Have You Received Mail from Corporate Controllers Unit?

Every year there is a massive fraud perpetrated on U.S. business owners. Typically the process involves you getting an official-looking notice warning you that a state filing is due, and promising dire consequences if you don’t comply. The letter also offers a helpful do-it-for-you service, usually for about $225 or so.

The problem is, you’re being scammed.

What the Notices Look Like

Usually the notices are made to resemble the state’s document. The most recent one I got (for one of my clients) was from a company calling itself Corporate Controllers Unit, out of Denver, CO. In this case, there was an official looking seal in the top left-hand corner, and it was headed up Periodic Report – Directors/Shareholders – Colorado Corporate Control # … The number itself belonged to my clients – the company got it by searching the Colorado registry, where the information is readily available.

The form then goes on to toss out a couple of “pursuant to Corporation Code section XXX a Periodic Report must be filed” references,and then warns that companies who fail to file on time will receive a non-compliant or delinquent status in Colorado. Then, in big bold letters, it tells you to complete a few pieces of information about the company and to return the form with the ANNUAL FEE OF $225 (upper case bold). It also has a Reply By date of April 15th, in big, bold letters.

In smaller print, towards the bottom, the company does add a disclaimer that they are not a government agency, and that the letter is a solicitation for services.

The Truth Is …

Colorado does have annual report filing obligation for all companies who are formed in Colorado, or are registered into CO as foreign entities. However, the Annual Fee is only $10, and you can make the filing yourself, online, in just 2-3 minutes.

Plus, the state will notify you about 2 months before your company’s report is due, by sending out a postcard or email notification. In the case of my client, their next periodic report is due in September, not April 15th.

What Should You Do If You Get a Notice Like This?

If you get a notice like this, DO NOT SEND ANY MONEY – YOU WON’T GET IT BACK.

Instead, contact your current resident agent (if you are using a 3rd party service) and ask them if it’s legit. Alternatively, or if you’re acting as your own resident agent, go to your local Secretary of State’s website and look up your company to make sure it’s in good standing and you haven’t missed your next Annual Report filing date.

Once you’ve done that, you can also notify your Secretary of State’s office about the scam, so they can post something on their website.

I’ve seen this type of notification played out in just about every state over the years. California is hit hard on a regular basis, along with Florida and North Carolina. In fact, if you check your local Secretary of State’s website, the chances are you’ll see some kind of warning about one of these companies.

These scam operators get shut down on a regular basis. The problem is, like mushrooms, they spring up somewhere else under a new name, playing the same old game.

Be a smart business owner! Read the fine print, and double-check the facts BEFORE you write that check.

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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