a web presence. Whether it needs optimizing, updating or having glitches removed, improving and expanding your company’s website can be a never-ending process.

In the past, a common complaint with Parasec’s website has been that it doesn’t function well with the Firefox platform. When we originally developed our site, Firefox was a seldom-used platform and therefore it wasn’t taken into consideration during programming. Obviously, Firefox is now a very significant platform and as such we decided it was high time for us to stop and address the issue.

We were concerned that rectifying the problem could become very costly as we really had no idea where the problem lay. It was one of the reasons we procrastinated a bit on taking care of the issue. As it turned out, the problem was identified very quickly and was fixed with a minimum of time and expense. It was at this point that I thought, “Gosh, we should have done this a long time ago!” Then again, hind sight is always 20/20.

So, the great news is that Parasec’s website should be highly compatible with Firefox now. If anyone continues to experience any difficulties, please let us know and we’ll address them immediately. Our thanks for everyone’s patience while we resolved the problem.

Successful CLE Presentation

2009-05-18T16:07:00.000-07:00

For the past month and a half, I’ve been putting together a new ethics-geared continuing legal education seminar entitled Legal Ethics and Corporate Officer Fraud. Researching and preparing for this seminar was fun for me for a couple of reasons:

First off, this is the first ethics seminar I’ve developed, so getting it right was important. And secondly, I find the subject matter extremely interesting and there is so much fraudulent activity currently out there that I had fun sorting through the information.

Wednesday evening I presented the seminar for the first time to the Los Angeles Paralegal Association (LAPA) Corporate/South Bay Section. My thanks to the folks at LAPA for allowing me the opportunity to provide this seminar to their members. This was a great group of people who expressed a lot of interest in the topic and who, I hope, received some good information and thought provoking ideas.

Corporate officer fraud is extremely prevalent in the news these days. As a result, I was able to provide a number of examples of recent cases, all of which included involvement in the fraud by in-house or outside counsel.

The issue for attorneys and paralegals is what action should they take if they become aware of or suspect that corporate officer fraud is taking place in a company they work for or represent. Obviously, attorney-client privilege plays a huge role in the possible actions that are available to an attorney. I discussed the possible options and the issues that should be considered in these circumstances as well as the applicable rules and regulations which may apply.

I thoroughly enjoyed giving the presentation and again want to thank LAPA for inviting me!

CA SOS: Fresno Regional Office Closure Notice

2009-05-05T09:49:00.000-07:00

Effective May 29, 2009, the CA Secretary of State's (CA SOS) Fresno regional office will be closing to the public. The closure comes as a result of the state’s continuing budget issues, which have lead every public agency to look for means of cutting operating costs. Documents which would normally have been submitted at the Fresno office should now be submitted (via mail or in person ) to the Sacramento location (1500 11th Street, Sacramento, CA 95814). Documents may also be delivered to one of the other regional offices, which can be found in San Francisco, San Diego or Los Angeles. If you need assistance with filing or retrieving public documents with the CA SOS, Parasec can help make the process seamless. For a complete list of available services and regional offices, visit CA SOS online.

Corporate Scams Abound

2009-04-29T10:17:00.000-07:00

At this point, none of us should be surprised to discover that yet another state has fallen victim to corporate scams. The most recent alert that I stumbled upon was issued by the North Carolina Secretary of State (NC SOS). According to the PDF released by the NC SOS, a company called the National Companies Register Corporation is mailing “Important Final Notices” to businesses. These notices claim that North Carolina-based businesses are required to nationally register under the Patriot Act of 2001. The required fee? A whopping $487.

The official-looking documents that are being mailed out contain elements of the North Carolina Seal, which is very deceptive. NC SOS warned that no such governmental national registry exists.

The NC SOS is asking businesses to report any fraudulent notices that ask you to “register your business in a national database to avoid dissolution of your corporation.” Here’s how to report it:
1. Keep the notice, mailing envelope and return envelope.
2. Contact the United States Postal Inspections Service to report mail fraud at:
877-876-2455 or http://postalinspectors.uspis.gov (investigations drop down menu – mail fraud – file a complaint)
and
Contact the North Carolina Department of the Secretary of State, Attention: Horace Farrar at 919-807-2040 or email at hfarrar@sosnc.com.

As always, we are interested in identifying and notifying our clients of additional scams so please let us know if you receive anything suspicious.

Legal Ethics and Corporate Officer Fraud seminar

2009-04-24T11:37:00.000-07:00

Here's a little information on an upcoming seminar that I am giving on Legal Ethics and Corporate Officer Fraud. The seminar, which will be presented by the Los Angeles Paralegal Association (LAPA) will be held on Wednesday, May 13th 2009 at the Del Amo Room in Torrance.

LAPA’S Corporate/South Bay Section presents:

Legal Ethics and Corporate Officer Fraud

LAPA is a State Bar of California approved MCLE provider and certifies that this seminar is approved for 1 hour of credit in ethics.

Lynn Conner, the President of Parasec, a public records research company, will speak at the May 13th LAPA Corporate/South Bay seminar. Ms. Conner will relay details about what constitutes fraud and what types of fraud can be perpetrated by corporate officers in today’s business and legal environment. The temptation for fraud is always present and given the right circumstances, it can be easy for individuals to fall prey to that temptation. Discover how to detect fraudulent activity, comply with the Rules of Professional Conduct as it relates to corporate officer fraud, and gain valuable knowledge about the actions you should take if you have suspicions.

Lynn Conner has been with Parasec for more than 20 years, and has been the president for 16 years. Her background includes a Masters in Business Administration. Lynn is a member and past president of National Public Records Research Association (NPRRA) where she was influential in redirecting the association’s mission to encompass the world of technology and the
internet. Wednesday, May 13, 2009

More information can be found here.

Texas Corporate Scams

2009-04-23T14:51:00.000-07:00

Joining the list of states to fall victim to corporate scams is Texas (see my earlier post on Nevada Corporate Scams). Last month, the Texas Secretary of State (SOS) released an alert regarding an entity calling itself “Compliance Services.” The company is targeting Texas-based business entities, mailing them solicitations titled “Annual Minutes Requirement Statement.” The official-looking documents imply that entities are required to complete the paperwork and return it along with a $125 fee.

Please know that you are not required to fill out this solicitation. These forms are not a requirement of the Texas SOS and Compliance Services is in no way associated with the Texas SOS. The solicitation does contain a disclaimer stating that is not affiliated with the Texas SOS, but because the materials look legitimate, it is still confusing to business owners. According to the alert issued on the Texas SOS site, “It appears that confusion has resulted from Compliance Services’ solicitation and the suggestion that the statement is necessary to avoid non-compliance with Texas law.”

Whether you choose to do business with Compliance Services will in no way affect your status with the SOS. Official statements or requests from the Texas SOS will always bear the state seal and the name of Hope Andrade, the Texas Secretary of State.

If you’re a Texas business and have a solicitation from Compliance Services, have sent money in response to the solicitation or have received a similar solicitation, you may file a complaint with the Texas Attorney General.

We continue to be interested in identifying and notifying our clients of additional scams so please let us know if you encounter anything suspicious.

Post 9/11 Due-Diligence Searches

2009-04-16T11:55:00.000-07:00

Since September 11, 2001, new requirements for due-diligence searches have emerged to ensure that banks and other individuals know with whom they are doing business. No one wants to be party to assisting terrorists, money launderers or people trying to avoid paying taxes or adhering to economic sanctions laws.

These searches are now a necessary part of all financial transactions and some may be expanding in the near future to encompass any entity formation transactions. Some of the searches which are currently required in financial transactions include:

1. Searches of the Specially Designated Nationals (SDN) list – This is a list maintained by the U.S. Treasury Office, specifically the Office of Foreign Asset Control (OFAC). Names of all parties involved in the transaction must be checked against the SDN list to ensure that no business is being done with anyone whose name appears on the list. The list includes names of “individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.”

Any apparent matches must be researched and reported to OFAC and they will notify you whether the match is in fact legitimate. If it is, you will not be able to proceed with the transaction with that individual involved. The requirement to check the SDN list was implemented as part of the Patriot Act in the aftermath of 9/11.

2. Searches of ANY list distributed by the federal government naming terrorists, money launderers or individuals avoiding payment of taxes or economic sanctions - The SDN list is by no means the only list of sanctioned companies and individuals maintained by the federal government. All available lists must be checked to ensure that business is not being transacted with any sanctioned individual or company. Trying to identify and check each of these lists can be a nightmare.

Fortunately, there are companies which specialize in these required due-diligence searches and Parasec has a good relationship with a nationally recognized firm in this area. Let us know you are in need of a due-diligence search of this type and we can make the necessary connections for you.

Senator Levin introduces SB 569

2009-03-25T15:09:00.000-07:00

On March 11, 2009 Senator Levin introduced a second bill, SB 569, titled the "Incorporation Transparency and Law Enforcement Assistance Act." This bill looks to obtain beneficial owner information for all corporations and LLCs formed in the United States.

Each state would be required to obtain a list of all beneficial owners of each corporation or LLC formed, maintain the information for 5 years after the entity is terminated, update the information annually and provide the information to law enforcement when presented with a subpoena or summons. The states would not be required to actually verify the ownership information provided to them.

If a U.S. corporation or LLC is formed by a non-U.S. person, the bill would require a formation agent in the state of formation to verify the identity of the non-U.S. beneficial owners by obtaining their names, addresses and passport photos. The formation agent would then issue a written certification which would be presented to the state with the formation documents.

Each state would be able to determine whether it chose to make beneficial owner information public record or keep that information private. In addition, the bill allows states to draw on funds available through the Department of Homeland Security to pay for the changes and ongoing costs associated with these new requirements.

Finally, SB 569 would require the Department of the Treasury to issue a ruling, within 90 days of passage of the bill, establishing anti-money laundering programs to be followed by formation agents. There is no identification of what might be included in the ruling and how far the requirements might go.

Read the text of SB 569 here.

I’m also including two definitions from the text of the bill for clarification of what beneficial owners and formation agents are defined to be.

BENEFICIAL OWNER- The term "beneficial owner" means an individual who has a level of control over, or entitlement to, the funds or assets of a corporation or limited liability company that, as a practical matter, enables the individual, directly or indirectly, to control, manage, or direct the corporation or limited liability company.

FORMATION AGENT- The term "formation agent" means a person who, for compensation, acts on behalf of another person to assist in the formation of a corporation or limited liability company under the laws of a state.

The Stop Tax Haven Abuse Act

2009-03-20T13:17:00.000-07:00

On March 2, 2009, Senator Carl Levin introduced Senate Bill 506, the “Stop Tax Haven Abuse Act” to the floor of the senate. The 80-plus page bill is supported by the Obama administration and an identical bill has been submitted to the House of Representatives (HR 1265). This bill is specifically aimed to eliminate loop holes that allow U.S. citizens to use offshore banks to hide money and evade paying taxes.

Buried in the bill, in Section 203, “Anti-Money Laundering Requirements for Formation Agents,” is a definition of what “formation agent” are: “persons involved in forming a new corporations, limited liability companies, partnerships, trusts and other legal entities.”

The bill then goes on to state that no later than 90 days after enactment of the bill, the IRS, the Securities and Exchange Commission and Secretary of Treasury will confer and publish a proposed rule requiring formation agents “to establish anti-money laundering programs.”

There is no hint as to what might be required under these programs, but it’s a good bet that screening of clients against watch lists, maintaining data records and reporting of suspicious activities or matches with a watch list will be among the requirements.

This bill is very vague and therefore is of great concern because we will have little knowledge of and input into the process of developing the programs which will ultimately be imposed on us.

Nevada Corporate Scams

2009-03-12T16:12:00.000-07:00

As I mentioned in an earlier post, corporate scams are becoming more and more prevalent in today’s world. Here is an example of a recent scam in Nevada that was sent out with the intention of purposely misleading companies for a profit.

The state of Nevada requires that all Foreign Corporations publish an “annual statement” no later than March each year in a Nevada newspaper with a circulation of at least 1000. The only entities in Nevada required to do this are Foreign Corporations. Domestic Corporations, Limited Liability Companies and Limited Partnerships are not bound by this requirement. Here are a few definitions just for clarity sake:

Nevada Domestic Corporation – A corporation that has filed their incorporation documents in the state of Nevada.

Nevada Foreign Corporation – A corporation that has filed their incorporation documents in some state other than Nevada but has filed the appropriate qualification documents to do business in Nevada.

Annual Statement – A document required to be published annually by Foreign Corporations in the state of Nevada. Minimum information to be included:
1. Corporate name
2. Name and title of corporate officer submitting the statement
3. Mailing or street address of the principal address of the corporation
4. Mailing or street address of the corporate office in Nevada, if applicable
5. Total assets and liabilities of the corporation at year end

Publication – Printing of the annual statement in a Nevada newspaper with a circulation of at least 1000.

The scam:

A Nevada-based company sent out pre-completed forms to corporations (both foreign and domestic), LLCs and LPs. The form states that it is a “Final Notice” and the deadline is March 31, 2009. It gives instructions to “Submit the Form with $24.95”. The implication is that this is a required filing. Nowhere does the form state that only Foreign Corporations are required to publish an annual statement.

I have also heard that the company sending these forms out is not even a newspaper with a circulation of more than 1,000. So, even if the form reaches a Foreign Corporation and that corporation sends in their $24.95, they have not met the statutory publication requirements.

Keep an eye out for these types of manipulative mailings. With so many statutory requirements in each state and for each type of entity, it is extremely easy to be caught in one of these nets. If you are unsure about something you have received, contact your Registered Agent for assistance with identifying whether the mailing is legitimate. If you have already been scammed, it is recommended that you contact your state’s Attorney General’s office. They probably already have information about schemes that are ongoing.

10 Tips for Maximizing Your Vendor Relationships

2009-03-09T13:33:00.000-07:00

We’re a couple of months into the new year and chances are good that many of us have already broken some of our New Year’s resolutions. Don’t fret; it’s never too late to start evaluating our daily routines and habits in an attempt to improve our lives. Why not start by developing some work habits that can save you time and relieve stress? My company, Parasec, has developed 10 tips for cultivating your vendor relationships. We suggest that you print this out and use this as a guide for helping you maintain a happy, beneficial relationship with all your vendors. This is one resolution that pays to keep!

1. Understand That Service is Not “Selling” – Don’t fall into the trap of vendors who are obviously just trying to sell you more services than you need. Take the time to communicate your needs and expectations – a truly service-oriented vendor will be genuinely interested in understanding your needs so he or she can successfully address them in an appropriate manner.

2. Establish a Partnership - Talk about your basic expectations and educate your vendor about your firm’s culture and your own work process. This will help establish clarity in your working relationship. Get any questions or concerns addressed up front, and communicate that teamwork between the two of you is key in getting the job done.

3. Communicate, Communicate, Communicate! Legal professionals must provide vendors sufficient information to get the job done adequately. Share information with your vendor so they will understand how they can best serve you, even if you don’t think a particular detail will make a difference. Ask your vendor to re-iterate your request back to you to make sure what you have said has been heard correctly.

4. Be Honest, and Expect Honesty in Return - Provide honest details in establishing true, accurate deadlines whenever possible and giving precise details as to what the finished product or solution should look like. This will ensure that your vendors can assess whether they can help and under what terms. By the same token, you’ll want your vendor to be honest enough with you to bring up possible problems, limitations, or alternatives – even if it means referring you to another resource if necessary to meet your parameters.

5. Plan Ahead - Either out of skepticism, lack of time or inexperience, many legal professionals don’t get their vendors involved early enough in the process. Planning ahead can help ensure that your project goes smoothly and that important deadlines can be met.

6. Don’t Be Afraid to Ask Questions - Some legal professionals don’t realize that as much experience as they might have, vendors often have more experience and knowledge in their specific specialized areas. Vendors’ knowledge can be invaluable because they deal with certain situations daily that some legal professionals encounter much less frequently – say only once a week, once a month or even once a year.

7. Demand Quality Control – Your vendor should have a quality-control process in place. Even the slightest error on documents submitted to agencies may result in delays and unexpected results. Inquire as to what kind of quality assurance your vendor offers.

8. Expect Pro-Active Error Resolution – Even with systems in place to ensure a job well done, mistakes occasionally do happen. Any vendor that says otherwise is being unrealistic, and is unprepared or reluctant to be flexible when an error occurs. It’s important that your vendor handles the situation properly. A vendor should practice pro-active problem solving with clients, and have procedures in place that allow its staff to make amends for any problem resulting from a mistake.

9. Rely on Your Vendor For New Resources - Ask your vendors to remind you of their other services that you might not need as frequently, or that you currently fulfill via a different vendor. If you have established trust with them, and they know how you like to work, it’s easier for you to work with fewer vendors. Often times if your vendor can’t provide the service themselves, they will happily suggest another resource who can. If you trust your vendor, chances are good that you can trust their recommendations.

10. No-Surprise Pricing – There should never be surprises when it comes to what services you’re getting for the price you are paying. Make sure your vendor is providing you with an itemized invoice, so it’s clear what you (and ultimately your client) are paying for – including document fees and service charges. A breakdown approach to invoicing can save you from paying for services you may not have used.

A Word About Outstanding Employees

2009-02-27T08:01:00.000-08:00

Above is a recent photo of Parasec’s Sacramento office staff. What a wonderful group of people we have working with us -- not only in Sacramento but also in Delaware, Los Angeles and Nevada! I just want to spend a brief few minutes talking about these remarkable people.

It has often been said that the hardest part of management is dealing with employees and I certainly agree that the most difficult and stressful situations in business frequently revolve around issues with staff. But, when you have good employees who care about the business and about their fellow employees, management becomes a whole lot easier and the rewards of employees far exceed the headaches. That is the case with Parasec. We have, over the years, brought together an incredible group of hard-working and dedicated individuals who perform miracles when needed for our clients, work harder than they have ever worked at any other job and have a lot of fun while doing it.

These individuals have not only learned how to do their jobs exceptionally well but they have also learned about the basics of how a business is run and have willingly brought new ideas and creative thinking to those situations that needed a new vision. When there are difficult decisions to be made, I often share the facts with everyone and ask for suggestions because they are on the front lines and usually have a better perspective and understanding of the situation than I ever will. The solutions that arise as a result are always better than my management team and I could come up with completely on our own.

This is a difficult time as a result of the economy. Parasec’s absolute number one priority for our staff is and always will be job security. With that in mind, we have recently cut back or eliminated many of the little perks that all of us have grown used to. We don’t know how deep the recession will go or how long it will last so we want to be proactive about deeply cutting our expenses to ensure we can retain all of our employees no matter what happens in the economy. We got some wonderful ideas from staff that we would never have thought of ourselves on additional places to cut and ways to avoid expenses. People got on board and helped us trim fat that we didn’t even realize was there.

I just want to thank all of Parasec’s employees for their commitment, their dedication and their willingness to question everything and share their suggestions. I’ve never worked with a better team and I’ve never been more proud of any group of people than I am of the current Parasec staff. If the economy is going to turn around as a result of the hard work of U.S. employees, then Parasec employees will be leading the way!

Pending Changes to Nevada Corporate Law

2009-02-25T14:12:00.000-08:00

Nevada’s legislature, which only meets every other year, is currently in session and is contemplating SB 55, which proposes several changes to commercial recordings in that state. Let me give you a brief overview of the potential changes this bill would enact.

This bill would change the law to permit an entity, under certain circumstances, to cancel a filing that has been submitted to the Secretary of State. In order for this to be allowed, there are two criteria which would need to be met:
1. The filing could not have been processed and placed into the public record by the Secretary of State at the time the request to cancel was made.
2. Any required fee must have been paid.
The method of communication of the request would be a Statement of Cancellation and the proposed fee would be $50.

The bill also proposes that an entity could “correct” a filing which contains an inaccurate description, or if the document was incorrectly signed, attested, sealed, verified or acknowledged. The method to correct the document would include filing a Certificate of Correction, which would include the following information:
1. Name of the entity
2. Description of the record to be corrected, including the filing date
3. Identifies the error or defect
4. Restates the section to be corrected in accurate form
5. Must be signed by an officer of the entity or by the incorporator or director if no stock has been issued (in the case of a corporation).
The cost to file a Certificate of Correction is proposed to be $175 and the date of effectiveness is the date of filing of the original document -- unless someone has relied on the incorrect record. For those individuals, the effective date would be the date of the filing of the Certificate of Correction.

SB 55 would change the current requirement that an appointment of a registered agent for service of process be accompanied by a Certificate of Acceptance of Appointment from the registered agent. The new procedure would be that the filer would be required to include a declaration that the registered agent had accepted the appointment. This declaration would be made under penalty of perjury. In addition, if the registered agent had not in fact accepted the appointment, they could within 30 days, file a Statement of Rejection of Appointment at no cost.

In addition, SB 55 would allow the Secretary of State to notify corporations of their Annual List due date via any appropriate method of communication rather than solely by mail as the law currently reads.

A requirement would also be created that any entity would have to maintain a current list of its owners of record at its registered office or principal place of business in the state. If they choose not to maintain the list at that location, they would be required to maintain a statement identifying where the list is kept. This list would be required to be provided to the Secretary of State upon request.

Also, the law would allow entities whose right to transact business in the state of Nevada has been revoked, to dissolve the entity by filing a Certificate of Dissolution and paying the required fee which is proposed as $500.

This is just a very brief overview of a few of the changes proposed by Nevada SB 55. For more a more in-depth understanding of the potential ramifications of this bill, please read the full text of SB 55.

SB 55 was introduced on December 8, 2008 and was referred to the Committee on Judiciary. It was read to the committee on February 2, 2009 and we will need to monitor its progress to determine how and when these changes may affect us.

LAPA Seminar Recap

2009-02-13T14:41:00.000-08:00

Last night I presented a Continuing Legal Education (CLE) seminar to members of the Los Angeles Paralegal Association (LAPA). The seminar topic was Senate Bill 2956. I present a lot of these CLE seminars and have found that I really enjoy being a speaker and educator. The travel that is often involved can get to be a little tiring, but overall the experience is very rewarding.

Last night’s seminar was especially fun because I know a number of the members of LAPA. It was great being able to reconnect with long-time business partners as well as meet new people. All that socializing, plus I was able to help them meet their educational requirements with, hopefully, some very interesting material.

One individual I met was Sue Ann Jaffarian, an author of mystery novels whose protagonist, Odelia Grey, is a paralegal. Another woman I met last night is moving into the legal field after years as a photographer/photography teacher. Also in attendance, was a long time colleague of mine who I discovered is a guide-dog trainer and her current puppy-in-training was with her. Many of the people I met were in different stages of their business life. One woman had recently finished a paralegal program and is now looking for a position; another was recently laid off and, after taking a bit of well-deserved time for herself, will soon begin her job hunt; a third person recently moved from the litigation arena to the corporate field and is working to educate herself in her new specialty. I discovered all of this before I even got up to give my presentation. What a wonderful group of diverse professionals and I only managed to talk with perhaps half of the individuals who attended. I wish then all the best of luck in their careers and hope that the shaky economy treats each of them well.

The crux of my seminar revolves around the current efforts being made at the federal level to pass legislation which will require those who are forming corporations and Limited Liability Corporations (LLC) to provide “beneficial owner” information. The beneficial owner is the individual or individuals who will receive the primary benefit from owning the company. Currently, that information is not required when forming a corporation or LLC. Senate Bill 2956 was proposed to force all states to require that information to be obtained and updated on at least an annual basis.

The bill has now lapsed with the end of the 110th Congress on December 31, 2008 but it is expected that a new bill will be introduced once congress manages to focus on something other than the Economic Stimulus Package. I will pass on information about any new bill that is introduced as I hear about it.

P.S. Sue Ann Jaffarian’s fourth Odelia Grey mystery, Booby Trap, has just been released. Her other Odelia Grey mysteries include; Too Big To Miss, The Curse of the Holy Pail and Thugs and Kisses. I’ve just ordered all four books from Amazon where the reviews are all outstanding!

How to Avoid Corporate Mail Scams

2009-02-11T13:04:00.000-08:00

This is my first experience with blogging so bear with me as I learn what I’m doing.

I want to talk this first time about the corporate mail scam that is becoming so prevalent these days. Because individuals with Corporations and Limited Liability Corporations are busy running their companies, they are often not particularly familiar with the forms and documents that are required to be filed annually to maintain their good standing with the state. This provides an incredible opportunity for unscrupulous people to take advantage of the situation.

Official looking documents are prepared and sent to lists of companies with formal sounding names such as “Corporate Compliance Center,” “Board of Minutes and Resolutions” and “California Corporate Compliance.” The document implies that if you do not complete the form and return it with the fees stated your entity will lose its good standing in the state.

Individuals who are trying their best to ensure they comply with the legal requirements in their state are seduced into completing the form and returning it with the $125 fee. One of two things then happens. Either the scam artist takes the money and disappears or they take the information provided on the form and change the company’s Registered Agent for Service of Process with the state to themselves. The Registered Agent service is something that is billed annually and often the company that was scammed doesn’t realize the change was made until a year later when they receive an invoice for services from the new company. It can be expensive and time consuming in many states to change the Registered Agent back.

This is a very frustrating scheme because the forms look very official and it is so easy for people to be lured in even when they have been warned to be on the look out. It’s hard to track down the offending company because they don’t include phone numbers or if they do the number goes to a machine that doesn’t even allow a message to be left.

The USPS is looking into this scam as well as several Attorney General offices in various states, but that's always a slow process and new variations keep appearing regularly.

Let me know if you or someone you know has run into these scams. We can help you identify if the documents you have received are legitimate and if you’ve already been scammed, we can help you change back to the Registered Agent of your choice.

I’d love to find a way to use blogging to help people avoid these problems. Let’s share ideas.