Why was my Corporate Filing Rejected?
Forming a new Delaware company is an exciting milestone on the journey to business success and reaching your goals. However, in the midst of that excitement, it’s not uncommon for small mistakes to occur during the actual filing process, which may delay the start of your business or cause additional and unnecessary obstacles.
Nevertheless, there are several important nuances to consider when forming a Delaware company. In this blog, I’ll highlight some of the most common mistakes clients make when filing formation documents with the Delaware Division of Corporations or placing formation orders through Harvard Business Services, Inc. (HBS).
Common Rejections for Filings in Delaware
- The Business Name Isn’t Available
- The most common reason why a company filing is rejected is because the company name is not available in Delaware. Clients sometimes might not check the name in Delaware or fail to enlist a filing service such as HBS to check the name for them. It’s also important to note that Delaware does not factor corporate endings into company name checks. Therefore, if there’s an existing Delaware LLC with the name Delaware Baseball LLC, this also means that the name Delaware Baseball Inc. will not appear available in Delaware for a Corporation formation. HBS will check the company name prior to filing with the state to ensure a smooth process.
- Incorrect Entity Type
- Clients occasionally select the incorrect entity type when forming their Delaware company on their own. It’s not unusual for clients to include language in the formation documents that corresponds to a different entity type than the one they intended to establish. This is another reason why clients choose to work with a filing specialist such as HBS to ensure a stress-free filing process.
- Wrong Corporate Ending
- At times, clients may overlook including the required corporate ending in their company name when filing formation documents. For example, even if a client properly prepares and submits a Certificate of Formation for an LLC, they might list the company name simply as “Delaware Baseball” instead of the correct full name, such as “Delaware Baseball LLC”, “Delaware Baseball L.L.C.” or “Delaware Baseball Limited Liability Company”.
Also, as it pertains to a Corporate ending, sometimes, clients will list SLLC when forming a Series LLC, but this is not a Corporate ending for a Series LLC. Or, clients sometimes might list a word that they think is a Corporate ending, such as Delaware Baseball Initiative, when ‘Initiative’ is not considered a corporate ending for a Delaware Corporation.
- Incorrect or Incomplete Filing Documents
- When clients prepare and file their own formation documents in Delaware, they may occasionally include incorrect or incomplete information. For instance, they might list an improper signature for the Authorized Person signing the Certificate of Formation for an LLC, or omit the required mailing address of the Incorporator when signing the Certificate of Incorporation for a Corporation. Or, for a Corporation formation, they may list that the Corporation will have different classes of shares but fail to list the total authorized shares of each class within the Certificate of Incorporation. Many clients elect to have a filing specialist such as HBS prepare and file the formation documents for their Delaware company, as HBS can sign the Certificate of Formation as the Authorized Person for an LLC and as the Incorporator for a Delaware Corporation formation.
- Errors with Registered Agent Information
-And finally, another common filing mistake is neglecting to enter a Delaware-based Registered Agent on their Certificate of Formation/Incorporation. Or, sometimes, clients will list their own name and address as the Registered Agent, which can be done, but only if they’re physically based in Delaware. Also, when entering the Registered Agent information for Corporations, one small piece of information that clients sometimes omit is the county where the Registered Agent is located in Delaware.
HBS offers great value throughout the formation process, such as checking the company name in Delaware, preparing and filing the formation documents, and serving as your Delaware Registered Agent, making the process as seamless as possible.
Also, HBS doesn’t only assist with forming Delaware companies. HBS can also help form companies in other states, serve as the Registered Agent, and help with amendment filings and annual reporting in other states as well.
If you have any questions about forming a Delaware company or a company in another state, feel free to contact us at 1-302-645-7400 or 1-800-345-2677 ext. 6900 or via email at info@delawareinc.com.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source's content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.