California Filing Fees Increase to Cover Copying Charges

At Smart Business Incorporation, we deal with all of the states for regular and new business document filings. Something we’ve noticed recently is a move towards state fee add-ons, often in places we didn’t expect.

For example California has started adding on a mandatory “copy” fee now. Up until December 31st, if you sent in documents for filing, standard procedure was to send an extra copy and a stamped, addressed envelope. The state would send you back a stamped document copy for your records.

However, we have learned that providing both the extra copy and a stamped return envelope isn’t enough anymore. The state also wants a dollar per page “copy” fee, plus another $5.00 if you want your copy to be certified. This is now required on all filings with fees of $24.99 or less – including your annual Statements of Information.

So, can you just submit documents and hope for the best? Yes. But there are several reasons why you want stamped documents in your personal records. For example, in an audit, the IRS will ask to see your corporate records binder. You want it to be complete. In any legal proceeding, first thing you’ll be asked to produce is your corporate records binder, to confirm that your business is properly formed and in good standing. Not having stamped documents here can cause confusion. And banks are demanding to see stamped Statements of Information in connection with opening up accounts. In fact, we’re hearing from a growing number of CA-based clients that banks are reporting new accounts to the Secretary of State, and telling clients the documentation is something the Secretary of State wants to see.

Getting copies of documents later can be time consuming. If you have ever dealt with the Secretary of State in California, you know that it’s pretty much impossible to speak with someone over the phone. Budgetary concerns have kept the state’s system static over the past decade, meaning there is no way to access copies of documents you have filed online. Only manual search and copy requests are allowed at this time. Plus, standard document submissions like Statements of Information for LLCs can take 3-5 months to process and be returned, meaning you may request copies of documents that haven’t been processed yet, even though they were submitted weeks or months earlier.

So, be aware, and be prepared. States can’t raise filing fees without legislative approval, but are always looking for more revenue. Creative increases, like California’s copy charge, are one way to extract a few more dollars from business owners.

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

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