CTA Filings Suspended; But Is Your Business Up To Date On Other Filings?

As we have reported in previous Sidebars [https://www.pooleshaffery.com/publications/the-california-sidebar/publication/?QID=547], the U.S. Department of the Treasury has suspended enforcement of the Corporate Transparency Act (“CTA”) against U.S. citizens, domestic reporting companies and their beneficial owners. That is one less reporting obligation for California businesses to worry about; however, there are many other recurring governmental filings with which those businesses need to comply. Let’s review how you stand on your compliance with some of the most common requirements.

1. Statements of Information are required to be filed with the California Secretary of State within 90 days after the filing of your entity’s organization documents. Thereafter, corporations are required to file a new Statement annually and limited liability companies are required to file bi-annually. In addition, if an entity’s information changes in the interim, the entity may file an interim Statement to provide the update. See https://www.sos.ca.gov/business-programs/business-entities/statements.
2. If your entity operates under an assumed or fictitious name, a Fictitious Business Name Statement must be filed with the County Clerk of the County in which your entity’s principal place of business is located. A fictitious business name statement expires five (5) years after the date of filing; however, 5-year renewals may be obtained by filing for a renewal prior to the expiration date. For Los Angeles County, see https://www.lavote.gov/home/county-clerk/fictitious-business-names/filing/who-should-file.
3. If your entity conducts business or owns property in another state, your entity must file for a qualification to do business in that state and, thereafter, make periodic information filings in that state to maintain its qualification. Check the Secretary of State website of the foreign state to confirm its requirements for qualification.
4. If your entity employs personnel in California, your entity needs to obtain an Employer Number from the Employment Development Department (the “EDD”) and make periodic reports to the EDD. See https://edd.ca.gov/en/payroll_taxes/Am_I_Required_to_Register_as_an_Employer/.
5. If your entity is a retailer engaged in business in California, your entity needs to obtain a Seller’s Permit from the California Department of Tax and Fee Administration (the “CDTFA”) and to file periodic returns with the CDTFA. See https://www.cdtfa.ca.gov/taxes-and-fees/sutprograms.htm.
6. Stock issued by a corporation and membership interests issued by a limited liability company are securities and must either be qualified with the Commissioner of Corporations or exempted from registration by a specific Rule of the Commissioner or specific law. Most small businesses issuing securities to not more than 35 persons can qualify for an exemption from registration by filing a Notice of Transaction Pursuant to Corporations Code Section 25102(f). See https://dfpi.ca.gov/wp-content/uploads/sites/337/forms/Securities/DFPI-260.102.14c.pdf. Federal securities laws may also require registration with the Securities and Exchange Commission or a qualification for an exemption from registration.
7. If your entity is located within, or engages in business within, the territorial limits of certain cities, your entity may be required to obtain a business license or other registration from each such city. Santa Clarita does not have any requirement for business licenses; however, businesses located in Santa Clarita but conducting business activities in the City of Los Angeles may be required to obtain a Business Tax Registration Certificate from the City of Los Angeles. See https://finance.lacity.gov/business-registration-process.

While many of the common governmental filings of business entities can be completed without the assistance of an attorney, questions and concerns can still arise. The attorneys at Poole Shaffery would be happy to assist with any such questions and concerns.