Remember when you incorporated there was a step for entering the directors of your company? In that step (https://www.johnonbusiness.com/form-a-corporation-in-7-easy-steps/#Directors) you could list out the primary people at the head of your organization if you wanted to disclose it even though it wasn’t required. I said not to bother since you’d have to do it again anyway in the Statement of Information and that’s what this article is about.
Basically within 90 days of incorporating and every year thereafter (for a C or S Corp) you have to file a statement declaring your corporate officers, directors and address for process service. For us small businesses it’s pretty easy and can be done entirely online. The cost is only $25 as charged by the state of CA so don’t get suckered into paying more by many of the other businesses that offer to file for you at an additional fee.
I know what you’re thinking – $25 is indeed pretty cheap. Why or how would you pay more? Well in California, and probably your state also, there will be companies that mail out a letter where the top looks like this (bold red letters added):
It looks super official doesn’t it? But it’s a total fake purposely designed to convince you to file your paperwork through them instead of the state directly. It’s a brilliant piece of marketing that makes me hate it that much more. Let’s dissect the header:
- Official looking form number in the upper left corner right? But there is no “501-C” form for the State of California. In fact the very next line, which I labeled “A”, tells you this isn’t a real government form. I’m sure they were legally required to put that there after a previous lawsuit. Just above the “A” you’ll also see it says, “A Non Government Agency”. That literally means NOT a government agency.
- I’ve marked the fee for this service with label “B” and it’s quite a bit higher than the state fee of $25. The rest of the form requires you to enter the exact same information that is on the real Statement of Information but at a premium price of $243. Why would anyone do that? Because they just didn’t read the section I labeled “A” and thought this was required. Don’t fall for it. Fill out the real CA form SI-550 instead.
- Labeled under “C” is the 4-6 weeks to process notification. Why does it take so long? Because this company has to retype everything you just typed below onto the real SI-550 form and mail it in for you. You don’t have to wait 4-6 weeks dealing with paperwork because the State of CA now has the form online and you can do it in 15 minutes by yourself. Don’t fall for this marketing. Did I say that already? Don’t fall for it.
Let’s take a look at the header of the real CA SI-550:
In contrast this header is a little sparse. Aside from the CA seal in the top left it actually looks less official in some ways, but if you search the internet for this form number you’ll find it’s legit. The rules and fees are spelled out and are reasonable. You can download this form off the Secretary of State’s web site or even better do it online in about 15 minutes. That’s what we’ll go over below. So lets head over to our favorite web site and get started: https://www.sos.ca.gov/
Table of Contents
Step Pre-1: Navigate to the SOS web site Statement of Information online entry page.
I would love to give you the exact steps to get to the online form, but I can’t guarantee their accuracy after today since it’s changed a few times in the last year. As of this moment there is a link titled “Business” in the header that leads you to a page where you can click the “Hot Topics” category that brings up a list of the most popular business items they handle. #3 in the that list is “Corporation Statements of Information File Online” which takes you to https://bizfileonline.sos.ca.gov/. Hopefully that last link remains accurate so you can simply click it and go straight there.
On that page you’ll see a small box of links like the one here. Third from the bottom is “File a Statement of Information” which is exactly what we want. Go ahead and click it.
At this point you may be asked to login if you haven’t already been asked. Create an account if you don’t have one since you’ll be using it at least once a year.
You’ll then come to a page that lets you search for your company so do that and it should show up in the list below where you’ll need to select it and then finally you’ll see something similar to this image below at the right side of your browser:
Obviously it will have your login and company information. If you don’t see the “File Statement of Information” button on the row under your business name or you DO see a “Request Access” button that means you’re not logged in and don’t have access to your files. Go ahead and take care of that first if you still need to. When you’re ready click on the “File Statement of Information” button and we’ll get started for real.
Step 1: Privacy Warning
The first page is just the state’s privacy warning and terms and conditions page. I’m the kind of guy who reads all that stuff and I always recommend you do too. You’ll need to scroll to the bottom to select the checkbox and click the “Next Step” button.
Step 2: Submitter
Who are you? Put it here. You should be able to figure this one out on your own… It says this information is optional but I’ve always filled it out. If they have any questions I want them to be able to reach me, especially because the Statement of Information is mandatory and I want to stay compliant. Click “Next Step” to continue forward.
Step 3: Entity Details
For your first statement or your first statement filed in 2022 or later the “Yes” radio button must be checked so you can get asked the labor judgement question(s) a few steps later. Normally if there aren’t any changes to your company structure, officers, service processor, address, etc… you can just select the “No Change” radio button and it seriously shortcuts the amount of work you have to do. No luck this year, plus I want to show you all the pages anyway. Again click “Next Step” to continue.
Step 4: Business Addresses
This is, not surprisingly, exactly what it sounds like. There are fields for your street, mailing and main office addresses and you’re required to fill out all of them. Yes they could have made it easier with a “Same as Street Address” checkbox but they didn’t so suck it up and type it three times. Copy/Paste is your friend. “Next Step” to continue.
Step 5: Officers and Directors
This is the fun page for me. As a single owner of the business I hold all the top positions at the company. While the positions of CEO, Secretary and CFO must be filled they can be filled by the same person. I’m also on the Board of Directors (as the Chairman actually) so of course I have to fill out that line also. If you’re a single owner it will be the same for you.
The address you use here is up to you. Some people say to put your home address but I get all business correspondence at my business address so I use that. It also gives me a bit more privacy since this document is public and I don’t really want people getting my home address.
If you’re a small company with a single director on the board your vacancies on the board should be “0” after you list yourself, but if your company is large enough to have multiple directors you may have a vacancy and would need to list that number here. In California the laws about the makeup of corporate boards are in flux and you may have to diversify your board by adding certain genders and under-represented groups. That may cause you to create more board seats which may be vacant, but that’s outside the scope of this article and doesn’t apply to single director companies anyway so let’s move on. “Next Step” to continue.
Step 6: Agent for Service of Process
By now you should be familiar with the concept of a process agent. If not you can read up on it here. Go ahead and fill it out according to what you did when you created your corporation (if it hasn’t changed, otherwise put the new information here). Again, “Next Step” to continue.
Step 7: Type of Business and Email Notifications
Put your main business activity in the “Type of Business” field and fill out the email section below if you want to receive reminder notifications and such. I actually think their reminder emails are pretty helpful with keeping you on track and compliant with state law and recommend doing it. If you had a third party handling all this for you then their email would go there instead, but as an empowered owner you’re probably doing this yourself like I do.
Step 8: Labor Judgement
This is a new step for 2022 in CA and I don’t honestly know too much about it. From reading the text below I can gather that if an employee or other party has brought a lawsuit or complaint about your company for which there is a judgement issued that you haven’t yet fulfilled you’ll need to select “Yes”. Here’s a simpler answer key:
- No employee/labor legal trouble = “No”
- Employee/labor trouble you’ve already resolved/paid = “No”
- Employee/labor trouble still in process = “No”
- Employee/labor judgement with pending appeal = “No”
- Employee/labor judgement (with no pending appeal) where you haven’t paid the fine or resolved yet = “Yes”
Take care of your employees!
Step 9: Review and Signature
If something needs to be corrected you can go back to that section by selecting the step on the left menu. If everything looks right then check the “Electronic Signature” box at the bottom, type in your name under “Signature” and click “Next Step”.
Step 10: Processing Fees
You didn’t really think you were going to get away scot-free did you? At least $25 beats the $243 offered by third party services to do the same thing! A certified copy isn’t necessary unless you need to prove to a bank that you’re in good standing (some require it to open an account, but not many). For my very first Statement of Information I got one but I don’t bother anymore. You can always request one later if you need it, though it may cost more than $5.
Check the box if you want it and click “Next Step” to move to the last steps.
Step 11: File Document
This is just a final page for you to get cold feet and bail or click “File Online” to submit your credit card information and get it done. I didn’t take a screen shot of that one and expect you’ll be able to fill it out. If you have a corporate card make sure you use that instead of your personal card. This is a business expense after all!
That’s it! Too easy drill sergeant? Yes it is. That probably took you 10 minutes and only cost $25 so don’t get suckered in by these marketing scammers. Take the reins and do it yourself!
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