Small Business Reading Room

Wednesday, February 20, 2013

Fraud Alert! Corporate Records Service Scam Makes it's way to Delaware

We've recently received a rather official looking green envelope in the mail with the following menacing notice printed on the front:

IMPORTANT
Annual Minutes Requirement Statement
BUSINESS MAIL - TIME SENSITIVE

The sender is a company calling themselves:

Corporate Records Service
4142 Ogletown Stanton Rd. #612
Newark, DE 19713-4169

Inside you'll find "INSTRUCTIONS FOR COMPLETING THE ANNUAL MINUTES FORM" which lead you step by step to provide information and of course a payment to the sender. They promise to send you completed documents within four weeks.

If you receive it too, toss it in the trash.

Corporate Records Service is running what is becoming a well known scam. Just Google it. Better Business Bureau's across the land are issuing warnings about them, and we hope that anyone reading this post does so before it is too late.

So, what exactly is the big deal here?

Besides this business using an unethical 'scare tactic' to jolt you into doing something regrettable, there are plenty of reasons to stay clear:

1. This mailing is timed suspiciously to coincide with the Delaware Corporation Franchise tax and Annual report filing, and the fee also mimics the minimum annual report filing fee and franchise tax charged by the Delaware Division of Corporations. It is designed to intentionally confuse people who have a legitimate requirement to file an Annual Report with the State of Delaware.

2. It compels you to provide private, and potentially sensitive corporate information to a complete stranger. A privately held Delaware Corporation does not have to report shareholder information to anyone. Unless you are compelled to by a law enforcement agency, or a court of law, shareholder information is private in Delaware!

3. It leads you to believe you are required to complete this 'official looking' documentation and make a payment. It does not plainly indicate that the company is selling a service (if in fact they are even selling a service). Hey, we are all for entrepreneurs- we help them all the time. We're not for unethical, and deceptive business practices. If your service has value to your market, there's no reason to try to trick people into using it.

4. We can't find a company legitimately doing business in Delaware going by the name "Corporate Records Service" anywhere. Check for yourself (for free):

Delaware Division of Corporations online entity search

Delaware State Courts Trade, Business, and Fictitious Names search

If you are a real company or even legitimately conducting business in this State, you'd show up in one of those searches. There's no evidence that Corporate Records Service is a real company or that they are legitimately doing business in Delaware. There's no way to contact them, no phone number, no email, no website, otherwise we'd call them to ask them ourselves...

Remember folks, if you are a Delaware Corporation, you do have record keeping responsibilities, and you should be informed about them. There are plenty of free resources out there to help you with that, and some pretty good low cost ones too. If you have a Delaware Registered Agent, then they can help you out with that. If they can't or don't, then give us a call and we will give you some information for no charge.

Sophisticated scams are nothing new. Unfortunately, they tend to make lots of money for the perpetrators. We sincerely hope that you don't fall victim to the Corporate Records Service scam.

posted by Unknown at 5:02 PM - permalink 3 comments

3 Comments:

I am amazed that someone would go through all this trouble. I looked at the letter and it does look official. That is some unsettling information

By jatto, at 10:20 AM

I am amazed that someone would go through all this trouble. I looked at the letter and it does look official. That is some unsettling information.

By jatto, at 10:21 AM

I find it amazing that people have so much time on their hands to sit around and think of scams like this. If they applied that time to legitimate endeavors, maybe they’d find success in an ethical way.

By Ami Casper, at 10:23 AM