Received Mail from California Business Renewal Center?

Spring has sprung, and that means a new year of old scams is beginning to crop up. This week I received mail for dozens of clients from a company calling itself California Business Renewal Center. If you own a California business and you get mail from these people, ignore it. It’s a scam.

(Click the link to see an example of the letter)

The letter I got spouted some small print about the requirement for all California entities (in this case LLCs) to file a Statement of Information once every two years.

The mail then goes on to ask you to complete the form with the information needed for the Statement of Information and send it back to the company, along with your check for $175. On the back of the page is more excerpts from California law, including scary language about a $250 late fee (which I’ve never seen assessed in all my years of doing this), and the statement that upon receipt CBRC will prepare and file your LLC’s Statement of Information in a timely manner. That’s slightly offset by the small print at the bottom saying that CBRC isn’t responsible for late filings.

Now there is a small disclaimer on the front page that does state that the letter is a solicitation and you have no obligation to follow through. But it’s small, and dwarfed by all of the other stuff going on.

So, here’s the truth. Yes, LLCs do need to file a Statement of Information once every 2 years. Unfortunately, LLCs aren’t eligible to use California’s online filing system for Statements of Information. Presumably that’s because the state’s system is set up just for Corporations, who must file this report every year.

The due date will vary from LLC to LLC, and usually will fall around the anniversary month of formation – so if you created your LLC in June, you will be filing the Statement of Information in June every other year after that. But it doesn’t cost $175. It costs just $20, and you can download the report form directly from the Secretary of State’s website, here.

This type of a scam happens across the country, and on just about every Secretary of State’s website you’ll find some kind of warning or disclaimer about how to spot the fakes from the true Annual Report forms. But basically, if it doesn’t come from the Secretary of State’s office, or your commercial resident agent’s office (assuming you have a 3rd party service acting as resident agent and you aren’t doing it yourself), then it’s probably okay to ignore it. You can always ask your resident agent if in doubt. Where the letters go directly to your resident agent (as happened in the case for my clients), your agent will probably sort the mail and file this one in the round filing cabinet.

If you act as your Corporation or LLC’s resident agent directly and get one of these, then read it carefully. Make sure you can verify who sent the correspondence to you. Look at your corporate records to see if you have already filed the Annual Report. Call your Secretary of State’s office if you aren’t sure. Whatever you do, just keep your checkbook closed until you know who you’re dealing with and whether or not a renewal charge is legit or not.

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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