POTENTIAL SCAM ALERT: Beware of Misleading Compliance Solicitations

December 31, 2015


It is becoming increasingly common for corporations, limited liability companies, and other entities formed or qualified to do business in various states to receive misleading compliance solicitations from non-governmental organizations. These potential scam attempts can be especially popular this time of year and may reference a need for annual reports or some other periodic business filing. They also frequently threaten that failure to respond quickly and pay a fee may result in fines or the dissolution or invalidation of the company. These may come in the form of a postcard, letter, or even an email. The notices often appear official and as if they were sent by the state or a legitimate government agency, sometimes referring to a “Compliance Division” or “Corporate Records Service” or some other non-existent State department or agency.

These solicitations may constitute a dishonest attempt to gain private information about your company, to defraud you out of the claimed fee, or to charge an inflated price for services and documents you can obtain directly from the applicable Secretary of State’s office, Department of Labor, or similar legitimate government office. The names of these government agencies may vary from state to state, but their official names can be easily verified.

Most recently, a client received a notice from “United Business Services” that it had not filed or received a “Certificate of Existence,” in Nebraska, implying that the company was invalid or not authorized to do business without it. In Nebraska, a Certificate of Existence can be obtained directly from the Secretary of State for a small fee to evidence a company’s good standing. However, a company is not required to have this document to be duly incorporated or organized in the State of Nebraska and to be authorized to do business in the State. Another client received a similar mailing and, when contacted, the service offered (for a fee) to obtain for the company certain workplace posters required to be displayed by labor and employment laws. However, these workplace posters are directly available on the Department of Labor’s website at no charge. In the past, these types of organizations have also sent compliance notices to corporations claiming that annual meeting minutes are required to be filed in order to maintain proper records. While biennial reports are required to be filed with the Nebraska Secretary of State, annual meeting minutes are not.

Generally, a legitimate official notice from the Nebraska Secretary of State will include the official letterhead and John Gale’s name (the elected Secretary of State), and often contact information for the “Business Services Division.” If you receive a solicitation that appears questionable, consider consulting your legal counsel to verify its legitimacy and for guidance in whether and how to properly respond. For additional information, we invite you to take a look at Mr. Gale’s Facebook posting, which can be found at the following link: https://www.facebook.com/pages/John-Gale-Nebraska-Secretary-of-State/101674183249332.

If you have any questions, please contact one of Woods & Aitken LLP’s Real Estate or Financial Institution attorneys.