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 Incorrect or Outdated Form – Business filings must be submitted on the appropriate form for that state and entity type. A filing that is submitted for filing on an incorrect or outdated form will be rejected by the filing office. Keep in mind, states frequently make changes to their forms; the form you used for a previous filing may now be out of date.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