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Top Reasons Why Corporate Filings Are Rejected
Top Reasons Why Corporate Filings Are Rejected
You finally finished that LLC application for your business. You’re excited and ecstatic until you receive the bad news: LLC application denied. Before you panic, keep in mind that many application rejections are due to minor errors. There’s a good chance it’s an easy fix.
What to Do if Your LLC Application Is Rejected
When you get a rejection notice, take a deep breath. First of all, if you used Swyft Filings, we have you covered. Before we sent your incorporation documents to the Secretary of State (SOS), they were thoroughly reviewed by our team of expert processors.
If you received a rejection notice from us, it’s because our team of expert processors found something in your incorporation documents that needs correction. This rejection entry is considered “internal” because we haven’t sent the documents to the SOS yet. You’ll need to review your application, make some changes, or provide more information so that your next notice will read “LLC application accepted.”
In the less likely case that your application makes it to the SOS and is rejected, Swyft Filings still has you covered. Our team of processors will take a detailed look into the state’s pending request and upload a simplified version of the rejection to your account. You’ll receive an email with a link to your account, where you can respond directly to the rejection notice. When you’re finished, our team will update your application and resubmit it to the state.
If you miss the rejection email, there’s no need to worry. We’ll call your phone number on file if your application rejection goes unanswered after ten days. If you have any questions about your rejection or need more information, you can always call our customer service line, where one of our Account Managers will be happy to assist you.
7 Possible Reasons Your LLC Application Was Denied
Of course, we want to avoid having a rejected application in the first place. Knowing the top reasons why applications are denied will help you get it right the first time.
Reasons for denial can vary from state to state, as each Secretary of State has slightly different rules. Here are some of the most common reasons for rejection to keep in mind.
1. Company Name Is Not Available
A frequent cause for rejection is when another active business already uses the name you submit for your company. Additionally, some states may reject names that they consider “deceptively similar” to an existing business. In other words, if you try to start a fast food joint named “McDarnalds,” you will likely be asked to come back with something more original.
It’s essential to check name availability before submitting your application. If another active business is not using your chosen name, you can likely file for that name in your state. However, even if the name comes up as “not in use,” the state still has the final say whether the name can be used, and each state has its own rules.
For example, in Georgia, you can’t use the name of a previously closed business unless it’s been inactive for five years. In New York, you cannot use initials that aren’t part of the business owner’s name. So if you want to open a food truck named J.J’s Jambalaya in Buffalo, it’s back to the drawing board unless your name is something like Joyce Jackson. Check your Secretary of State’s website for any additional rules for your particular state.
Availability can also change at any time. You may have thought of the perfect name a few weeks ago, but if someone else filed for a similar name between when you checked and when you applied, you’d have to think up something new. That’s why it’s a good idea to reserve your name and file as soon as possible.
If your application is rejected because the business name is already in use, this is your opportunity to go back to the drawing board and come up with an even better name. Try playing around with the wording or changing it altogether. After checking to ensure the new name isn’t in use, you can use it to refile.
2. Proposed Business Entity Name Incorrect
When filing for a Limited Liability Company, you must include your company’s full proposed name on the application, including the “LLC” at the end.
Going back to our earlier example, J.J.’s Jambalaya would need to add the LLC to say “J.J.’s Jambalaya, LLC.” If you’re worried about that LLC looking too stiff for branding purposes (and losing the cool alliteration), you can file a DBA to display just “J.J.’s Jambalaya” on your sign and marketing materials.
If you don’t file a DBA, the name must be displayed exactly how you wrote it out when you incorporated. If you file with Swyft Filings, our processors will automatically add the designator with your choice of styling — LLC, L.L.C, Ltd Co, Limited Liability Co., or Limited Liability Company. An LLC formation can not use Inc., Corp., or Incorporated as these are reserved for corporation entity types only.
3. Registered Agent Address Outside State of Incorporation
Every LLC requires a registered agent, which can be an individual or a commercial entity. The role of the registered agent is to receive any formal correspondence from your state’s governing agencies and pass that information on to you. The registered agent must have an address located in the state where you are incorporating. If the registered agent is out of your state of incorporation, your application will be denied.
To rectify this problem, consider using Swyft Filings’ Registered Agent Services. We have registered agents in all 50 states.
4. Registered Office Address Incorrect
Your registration paperwork needs to include a registered office address that is an actual office location. If you work from a home office and list a PO Box on your application papers, that will flag a rejection. The registered address must have a valid street address. To solve this problem, change the registered office to a physical address.
5. Authorized Signature Missing
Articles of incorporation must have a signature from someone identified as an incorporator of the business. Without a signature stating that the contents of the application are correct, the application is not valid. Simply check that all information submitted is accurate to the best of your knowledge, add your signature, and resubmit.
Additionally, the signature method must be valid. Some states still require an original signature by your own hand, while others accept scanned signatures, electronic signatures, and typed confirmed signatures. Before you sign, find out which type of signature is required.
6. The LLC Effective Date Is Not Allowed
The effective date for your LLC Articles of Organization generally cannot be earlier than your filing date. If you would like to change your LLC effective date, you can set a delayed effective to any point in the future. If you are filing with Swyft Filings and have already submitted your order, you can still request a delayed effective date if our processing team has not started your filing.
7. Fines Are Owed for Doing Business in the State
If you are foreign-qualifying and have already been doing business, there may be penalties for failing to register with the state before conducting business. Before your LLC application can be accepted, you may need to pay late filing fees and accrued taxes.
Once you are officially registered, you will be required to submit an initial report and annual reports based on your state’s requirements. If you do not complete these filings, you will be subject to additional fines and extra fees.
Making Sure Your LLC Application Is Never Denied
Given the things that could go wrong when filling out your business incorporation application, it pays to take your time and double-check your answers. A few extra minutes making sure you’ve filled out the application correctly can save you a considerable amount of time later. But if your LLC application is denied, know that it’s generally an easy fix.
Swyft Filings is here to help. For answers to questions about your application status or if you would like help with corrections, contact Swyft Filings today. We’re more than happy to help you get your business approved as quickly and expediently as possible.