After you form a corporation, limited liability company or partnership, it’s easy to forget about the proper record keeping of that entity as you go about your company’s daily business. If you are busy, you might put off handling a notice from the Secretary of State or you simply may not be aware of the requirements necessary to keep your entity in good standing.
Failing to meet filing deadlines and keeping inconsistent records exposes your entity to suspension and costly penalty fees that become a big problem to cure when you need to close a deal. Lenders require that a borrowing entity’s records be current and in order.
Time is of the essence when closing a deal and precious time is wasted trying to document old business or playing catch up with filings that have fallen through the cracks. Filings may also need to be expedited to ensure that they are completed before a looming closing date and that can add to your costs.
Keeping your entity records current and regularly documenting changes to your entity’s structure is key to a smooth process when deals come up. If you are unsure about the current status of your entity, you can visit the various state government websites which keep entity information on-line. Status of any California entities may be reviewed by visiting the California Secretary of State.
If you have any questions on how to keep your records up-to-date or need advice on the best way to expedite a deal, contact G&R at 310-393-4000.
Stephanie Phillips is a paralegal at Gilchrist & Rutter specializing in corporate matters.