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Sorting Through California’s Filing Requirements for Legal Business Entities

The Business Entities Unit of the California Secretary of State (CASOS) recently released a “Misleading Business Solicitations” warning promoting caution to California registered businesses regarding the aggressive and deceptive marketing practices of several firms representing themselves as agents of the CASOS. The firms mentioned in the advisory have promoted, in addition to other deceptions, misleading facts concerning the annual filing requirements of California Corporations and Limited Liability Companies (LLC’s) with respect to their meeting minutes. California does not require the filing by Corporations and LLC’s of their meeting documents. The companies promoted the legal requirements of their own services in a manner disapproved by The CASOS.

This incident also raises the awareness of California Corporations and LLCs with regards to specifying and clarifying their compliance with the state’s actual legal annual/biennial filing obligations for their business entity.

The CASOS requires a biennial Statement of Information be filed for the Corporation or LLC within 5 months prior to the anniversary of its formation. The purpose of the form is for the state to be made aware of any changes in the officers/managers/owners of the entity, its address or service of process contact information. When the form is filed on time, the fee is a reasonable $25. However, if the form is even one day late, a $250 penalty is added and the total due to the CASOS becomes $275. This makes it very economical for the Local CA LLC’s and Corporations to timely stay on top of the state’s filing requirements. Other penalties related to the seriously delinquent filing of the Statement of Information can include suspension of the LLC or Corporation, thus revoking its ability to legally transact business and use its business name within CA.

California’s State Franchise Board (CASFB) additionally requires that the entity pay an annual franchise fee related to its business type and that the entity file annual income tax returns. The CASFB also reserves the right to assess monetary penalties and suspension of the business entity’s legal status in the same manner earlier mentioned relating to the CASOS.

Given the financial penalty assessments alone, it’s extremely important for California legal business entities to stay on top of the state’s filing requirements. While the forms are different based upon the type of California business entity, our firm, Pogosian & Company, CPA (Certified Public Account), located in Glendale, CA provides expert advice in many areas related to businesses including entity selection and formation, filing requirements, bookkeeping and even a part time Chief Financial Officer for businesses who may not be able to afford a full time executive.

Founded by a former IRS Agent, our expertise on business compliance and tax matters is extensive. Our client list includes companies in real estate, healthcare, small and large law firms and other businesses which include: restaurants, travel agencies, insurance companies, trucking and transportation businesses, e-commerce companies and tanning salons. Former IRS Agent, Vardan Pogosian has extensive background working with these companies.

Pogosian & Company, CPA offers a Free Consultation. Contact Us Today!

  • 18 Sep, 2015
  • Pogosian CPA

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