North Carolina Secretary of State Elaine Marshall has notified business lawyers in the state of a suspect mailing from an outfit called “Corporate Services, Inc.”  This company is sending out official-looking notices to North Carolina corporations that quote North Carolina statutes concerning the requirement to maintain minutes and threaten dissolution of the corporation for failure to comply with statutory requirements. 

The mailing reportedly encourages recipients to send $125 to Corporate Services, Inc., which would provide appropriate minutes to avoid dissolution.  The Attorney General and the Secretary of State have secured a temporary restraining order against Corporate Services, Inc. to halt this mailing.  If you receive such a mailing, fax a copy of it to the Secretary of State at (919) 807-2010 or send it to your business lawyer.

Nevertheless, this mailing does make a good point.  To retain their limited liability, corporations do need to file annual reports and associated fees with the Secretary of State’s office, hold annual meetings of shareholders and directors, and keep minutes of the meetings. 

In addition, just filing Articles of Incorporation is merely the first step in forming a corporation. To be properly formed, the corporation must have issued shares, named directors and officers and held an organizational meeting.  If you have not taken all these steps and are not holding annual meetings of shareholders and directors, you are not getting the legal protection you think you have, and your personal assets could be at risk in a worst-case scenario. 

We work with a lot of entrepreneurs who have let the formalities slide because they were busy running their business.  It is relatively easy to bring a corporation back into compliance, so I encourage you to find a business attorney to assess your risk and estimate the costs of bringing your corporation into compliance.

Tags: annual meetings, annual reports, Corporate Services, dissolution, Elaine Marshall, Inc., limitation of liabiity, limited liability, North Carolina Secretary of State

This entry was posted on Friday, July 10th, 2009 at 7:33 am and is filed under business law, formation, incorporation, small business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.