Herrick K. Lidstone, Jr.
The Colorado Secretary of State’s Office – Email Notification and Business Identity Theft
By Herrick K. Lidstone, Jr.
Burns, Figa & Will, P.C.
Many of our clients deal with the Colorado Secretary of State’s office. All 50 states have secretary of states, and in all cases, the Secretary of State (or in California, the Department of Corporations) manage entity records. National surveys indicate that the Colorado office is one of the best in the country. Having accessed the offices of many other Secretaries of State, the attorneys at Burns, Figa & Will, P.C. agree that the Colorado Secretary of State’s online access is easy, entities can be formed any time of the day or night to meet the requirements of the pending deal, and the information is up-to-date and correct. Furthermore, the fees charged by the Colorado Secretary of State’s office are a fraction of the fees charged by many other states for the same services.
There are, however, some risks resulting from this ready access. Recently Burns, Figa & Will, P.C. sent out an email alert where a private company was offering to make filings with the Colorado Secretary of State’s office for $225. These filings can be made online for $10.00, and we have staff make those filings for our clients.
Another bit of news from the Colorado Secretary of State’s office is that it has been affected by budget cuts, even though it is a self-funded agency. As a result, the Secretary of State is planning to discontinue mailing the 3”x5” cards advising entities of their annual reporting requirements. This will be effective January 1, 2012. The only manner in which companies will receive notice from the Secretary of State that their reports are due is to sign up for “email notification” for the entities of interest at the Secretary of State’s website, www.sos.state.co.us.
The ease of access has created a risk for businesses. “Business identity theft” is a serious problem that has involved the Colorado Secretary of State, the Colorado Department of Revenue, and the Colorado Bureau of Investigation, as well as federal authorities and the resources of other states. “Business identity theft” is essentially the crime of hijacking the identity of a business and using that identity to establish lines of credit with banks or retailers. This has occurred in Colorado and elsewhere. The Secretary of State has published a “Business Identity Theft Resource Guide” that can be found at http://www.sos.state.co.us/pubs/business/ProtectYourBusiness/protectyourbusiness.htm. The best way to protect your entity, though, is to sign up for email notification. In that way, each time any person affects the records of your entity or entities on the Secretary of State’s website, you will be notified. Attorneys at Burns, Figa & Will, P.C. can be signed up as an additional recipient for email notification purposes, and we in fact have already been added to the records of many of our clients.
You may check the status of any entity online at www.sos.state.co.us, and for your businesses you should do so on a regular basis. Select “Search Business Database” in the “Let us help you…” section of the Secretary of State’s homepage. Enter either the entity name or ID number in the appropriate field on the Records Search page. Searching by the entity’s ID number will display the Summary page. Searching by the entity name will result in a list of names similar to the name searched and will require you to select the proper record. Review the information on the Summary page to confirm that the proper record has been retrieved. The current status for the entity is listed near the middle of the Summary page.
As part of the business identity theft protection, the Secretary of State supported Colorado House Bill 11-1095 which permits (but does not require) the Secretary of State to require password access to complete filings in the Secretary of State’s business records. If enacted, this will prevent unauthorized persons from making alterations in filings, but is expected to permit unrestricted access to view records as presently. Password protection has some issues as well as possible benefits. The Secretary of State has not announced a schedule to consider the advisability of password protection of business records, but is expected to in the near future.