Alerts

New Bills Enacted in Several States

A variety of bills have been enacted in the past several months. Effective April 18, 2018, Tennessee authorized the Secretary of State to accept electronic transmission of LLC documents. A few weeks later, on May 8, 2018, Utah enacted the Benefit LLC Act, which permits the formation of LLCs for general public benefit, and changed the term “certificate of good standing” to “certificate of existence.” West Virginia began recognizing foreign series LLCs on June 8, 2018. Effective July 1, 2018, filings submitted by entities registered in Illinois are not to be subject to additional expedited fees solely because they are submitted electronically.

Lastly, Arizona adopted the Uniform LLC Act, which applies to LLCs and registered foreign LLCs formed, converted, or domesticated after September 1, 2019. However, LLCs formed, converted, or domesticated prior to September 1, 2019, may elect to be subjected to the requirements. The requirements of the Uniform LLC Act will apply to all LLCs and registered foreign LLCs after September 1, 2020.

Don’t Let State Office Closures Impact Your Filings

When planning for your critical filings, it’s always important to be mindful of  the potential setbacks related to both anticipated and unanticipated state office closures. Holiday closures can be somewhat anticipated and planned for; however, inclement weather and other emergency closures can throw curveballs which could negatively impact your filing projects. In either event, last-minute jurisdictional office closings, reduced staff, and seasonal high volume may occur, resulting in potential delays of filing and/or turnaround time.

In most jurisdictions, filings are not effective on the date postmarked or initially submitted. Rather, filings are typically effective on the date received in correct form. In some jurisdictions filings are not effective until they are actually processed by the filing office.

If possible, for date critical corporate documents:

  • Pre-clear complex filings, such as mergers.
  • Obtain all necessary tax clearances in advance for mergers, dissolutions, and withdraws.
  • Take advantage of delayed effective date provisions in jurisdictions where they are permitted.
  • Utilize expedited filing options (when available).

When planning for your next important filing, make sure you know what closures may impact you and prepare accordingly. We encourage you to reach out to our Service teams to explore any potential closings around the holidays or when inclement weather may come into play.

A list of office closings is maintained at:

https://www.capitolservices.com/state-office-closings/

New Name Availability Rules

On June 9, 2017, House Bill 2856 was passed. This bill, entitled “Relating to names of domestic and foreign entities for transacting business in this state,” changed the language of the existing Administrative Code such that the name standards for an entity transacting business in the state changed from “identical and deceptively similar names prohibited” to “distinguishable names required.”

While it seems like a small change, the ramifications of this are huge. Texas has long been notorious for its stringent name rules, and this statutory change will make wider range of names available without conflicting with currently registered entities. The new rules published in the May 25, 2018, issue of the Texas Register indicate that a difference in one key word suffices to make a name distinguishable. Additionally, if the words are the same but in a different order, the name is considered to be distinguishable. Words that are the same but are in different languages do not conflict. If the words sound the same but have different connotations, the names are also considered distinguishable. A change in or removal/addition of a preposition is also sufficient to make two names distinguishable.

The guidelines relating to name consent have also changed. If two names are the same except for the entity ending and the companies are different types of entities, consent is now allowed. With consent, names that are the same except for a common abbreviation of a word or are the same except for the use of the singular, plural, or possessive are allowed. In names that already include a city, the addition or omission of a state to the name will be permitted if consent is granted. When two or more related filings are submitted to the Secretary of State’s office for filing together, consent will be implied.

Some States Switch Things Up

Are you familiar with the annual report filing requirements for your entity? You might be surprised to learn that several states recently changed their statutes.

Connecticut altered the annual report filing deadline for domestic and foreign LLCs. Previously, the report was due on the last day of the LLC’s registration month. Now the annual report must be filed between January 1 and March 31. In addition, Indiana added a biennial filing requirement for domestic and foreign LPs and LLPs. Previously, no reports were required.

Finally, Maryland has streamlined its annual report filing process. Previously, all entities in the state were required to file both an annual report and a personal property tax return. However, beginning in 2018, only certain entities are required to include a personal property tax return with their annual report filing. The tax return must be included if (1) the entity owns, leases, or uses personal property located in Maryland; or (2) the entity maintains a trader’s license with a local unit of government in Maryland.

Are you tired of keeping track of ever-changing annual report filing requirements? Sign up for our Annual Report Management Service (ARMS), and let us manage your filings! ARMS is an auxiliary service offered to companies which name us as registered agent. We can help take the pain out of annual report compliance.

Modifications Effective in
Several Jurisdictions

The New Year brings corporate changes in several jurisdictions. The Washington Secretary of State launched a new filing system for corporate documents. It also changed the way it assigns filing dates. Filings are now given the date they are processed. Ensuring a specific filing date under the new system requires same day expedited processing.

In Louisiana, mandatory online filing of certain business documents for parishes with a population over 100,000 went into effect January 1, 2018. Entities domiciled in smaller rural parishes are excluded from this mandate.

Finally, the Tennessee Uniform Limited Partnership Act of 2017 became effective January 1, 2018. It governs LPs, LLLPs, and foreign LLPs created on or after January 1, 2018, and existing LPs formed under the Tennessee Revised Uniform Limited Partnership Act of 2001 that elect to be governed by the new act. The new law contains many substantive changes including altering the presumed term of a limited partnership from fifty years to perpetual duration and authorizing any lawful purpose for limited partnerships, regardless of whether for profit.

For more details or assistance with these new procedures, please contact our Corporate team.

Tax Lien Database Changes

Georgia and Illinois switch things up

Effective January 1, 2018, both Georgia and Illinois adopted new legislation and launched statewide databases for housing state tax liens. State tax liens will be limited to those filed by the state Department of Revenue. The Department of Revenue will be able to file these liens electronically, and taxpayers will be able to make online payments. Though guidelines for these databases seem to indicate that all existing liens (currently filed with the county recorder) will be duplicated within these databases, our industry experience reminds us that sometimes these migrations are not executed perfectly resulting in effective liens that do not get picked up by the centralized database. In light of this understanding, Capitol Services will search both the centralized databases and the county recorder for state tax liens in Georgia and Illinois. We also recognize the value of continuing to search the land records for other state liens filed by agencies other than the Department of Revenue, such as city, town, and other municipalities or government agencies levying liens.