Not-for-Profits and LLCs—Don’t be fooled by the Annual Meeting Disclosure Statement Being Mailed to You.
Recently, some Louisiana business entities have received, by mail, an official looking corporate form entitled the Annual Meeting Disclosure Statement—Minutes of Directors and Shareholders—Domestic Business Corporation/Limited Liability Company. This form is being sent by an outfit identified as the “Louisiana Corporate Compliance Business Services Division”. The Annual Meeting Disclosure Statement, including step-by-step instructions, bears a familiar resemblance to the “Annual Report” disclosure form that, in the past, was mailed by the Louisiana Secretary of State and required to be completed by all registered corporations and limited liability companies (LLCs), complete with the entity’s registered name and Secretary of State “charter number” at the top of the form.
So what’s the problem? For starters, the Louisiana Corporate Compliance Business Services Division is not affiliated with the Secretary of State in any way. In fairness, the Annual Meeting Disclosure Statement form does state (bottom of the form) that the product is not approved or endorsed by any governmental agency. However, some Louisiana business entities are obviously confused by the mailing of this “official-looking” form, with its “official-sounding” purpose from an “official-sounding” organization, which may be the reason behind Secretary of State Tom Schedler’s posting the following conspicuous message on his agency’s website:
“WARNING: Louisiana Corporate Compliance Business Services Division is not affiliated or associated with Louisiana state government in any way.”
Further, the vague, yet official-sounding purpose of the form – filing of annual meeting minutes – is actually not a requirement under the Louisiana Business Corporation Laws. Certain information regarding a business entity’s officers or managers, directors, shareholders or members is required to be updated annually with the Secretary of State. And while most business entities are required by Louisiana law to conduct an annual meeting of its equity owners and maintain business records, including minutes of the annual meeting, generally there is no legal requirement to publicly file those records for privately-owned businesses.
Lastly, the official-looking form – the Annual Meeting Disclosure Statement – is void of information of what services the Louisiana Corporate Compliance Business Services Division will actually provide to earn the $125 fee it is soliciting from unsuspecting businesses. So we contacted the Louisiana Corporate Compliance Business Services Division by phone, twice, to gain a better understanding of the “offer”. In fairness, we were told in both conversations that the service is “optional” and that the business is a private company, not associated with the State of Louisiana. In response the question of “what does a business get for $125”, the person on the phone told us that they will “store and keep on file” a company’s annual meeting minutes and would “promptly send them back out” to the company upon request, in the event the minutes were ever needed. In other words, a $125 fee paid to the Louisiana Corporate Compliance Business Services Division buys a business entity the equivalent of what a manila folder from Office Depot or 30KB of disk space would provide (insert sarcasm here). Is it just me, or does the cost-benefit ratio of this offer seem a bit askew?
Louisiana business entities would be well advised not to rush into the service. Contact your business’ attorney if you have any doubts or concerns about the offer.