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Yes, a Stranger Can Cancel Your LLC!

Logo for Quora, where Dana Shultz answered a question about how a stranger can cancel your LLC or corporationThis post discusses how (amazingly!) an unauthorized stranger can cancel your LLC (limited liability company) or corporation. It is based on a Quora question that I answered. See What prevents someone from filing a restated certificate of incorporation for a Delaware corporation in which they are not authorized to do so?

Unfortunately, the ease with which entity-formation documents can be filed in the U.S. – while facilitating business startups – does allow unauthorized filing of such documents. This means that, whether accidentally or intentionally, a stranger can cancel your LLC (or corporation). (more…)

Can I Form a Corporation with a Future Filing Date?

Logo for Avvo, where Dana answered a question about future filing dateThis post expands upon an Avvo answer that I provided. Q. Can I form a corporation with a future filing date?

A. Yes. The answer will vary slightly depending on the state of incorporation.

Future Filing Date in Delaware

If you want a future filing date in Delaware, Section 103(c)(4) of the General Corporation Law says, in relevant part:

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California Secretary of State Reduces Turnaround Times!

California Secretary of State logo

California Secretary of State turnaround times for corporate and LLC formation – which stretched to their longest ever early this year – now have been reduced significantly.

The reason: In April, the state Legislature passed a bill authorizing $1.6 million for overtime and temporary personnel to resolve a backlog of 122,000 business filings! (more…)

How Can I Revive My Suspended / Forfeited Entity?

Photo of man giving CPR to another man symbolizing post about how one can revive a suspended or forfeited corporation or LLC in California

Yesterday I wrote about how the status of a corporation or limited liability company (LLC) in California might be suspended or forfeited. Please see Why was My Corporation / LLC Suspended or Forfeited? This post explains how one may revive a suspended of forfeited entity.

Section references below reflect California’s new LLC law that took effect on January 1, 2014. See RULLCA Brings New LLC Laws to California in 2014.

The steps required to revive the entity depend on whether it was suspended or forfeited by the Secretary of State, by the Franchise Tax Board, or by both the SoS and the FTB: (more…)

Why was My Corporation / LLC Suspended or Forfeited?

California Secretary of State logo

If you do a business entity search using the California Secretary of State database, you might find that the status of a corporation or limited liability company (LLC) is “suspended” or “forfeited“. This post explains what those terms mean.

Section references below have been updated to reflect California’s new LLC law that took effect on January 1, 2014 (see RULLCA Brings New LLC Laws to California in 2014).

Corporations and LLCs have many “powers, rights and privileges” under California law. Those powers, rights and privileges can be taken away if the entity: (more…)

Forming an LLC Online: You Get What You Pay For

Mannequins with "sale" signs symbolizing forming an LLC online

Update (November 17, 2010): I have decided to start identifying by name providers of corporate and LLC online formation services who, in my opinion, have delivered inadequate service to my clients. (The clients used those providers before retaining me.) The inadequate provider referenced, below, in this post is Rocket Lawyer, which has been added to the Hall of Shame page.

Update (April 27, 2011): I had a cordial conversation this afternoon with Rocket Lawyer’s VP of Sales & Business Development. He acknowledged that, last year, Rocket Lawyer was using a filing service (filing operations are outsourced) that did not meet the company’s expectations. He reported that the current filing service is performing at a much higher level and that Rocket Lawyer is paying closer attention to ongoing support of its customers.

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Almost a year ago, I suggested (in Can I form an LLC without a lawyer?) that entrepreneurs seeking to save money when forming a limited liability company would be better off buying a book from Nolo than using an online LLC formation service. I now believe that more than ever.

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Doing Business in CA? Be Sure to Register

Seal of the California Secretary of State, which provides a registration form for a foerign entity doing business in CaliforniaSometimes California-based entrepreneurs think that they can avoid CA registration fees and taxes by forming their business entities in another state. Usually, that belief is incorrect. If the entity is doing business in CA, then it must register with the CA Secretary of State, even if the entity was formed elsewhere.

Section references and content below have been updated to reflect California’s new LLC law that took effect on January 1, 2014 (see RULLCA Brings New LLC Laws to California in 2014). (more…)

Statements of Information: Easy is Good

Logo for CA Secretary of State for post about filing Statements of Incorpation

This post discusses Statements of Information, which corporations and limited liability companies need to file with the California Secretary of State.

When you form your corporation or LLC, the Secretary of State’s welcome letter will tell you to file a Statement of Information within 90 days.

You need to update a corporation’s Statement of Information every year. For an LLC, you need to update every two years every two years.

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Forming a Corporation in California? Get Ready to Wait

California Secretary of State logo

July 2013 update: California Secretary of State Reduces Turnaround Times!

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California’s budget crisis is affecting how quickly entrepreneurs can form their business entities: Standard turnaround time for hand-delivered Articles of Incorporation now is close to four weeks. (The situation for limited liability companies [LLCs] is better at two weeks, though still much longer than it was just half a year ago – see LLC Formation in Record Time.)

Update as of February 6, 2013: LLC filing time now is approximately six weeks, and corporation filing time is more than seven weeks!

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Trademark Protection in One Easy Lesson

A trademark or service mark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of goods (trademark) or services (service mark).

(Throughout the remainder of this post, the term “trademark” is intended to include service mark, as well, except where specified otherwise.)

The owner of a trademark has the right to prevent others from using the mark or a confusingly similar mark. (more…)

LLC Formation in Record Time

Last week, I formed a new limited liability company (LLC) for a client. The California Secretary of State turned the Form LLC-1 around in only two days rather than the standard one week! (24-hour turnaround is available for an additional fee of $350, which is hardly worth paying under these circumstances.)

Has the recession reduced the number of new businesses being formed? Datasearch, the filing service that I use in Sacramento, did not know.

Follow-up: Eighteen months later, turnaround times have deteriorated terribly – see Forming a Corporation in California? Get Ready to Wait.

Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

Name that Business – Avoiding Rejection by the Secretary of State

California Secretary of State logo

California law requires the Secretary of State to determine that a proposed business entity name (for a corporation, limited liability company, or limited partnership) is not the same as or too similar to a reserved name or to the name of an existing business entity (of the same entity type) and is not misleading to the public.

The Secretary of State’s office adopted regulations on May 14, 2009 that provide guidelines to assist the public in selecting a business entity name prior to reserving the name or filing documents. These regulations are helpful because The Secretary of State returns documents unfiled if proposed business entity names are unavailable under the statutory standards. There now are specific guidelines for selecting business entity names prior to filing documents with the Secretary of State and, thus, more certainty that proposed business entity names submitted for reservation and/or filing will be acceptable.

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Researching the Opposing Party: Forewarned is Forearmed

When I prepare to negotiate an agreement for a client, I start by researching the other party so I can gain insights that might help me represent my client more effectively. The obvious starting point is the website for the other party, where I can quickly understand its business and see who its executives are. But I also look for legal information that typically is available only elsewhere.

Every state has a searchable database of the businesses that have registered with that state, either because the business was formed there or because it was formed elsewhere and registered to do business in the state. Each state includes in its database, at a minimum, information about the corporations and limited liability companies. Most states include information about other types of business entities, too.

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