Central Illinois Business Magazine
LEGAL ISSUES          December 2012

Annual business filing scams

Randall Green

By Randall Green
CIB Contributor

We've all received some iteration of the email from a north African prince who has inherited hundreds of millions of dollars and will gladly split it with you 50/50. All you need to do is simply send him $1,000 via Western Union so he can buy a plane ticket to the United States, unlock his riches and lavishly celebrate with you. In this situation, most of us know to implore the rule: If it sounds too good to be true, it probably is.

Likewise, as an attorney, I receive at least two or three emails per week "from" the ex-wife of the international real estate mogul who resides in my jurisdiction and wishes to retain my services to collect the multimillion divorce judgment that she was awarded in the divorce proceeding. I've learned to spot and delete most of these emails on my phone before I even get out of bed in the morning, and I'm sure my profession isn't unique.

However, as our ability to identify these frauds improves with experience, the fraudsters' methods evolve as well.

Recently, many Illinois businesses received letters in the mail from a firm calling itself Corporate Records Service. The letters ask the recipient to fill out the enclosed Annual Minutes Records Form and submit a $125 fee to keep the corporation in good standing. Since the names and addresses of every registered agent and select company officers are available on the secretary of state's website, it is easy for fraudsters to target these businesses. If you receive one of these letters or have fallen victim to this scam, the secretary of state encourages you to call its Business Services Office at 217-782-6961.

Of course, Illinois law does require corporations (and other business entities) to follow certain basic formalities to remain in good standing and to avail themselves of the corporate protections provided by Illinois law.

There are two basic formalities required of all Illinois corporations:

First, corporations must file an annual report with the Illinois secretary of state each year. The annual report is due on the first day of the anniversary month of the company's incorporation. So if a company was incorporated on Aug. 18, the annual report would be due on Aug. 1 of each succeeding year. Among other things, the annual report lists the officers, the authorized and issued shares, and the current paid-in capital. A fee of $75 is required as well as an associated franchise tax of no less than $25. Although the secretary of state currently sends the report to the company's registered agent annually, the annual report can also be completed and filed online at www.cyberdriveillinois.com.

Second, the corporation is required to hold annual shareholder meetings to, at a minimum, elect the directors of the corporation. Illinois permits the shareholders to adopt a written action in lieu of a meeting, which is the preferred method for many small businesses. These meeting minutes or written actions are not required to be filed with any state agency, nor is there an associated fee. A record of the minutes should be placed in the company's corporate record book as evidence that the corporation has observed the corporate formalities required by statute.

There are independent companies that will serve as a company's registered agent in any of the 50 states for a fee; however, as part of their services to businesses, many attorneys will serve as registered agent, prepare annual resolutions and maintain the official corporate record book.

If you have questions about whether your business has been observing all of its required formalities, your attorney should be able to review your corporate record book and tell you what, if anything, you should be doing differently to make sure that your company is complying with Illinois law.

Randy Green is an attorney at Meyer Capel, a Professional Corp. He can be reached at 217-552-1800 or rgreen@meyercapel.com. This article does not constitute legal advice, nor does it create an attorney-client relationship.

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Fresh edition of CIB

By John Foreman

No matter how long I live in East Central Illinois, I never cease to marvel at the innovative and diverse nature of its business community. Innovators seem to flourish in every corner.

Don Dodson, the Champaign-Urbana News-Gazette's longtime business editor, was among those friends to whom we turned to put out this issue of Central Illinois' favorite business magazine while we continue our search for a top-notch editor. Many people pitched in to make this edition possible, and I won't try to name them all for fear of missing someone. My job is simply to look at the finished product and introduce it to you.

I don't think you'll be disappointed.

Where, for example, would you go to find a piggy bank in the form of a portable toilet or a box for a life-size Star Trek action figure? The answer is in Ogden and ShapeMaster Inc.

And would you like to try a brew that won a Silver Medal in the 2014 World Beer Cup?

You needn't venture farther than Savoy. You'll find that story on page 8.

All that, plus more and lots of fresh stats, are inside.

Best wishes for a 2015 as robust as that microbrewed ale.

John Foreman is the former publisher of Central Illinois Business magazine.