FRAUDULENT FILING FEE REQUESTS (Cont.)

Other warning signs of fraudulent letters sent to business owners by the bad guys regarding the California Corporations Code filing are:

• References or quotes to Corporation Code sections inapplicable to the type of entity being solicited, such as Code sections applicable to corporations when soliciting a limited liability company;
• References an "annual fee" or "annual payment" rather than a filing fee and that is far in excess of the filing fee for a Statement of Information;
• Indicates the submitted information will be treated as private and confidential.

We are all working hard to keep customers happy. Customers are our life blood.

Here is some official information for any business receiving one of these letters: Statement of Information forms and instructions are available through the Secretary of State's website here http://www.sos.ca.gov/business, and the fee required to file the Statement is $25 for California stock and foreign corporation, and $20 for California nonprofit corporations and all limited liability companies.

Fraudulent Filing Fee Requests

A new pattern of criminal activity raised its ugly head in California. The Attorney General won a $1.2 million award against rip-off artists. Everybody should keep an eye out for that.

The rip-off revolves around a deceptive letter sent by the bad guys, encouraging businesses to comply with their California Corporations Code filing obligations. The bad guys sent a deceptive letter which suggested that the businesses comply with their California Corporations Code obligations by submitting substantial fees to the third party.

This was reversed by the court. The court held that the defendants omission caused the plaintiff to file an untimely claim by the delay.

The letter is often characterized by the following:

• Appears similar to a Secretary of State form (generally the Statement of Information form), containing an official-looking seal;
• Implies that failing to return the form and pay the requested fee may place the business in legal jeopardy, or might cause the business' filings with the California Secretary of State to be in default or noncompliant status;
• Contains a reference to a "file number," "Corp Number," "Corporation Number," or "Control Number" that does not match the number assigned to the entity by the California Secretary of State;

MORE EXAMPLES AND HITS WILL BE GIVEN IN OUR NEXT BLOG

Advice For Contractors

If you are not a licensed contractor, and you are working as if you are licensed, you stand a strong chance of being caught and severely disciplined. Indeed, if you are an unlicensed contractor, and you do work for an owner, the owner can wait until you finish the project, and require you to pay back everything that you received from the owner, even though you did the work correctly. That is because what you did was illegal.

Make sure that everything that you do is in writing so that there is no dispute as to what you are supposed to do or not do.

Visit trade shows. Typically, they are free and have a great deal of information.