Consumer Alert

About a week or so ago the stack of letters pictured to the right arrived in the mail like a stack of Christmas Cards.  The letters were from "Corporate Records Services" and stated on the front of the envelope "IMPORTANT ANNUAL MINUTES REQUIREMENT STATEMENT."  Initially, the letters appeared to be a mass mailing or simple junk mail solicitation. Russell, Krafft & Gruber, LLP received these letters because in the past many clients used our firm's address as their registered corporate address with the Department of State.  It was clear that someone had logged onto Pennsylvania's Corporation Bureau website and sent a mailing to every registered corporate address.  We still didn't know exactly what this was, but on the front of the envelope it stated "THIS IS NOT A GOVERNMENT DOCUMENT", so we knew it was a private company soliciting Pennsylvania businesses.

Alas, the mystery was solved when I saw Matt Miller's article on pennlive.com which stated that the US Attorney's office filed a civil suit against Aaron Williams and his business Pennsylvania Corporate, a California company, for trying to scam Pennsylvania companies with a similar or identical mailing.  The mailing indicates that corporations are required by law to have annual meetings and minutes and that the company sending the form will satisfy this requirement for $125.  Admittedly, the mailings we received do not have the same language as the mailings referenced in the suit, which stated failure to remit the $125 fee could result in the companies losing their limited liability protection and lead to dissolution, however, the fee charged is identical and the letter certainly creates the appearance that it is a government mailing and a legal requirement, despite the language on the front and the sheet inside pictured above.

In addition, the Pennsylvania Department of State has issued an Important Consumer Alert regarding these letters. If you receive a similar letter in the mail we recommend you do not pay the $125 fee or fill out the form . Instead contact a licensed attorney to assist you with your business matters.  Although you will not automatically lose your limited liability protection or be dissolved for failing to keep annual minutes and hold annual meetings, it is still a good idea to keep your records up to date for a number of reasons.  First, it helps bring all of the shareholders or members together to discuss the issues facing your business on an annual basis.  Second, there is some truth to the assertion that failure to follow corporate formalities could lead to "piercing the corporate veil" in the event you're sued, although it is rare.

Derek Dissinger is an attorney at Russell, Krafft & Gruber, LLP in Lancaster, Pennsylvania. He received his law degree from Duquesne University and practices in a variety of areas including Business Law.

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