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Corporate Filing Pitfalls for California and Beyond

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By Casey C. Sullivan, Esq. on October 27, 2015 6:59 AM

In-house counsel hate California. It's not our towering redwoods, sunny beaches, or booming economy that turns corporate attorneys off, of course. It's the difficulty of doing business. Sixty-five percent of in-house respondents complained about the "burdensome" nature of working in California in a recent Archer Norris poll. More than half expressed concern over state regulations.

Of course, there are a few things in-house counsel do that make working in the Bear Republic even more unbearable, particularly when it comes to corporate filings. Here are some common errors and how to avoid them, both in the Golden State and beyond.

Cali-Specific Corporate Filing Pitfalls

A recent blog post reminded us how "hella difficult" corporate filings in California can get. Continuing Education of the Bar, a program by the University of California and the state bar, recently reviewed common mistakes that get corporate filings rejected. Here's a quick summary, but we encourage you to check out the whole thing as well:

  • Leaving Voting Info Off Amendments: Want to go back and fix your past incorporation mistakes? Better do it right, or your amendment will be rejected. Failing to identify class votes and failing to provide sufficient voting information were common pitfalls identified by CEB.
  • Mixing Laws: Want a simple corporate statutory scheme? Take your business elsewhere. When it comes to filings in Cali, don't forget that California business law has both pre- and post-1977 statutory requirements that go together like cats and dogs. Don't mix the two. Similarly, if you're an LLC converting to a corporation, the CEB also warns against referencing the Beverly-Killea Limited Liability Company Act instead of the Revised Uniform Limited Liability Company Act.

General Tips: Read Filings Thoroughly, Double Check Everything

Forget California. Failing to double check or thoroughly review files can get your corporate filings rejected wherever you might be filing. When you're reviewing your filings, start with the basics. Here's a handy check-list:

  • Are you using the correct forms? Are they up-to-date? Remember the states sometimes change their forms often.
  • Are your supporting documents included? "Whoops, I forgot the attachment," is not an appropriate phrase for in-house counsel.
  • Is your information consistent? Especially when it comes to dissolution, corporate filings can be rejected for inconsistencies about the company's debts and obligations.
  • Did everyone sign? The right part? You don't want a filing rejected for missing or non-conforming signatures.

Spending a little time fine-tuning your filing beforehand can save you a lot of time and embarrassment later on. After all, we're sure you'd much rather be out enjoying the Golden State. We recommend trying the Sonoma Cheese Trail over revising corporate filings.

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