26 May The Evolution of Business Filings
Looking back, it’s interesting to see how business filings have changed. In today’s post, I reflect on past developments and ideate on the future of business filings.
Yesterday, Roughing it
In the late 1980’s, when I was an entry-level corporate paralegal, there were three ways to file state business filings, not in this particular order: (1) by mail – which was as nerve-wracking then as it is today; (2) send a paralegal or courier to the Secretary of State’s office; or (3) use a service company like CT Corporation or Corporate Service Company.
Choices for obtaining a pre-printed form were to request it by mail, visit the secretary of state in person; or ask your preferred service company to fax you a copy. Once obtained, we coveted those forms and copied them until they were faded and crooked. We’d crank them through the feed roller of the IBM typewriter and complete the required information (with correction tape or Wite-Out at the ready), all the while hoping that the end-product would be acceptable to the state.
Service companies were invaluable in those days. Whether we needed a business filing submitted, a certified copy to be retrieved, a good standing certificate or general information regarding a name availability, the service company was a necessary – and costly – vendor that filled the gap between corporate legal professionals and government agencies.
Imagine a Life Without Email or the Internet
Email arrived in law firms in the mid-90’s. Internet access soon followed, which was first issued to law firm partners, then associates, finally reaching the desks of paralegals. As fascinating as the internet was then, Google simply led us to the virtual front door of those state agencies who were pioneers in online presence. Site maps were important guides. Many a billable hour was wasted maneuvering state websites while trying to discover available resources. Some state websites offered online company searches, and some offered pre-printed forms online. Nevertheless, online access to anything was amazingly convenient and visualizing the potential of such technological advancements made it difficult to wait!
The E-Government Revolution
E-government Act of 2002, enacted on December 17, 2002, provided, among other things, that government agencies develop internet-based information technology to enhance citizen access to information. It encompassed the government as a whole. But, for corporate legal professionals specifically, it brought revolutionary changes. Some states rose to the challenge as early adopters while others lagged woefully behind. As we discovered new state and federal online procedures, it was exciting news to be shared with colleagues. The online EIN application was specific reason to celebrate! Previously, obtaining an EIN required spending hours on the phone with the IRS, which was always a dreaded experience.
By 2003, UCC filings were available in most states. Slowly, online offerings expanded to include downloadable forms, then fillable forms, and until nearly a third of the states offered at least some online business filings.
Today, Nearly Immediate Access
We’ve seen many technological advances since the late 1980’s! “Feet on the street” in every capitol city across the country is no longer necessary. Today we benefit from many convenient and expeditious procedures that were unimaginable when I was an entry-level paralegal. Rather than scrounging a filing cabinet for the best quality pre-printed form, today we commonly file and execute documents electronically. Wite-Out and correction tape are destined to as outdated as the typewriter.
The ability to save tons of money in service fees is at our fingertips. The main challenge lies in state variations. While Virginia, for instance, offers online good standing certificates, downloaded in minutes, if you need a quick Delaware good standing, a service company connection is required. While Colorado mandates online filing, Maine, amazingly enough, still requires original signatures. Many states, but not all, accept e-signatures. Massachusetts allows electronic signatures via fax filing, but original signatures when filing in person. The inconsistencies between states – and sometimes within a particular state – are vast.
Since keeping track of the state variations is difficult, many corporate paralegals and lawyers, in an effort to save time, will opt to use large service companies and pay exorbitant fees. That’s where Velawcity differs. Outsourcing to Velawcity provides access to seasoned corporate paralegals who have worked in law firms and corporations, and fully realize what it’s like to be in your position. We also stay current on the availability of all online options in the 50 states. When online access is unavailable, we utilize our nationwide network of providers for the most efficient and cost-effective method to accomplish the task at hand and always strive to save our clients up to 50% of the fees charged by larger service companies.
It’s interesting to see the effect COVID-19 has had on the ability of Secretaries of States to do business. Some states, like Delaware, have operated seemingly unaffected. Alternatively, Illinois has been unable to process a filing since late March. Illinois was running a month behind pre-COVID. When the Illinois Secretary of State re-opens on June 1st, who knows how long it will take them to catch up. I predict, post-COVID, we’ll see an increase in online functionality, whether it’s for business filings, UCC filings, professional licensing, annual reports or any other transactions, and I, for one, can’t wait!
Written by Denise Annunciata
President of Velawcity Legal Support Services