Misleading Corporate Minutes Solicitations
By Ted Muegenburg, Senior Attorney, META law, inc.

I recently received an official looking envelope and form in the mail with instructions to return the form, along with a fee in order to “avoid non-compliance with California law.” The form was designed to mimic the appearance of the official “STATEMENT OF INFORMATION” that California corporations must file annually with the Secretary of State. It warned that failure to comply could result in the loss of the advantages of corporate existence and create personal liability for the corporation’s shareholders and directors. Only by examining the form carefully could one see in fine print: “This product has not been approved or endorsed by any government agency and this offer is not being made by an agency of the Government.”

Several times a year I get calls from clients who have received forms like this and are confused. I tell them that is a solicitation and that they can safely throw it away.

The message behind these solicitations is an important one – a California corporation is required to hold an annual meeting of its shareholders and to maintain minutes of that meeting and record the actions of the corporation’s board of directors. Failure to respect these formalities could indeed result in the loss of the advantages of corporate existence.

The minutes that could be prepared from this misleading form would almost certainly be insufficient to properly document the meeting of the shareholders and the actions of the board of directors, however - the form doesn’t even ask the date of the annual meeting! If the minutes are not complete and accurate, then you have not respected the formalities of corporate existence.

Click here to go to the Secretary of State website regarding the annual STATEMENT OF INFORMATION for a California corporation. Here is what the Secretary of State STATEMENT OF INFORMATION form for a domestic stock corporation looks like:

Click on the image to open the form in PDF format.