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Organizations invest an immense amount of time and resources in managing their Secretary of State (SOS) filing requirements. It can be a time-consuming and frustrating process, from tracking deadlines and gathering information to filling out forms and navigating e-filing portals. The complexity compounds for companies with multiple business entities registered in multiple states.
By understanding the basics of SOS filings and leveraging the right filing solutions, businesses can save substantial time and resources in managing their state-level compliance obligations.
In this guide, we’ll give a quick overview of SOS filings and how you can optimize the process.
SOS Filings 101
Many states enforce periodic reporting, usually on an annual or biennial basis, to be submitted to their Secretary of State. These reports usually demand updated details such as addresses, officer/director information, and the designated registered agent. Some states even request additional information related to revenue, assets, stock, and paid-in capital.
Keeping track of multiple due dates across different states can be a laborious and intricate task. Businesses that operate in multiple states often face varying deadlines.
All of these deadlines should be closely monitored, as failure to meet them can result in hefty fines and/ or penalty fees.
E-Filing and Paper Filing Options
In most states, organizations can opt for either e-filing services or traditional paper filing methods when submitting SOS filings. E-filing is the more convenient option, allowing companies to access all relevant forms quickly. In many cases, it also helps companies to save money via discounts or waived fees.
Paper filing is more tedious and time-consuming, but there are certain states that do not yet support e-filing services. It’s important to research the appropriate filing procedures for each state accordingly before filing any documents with the Secretary of State office.
Types of SOS Filings for Business Entities
From corporations to limited liability companies, the SOS processes all manner of business information filings. These filings include:
- Annual reports
- Biennial reports
- Business name reservations and changes
- Records required for mergers & acquisitions
- Foreign qualifications/registration statements
- Registered agent information for service of process appointments and resignations
- Formation for new business entities
- Entity dissolution
- Entity expansion
- Certified copies of filings and certificates of good standing
Risks Of Failing to Register With the SOS
It’s essential to observe all filing deadlines and make sure that the necessary information is accurate. Failing to do so can result in various penalties, such as:
Financial Penalties
If you fail to file on time, you risk late fees or fines imposed by the state. In extreme cases, companies may face suspension of operations and possible dissolution.
Legal Ramifications
If you fail to register with the SOS, there are some potential legal ramifications. You won’t be able to sue, but others will be able to sue you.
Intellectual Property Risks
Additionally, if you don’t register with the SOS, another organization could take your name or use a name alarmingly similar to your intellectual property (IP). Registering ensures your IP is protected.
Factors to Consider When Filing
There are a few factors you should keep in mind when filing with the SOS beyond just deadlines and state-specific rules and requirements. Often, we see companies with more licenses and registrations than they need. Registration requirements vary, sometimes quite significantly, from state to state.
Our Founder and CEO, Gary Harker, recommends considering the following when filing with the SOS:
- Where are you located?
- Where are you currently doing business?
- Where do you want to do business?
- What type of products are you selling?
- What's your physical nexus (office, employees, building, etc.)?
- What is your economic nexus (what type of revenue are you generating, and does it surpass threshold requirements for registration)?
How to Simplify Your SOS Filings
Organizations can benefit from utilizing a software platform that enables integrated management of their entire filing process. Such platforms provide standardization across all filings. A software solution makes it significantly easier to track due dates and submit the correct documents to the corresponding state agency.
A quality filing solution will also ensure compliance with ever-changing regulations, ensuring companies always stay on top of their filing requirements. You should also look for seamless NIPR and PDB integrations, Continuing Education tracking, and customizable dashboards to tailor the experience to your agency's needs.
Trust Our Experienced Compliance Professionals
At 3HCS, we offer managed services and an insurance management software solution for agencies like yours. Alongside our sister company, Creative Compliance Software Solutions, we've created the cloud-based Creative Compliance Hub to help insurance agencies like yours manage entity, producer, and specialty licenses.
Whether you prefer staying hands-on or would prefer a hybrid approach so we can manage everything for you, contact us today to see how our solutions can help you save time on management and money on unnecessary filings.
