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 Bridget Broihahn

Hello everyone. My name is Bridget Broihahn and I'm the new editor for CIB. I look forward to getting to know more about the businesses in Central Illinois. This issue has been exciting to create.

Spring is finally here, and business in Champaign County is alive and well, ready to take on the outdoor season.

That is certainly true for BRG Sports, our feature story. This outstanding company just keeps breaking records and winning awards in business. Led by energetic and enthusiastic general manager Lewis Hornsby, this crew makes hard work look easy as they gear up for the bicycling season. His energy level had me motivated, and the employees left me energized.

I also hope you'll check out the article on Scientific Animations Without Borders, better known as SAWBO. Barry Pittendrigh and Julia Bello-Bravo came up with a great way to share information worldwide through animation. It's free, and a great resource for the world community.

The dedicated businesspeople I had the chance to share some time with for this issue inspired me. This includes Steve Tarrant of State Farm. He's one of those people who pulls up a chair, cracks open a soda and lends you a hand. He makes your peace of mind his business.

Additionally, I had the chance to hang out with the game designers at Volition. This unique group made its mark in the video gaming industry, and has made Champaign home. They even gave this mom of a teenage boy some cool points, if just for a little while, anyway. That's no small feat!

Bridget Broihahn is editor of Central Illinois Business magazine. She can be reached at 217-351-5695 or bbroihahn@news-gazette.com.