Reduce Corporate Filing Rejections by Avoiding These Common Mistakes

Whether establishing a new business entity or expanding operations into a new state, a rejected corporate filing can be costly, not to mention frustrating. What follows is an overview of the top five reasons for rejection of formation or qualification documents.

1. Name is Not Available – A new business name must be unique. When a formation or qualification document is submitted for filing, the filing office will check the business name against existing entities in their jurisdiction and will reject a document that lists a business name that is the same, or deceptively similar to that of an existing entity in that state.

2. Incorrect or Outdated Form – Business filings must be submitted on the appropriate form for that state and entity type. A filing that is submitted for filing on an incorrect or outdated form will be rejected by the filing office. Keep in mind, states frequently make changes to their forms; the form you used for a previous filing may now be out of date.

3. Supporting Documents Not Included – In most states, a foreign qualification filing must be accompanied by evidence of the entity’s formation in its home state – usually a certificate of status, though specific requirements vary by state and entity type. A state filing office will reject a qualification filing that does not include the required supporting documents.

4. Missing or Non-Conforming Signatures – States establish rules for who may sign certain documents and what additional information must be provided about the signer. A document that is missing a required signature or does not conform to the state’s signatory requirements will be rejected by the filing office.

5. Proper Fees Not Remitted – The state will reject a document if the proper filing fees are not remitted. Keep in mind that the filing fee may be only a portion of the amount due. Some states have additional fees due at the time of filing including handling fees, prepayment of taxes, certification fees, expedited fees and more.

Trust CLASCORP™ with even your most complex business filing projects. Our highly trained staff of corporate experts can reserve your preferred business name for your exclusive use and will perform a thorough review of your document prior to submission to help guard against rejection.

Is UCC E-filing the Right Choice for Your Organization?

These days, nearly every state filing office accepts some form of electronic filing (E-filing) for UCC documents, often either through xml transmission or a fillable web form. Some states are even beginning to mandate E-filing for UCCs. Back in 2012, Colorado became the first state to require that all UCC filings be submitted electronically. New Jersey has now followed suit and will require E-filing for all UCCs beginning July 1, 2015.

In recent years, E-filing has been gaining popularity among lenders and other high-volume UCC filers owing to a couple of key benefits. First, E-filing is a great way to reduce UCC filing costs. That’s because most states charge a lower fee to file a UCC that is submitted electronically than they do for a paper document that is presented for “over the counter” processing. Consider Delaware, for example, where a one-page, single debtor UCC Financing Statement submitted in paper form will incur a $100 filing fee while that same document submitted electronically will incur a charge of only $30.

E-filing UCC documents not only saves money it also saves time. A paper filing is subject to indexing backlogs and other processing delays at state filing offices, which can slow the turn-around time for acknowledgement. A filing that is submitted electronically requires little (if any) filing officer involvement though, so it is often assigned a date and file number much more quickly. In fact, most E-filed UCCs are acknowledged within 24 hours – sometimes even sooner.

Despite these benefits, some UCC filers have been reluctant to adopt E-filing over concerns about formatting changes that can occur with electronically filed UCC documents. Here’s why.

If you elect to begin E-filing your UCCs, it is important to be aware that the acknowledgement copy you receive back from the state may look different from the document you prepared. In many states, an electronically filed document will undergo minor changes during the submission process. These can include converting text to ALL CAPS, changes to font style or size, adjustments in spacing or formatting of collateral descriptions and more.

UCC experts agree that these changes are purely cosmetic and will not compromise the effectiveness of the record, but it is always best to know what to expect when making a change to an important business process.

Ready to Start E-filing?

The CLASCORP™ UCC eZFILE system offers E-filing in every state that accepts UCCs electronically. That’s over 40 filing offices nationwide! As an added benefit, every document submitted through UCC eZFILE is reviewed by one of our highly trained UCC experts to catch potential filing errors, reduce rejected filings and save you money. Contact CLASCORP™ today at 800.737.8012 or orders@clascorp.com to schedule a free system demonstration!

CLASCORP: New Business, Seasoned Veterans

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CLAS Information Services, a worldwide provider of public records search, filing and retrieval services, announced today that they have opened a new affiliate office, CLASCORP, LLC in Olympia, Washington.

CLASCORP offers the full spectrum of due diligence solutions for lending and legal professionals including lien searching, corporate filing and retrieval services, registered agent representation, document recording and publishing, real property research and more.

CLASCORP is managed by a team of industry veterans including Melissa Hopton, Director of Sales, Chris Hopton, Director of Operations and Cheryl Westby, Client Relations Manager.

“Together, this group represents over 75 years of public records experience,” says Judy Kahler, President of CLAS Information Services, “I am confident that their background and insight will help us expand our service offerings and develop new tools for our valued clients.”

CLAS Information Services formed in Sacramento, California in 1980 and quickly became a leading provider of UCC and corporate due diligence services to local law firms and commercial lending institutions. Since then, CLAS has extended its reach considerably and presently maintains support facilities in Los Angeles, California, Dover, Delaware, London, U.K. and now Washington State.

“I have known and admired CLAS for years,” explains Melissa Hopton, Director of Sales at CLASCORP, “I am excited to be a part of the CLAS family of companies and look forward to spearheading our sales efforts here in Washington and across the country.”

Parties interested in learning more can contact CLASCORP at 1-800-737-8009.