The Mistake of a Business Owner Regarding Secretary of State Filings
The details matter when it comes to the formation of your business entity, filing the initial documents with the Minnesota Secretary of State (“SOS”) and maintaining your registration with the Secretary of State for your entity business filings.
About 25% of businesses who come to our firm seeking legal representation for their business entity have an inactive listing with the SOS because they have failed to renew their business entity. As a result of their failure to renew, after a relatively short period of time, the SOS administratively terminates the legal entity. As a result, your legal entity is not authorized to do business in the state of Minnesota, and technically, you do not have a corporate veil (note: there may be other reasons why your business does not have a corporate veil).
It is imperative that you annually maintain the business entity registrations, including any assumed names. If you have not renewed your business entity and assumed names yet this year, do so today. All business entities and assumed names filed last year or before must be renewed by December 31 of this year. We strongly recommend that a business renews with the Secretary of State the same day that its business taxes are signed. That way, you will not “miss” the annual renewal.
In addition, it is not uncommon for businesses to rely on non-attorneys to file assumed names. The vast majority of the time in our experience, the filing of the assumed name is incorrect because the assumed name is incorrectly being held by an individual rather than the legal entity and/or the assumed name was never published in a legal newspaper as required by law.
Furthermore, it is also not uncommon for a business to list an address with the Secretary of State that does not match the physical location of the business. Doing so can result in unintended consequences. For example, if your business gets sued, the legal processor will go to the address listed on the Secretary of State, which is the address they are supposed to go to serve the legal documents, and if there is no agent, officer, manager or general partner to be found at that address, then the Secretary of State gets served with the businesses legal documents. If the Secretary of State gets served, most likely the business will not timely receive the legal documents from the Secretary of State resulting in the business being automatically defaulted. If you list an address with the Secretary of State that does not match the physical location of the business, then it is necessary for you to name a registered agent with an address whereby the agent is actually located.
Spangler and de Stefano, PLLP assists business owners with most aspects related to their business, including proper formation of your legal entity and maintaining the corporate veil.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.