Beware Of The Business Filing Division Scam When Registering For An LLC

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Whenever there is fear and confusion, there is someone out there to exploit it. A buddy of mine contacted me the other day after he received this ominous letter demanding 239 dollars after filing for an LLC in the state of California.

The letter also threatened him with additional fines if the 239 dollars was not paid immediately.

scam

Photo by jepoirrier

My friend was already somewhat apprehensive about the entire filing process so when he showed me this form letter from the “Business Filings Division” asking for 239 dollars, he was pretty shocked and visibly upset.

I was surprised myself because when I filed for my LLC, I didn’t remember having to pay any fee costing over 200 dollars.

In any case, when I looked carefully at this form letter, I immediately knew it was a scam and a clever one at that! These people over at the “Business Filing Division” are preying upon innocent people who don’t know what they are doing or are new to the filing process.

The Scam

Anytime you file for an LLC in California, you are required to submit a “Statement of Information” within a set period of time. The true cost of filing this form is only 20 dollars and the real form usually arrives along your official LLC filing papers.

However, the “Business Filing Division” will also send you a form which looks almost exactly like the “Statement of Information” asking you to pay $239 dollars or risk getting fined by the state!

The information that you need to enter on their bogus form is the exact same information that is required on the real “Statement of Information”.

If you fill out their form and pay the $239, the “Business Filing Division” just copies this information onto the real “Statement of Information” and sends it in. Since it only costs $20 to file this form, guess who pockets the other $219?

This scam is especially slick because the form and the envelope look completely official. The form itself has a government seal on it and the address of the business is located in Sacramento which is where you would expect a government building to be located.

The only real clue that it is a scam is that it says “This is not a government document” on the envelope beneath the return address.

When I saw the letter, I had to read it like 5 times before I was positive it was just a bogus letter. In other words, YOU DON’T HAVE TO FILL IT OUT!

The fact that the California state government is bankrupt lends even more credibility to this scam because you think that this could be the government’s way of extracting more tax dollars.

In any case, if you ever receive anything from the “Business Filing Division”, chances are it’s bogus. I’ve attached a copy of the form letter below. See for yourself.
scam

Do Your Homework

Scams like the Business Filing Division only work if you don’t do your homework. If you ever receive any form that is suspicious and asks for money, you should contact the government directly or consult a small business accountant.

I’m sure that these guys scam thousands of people every day and quite frankly it really pisses me off.

I’m surprised that the government doesn’t crack down on companies like these who are preying on the innocent entrepreneur. In any case, now that you know the “Business Filing Division” is a scam, please spread the word.

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37 thoughts on “Beware Of The Business Filing Division Scam When Registering For An LLC”

  1. Chi says:

    Yeah, the first time I got one in the mail I was worried too, but if you look for the fine print you will always see what you referenced, the “not a govt document”. Just reminds you that anything you get in mail you have to be careful and do more research.

    1. @Chi
      Yeah research is the key. Ideally you should go straight to the state to gather your intel because the web contains all sorts of misleading information

      @PeakPersonalFinance
      I’m sure that the “This is not a government agency” is there just to protect themselves legally. I’m surprised that it’s not written in smaller print. If they were not intentionally trying to mislead people, they wouldn’t have made the form so official looking. I wonder how much these guys make off of this scam. I wonder if it affects other states as well.

    2. Quynh says:

      Be careful if you see a letter from the CFU (Corporate Filing Unit). Looks very official as well. Located in Los Angeles. Fee was $185. If fee was not paid by due date on letter, a message about a $250 fine would be imposed upon the business. I am so glad that we came across your site to find out that this was in fact a scam.

  2. Wow, that is over the top! Looks like they’re just quoting the statute requiring annual filings — and a penalty if you don’t file — then telling you to pay them $239. For what, it is not clear — presumably to file the info with the appropriate office. Though the language over the signature block does say they aren’t a government agency, the overriding purpose of this seems to be to mislead folks into thinking this is a government requirement. They should be reported to the State Attorney General’s office.

  3. Before I left California recently, I received that letter too. I called the number I had on my legit LLC documents and they told me that wasn’t their letter. Thank you for getting the word out!

    1. @Carla
      I’m glad you didn’t fall for it. I just did a google search on these guys and it turns out that they’ve scammed a bunch of people already. It seems to be limited to California for now.

  4. Wow, Steve, that’s scary! Good thing you’re so smart. :-)

    I’ve stumbled and re-tweeted this article and I’m going to share it on FB and Plurk, too. I’m not in CA but I know people who are.

    Thanks for the warning!

    1. @Michele
      Thanks for helping to get the word out. The best way to fight these guys is to make everyone aware of it.

      @Colin
      I’m surprised that there isn’t much Google collateral out there about these guys. I only saw 2 other articles. Perhaps this is a relatively new scam.

  5. Oh man, I totally almost fell for the same thing. Their seal looks legit and everything. I just happened to read some VERY fine print that vaguely suggested they weren’t a governmental body and then Googled them, only to find that they were a scam.

    Amazing that they get away with fleecing people like that.

  6. Thanks for the heads up. That’s so rotten. How can they use the state seal? You’re right when you said,

    “I’m surprised that the government doesn’t crack down on companies like these who are praying on the innocent entrepreneur.”

    1. @Jane
      The unfortunate thing is that even if the government cracks down on these guys, they’ll probably just pop back up somewhere else. You just have to be careful

  7. Steve, I need a bit of help understanding how this scam is even possible.
    You stated that [t]he true cost of filing this form is only 20 dollars and the real form usually arrives along your official LLC filing papers.

    Is there some sort of delay between when you initiate the process of creating your LLC and the receipt of the filing papers?

    I can understand if that is the case. That leads to the next question:

    Where and how do the fraudsters find out that you intend to create an LLC?
    Judging from the image you posted, they have access to the California LLC number, which must mean that your LLC is public information BEFORE the process is complete.

    I know that the creativity of the criminal mind knows no bounds, but I also feel that government agencies could do a better job of clarifying the procedures to applicants, so that such a scam can’t possibly get a toehold.

    If it turns out that you have to make a public declaration, then by gum, shouldn’t you have some privacy associated with it? At the very least, why can’t you pay the $20 when you make the public declaration? That way, you’re DONE with that filing!

    On a brighter note, I enjoy your posts here!

    Cheers,

    Mitch

    1. Hey Mitchell
      I believe that both the real form and the Business Filings Division form arrive at around the same time. One of the problems is that if you are new to the whole process, you are not really sure what needs to be filled out and when. You get several forms from the government that may or may not need to be completed depending on the nature of your LLC and how you want it to be taxed. Then along comes a form that looks official that asks for some money threatening penalties if it is not filled out on time. I can see how it would be very easy for someone to get confused.

      Once you file for an LLC, the information regarding your LLC must go public so any company has access to your information. I remember getting inundated with mail trying to sell me business related products when I filed.

      Someone who knows what they are doing would never fall for the scam but if you are new, gathering information about all of the necessary procedures and regulations is not always that straightforward. Hence companies like the “Business Filing Division” can make a profit.

  8. Thanks, Steve!

    The key seems to be that they arrive at the same time.

    Sheesh.

    As a result of this post, I’ll be more diligent when I make that move.

    Cheers,

    Mitch

  9. Thankfully in Colorado you can E-file everything. It saves a ton of time, prevents headaches and you know that you are dealing with the government, not a scammer.

  10. Patricia says:

    I smelled a rat when I received this letter. Something just didn’t feel right. I called the number listed and got a weird sounding voice message.I think the fact that the letter kept stressing how they will “SUSPEND” your ability to do business in CA is what tipped me off. Also the short time frame for paying the fee. What idiots!! I’m sure they haul in a lot of money with this scam.
    They should be boiled in oil.
    Just my opinion.

  11. jan Mendoza says:

    I got this letter on Friday! I almost whipped out my check book to pay it! DMV fees went up as with everything else so it seemed plausible! I looked over the SOC website and saw nothing of a 239.00 filing fee! Then I sent the SOC and email and got an immediate response that this was a SCAMOLA! I called the phone number on the letter. The lady said they were affiliated with the Secretary of State’s office!! I told them that I was going to contact the AGs office and for them to have FUN IN JAIL! SCAMMERS! Its aweful what they are doing to people in these crazy economic times!!!!! they are located at 980 9th street 16th floor.. US Bank Building!

  12. Robert says:

    I received this exact letter in the mail today. At first I was confused because I thought my Statement of Information was still current. I thought I missed some sort of requirement so I went to the California Secretary of State webpage (http://www.sos.ca.gov/business/be/forms.htm#llc) to see if there was any additional information regarding the Statement of Information. I could not find this form on the the State’s website and noticed that their form was labeled LLC-12 and only required $20 to file. The form I had received had no identification number.

    This is when I googled: “Statement of Information for an LLC in California $239”. I saw that there was mention of $239 in your article so I clicked on it – and confirmed my assumption that something was fishy.

    Good gouge on the return address saying “THIS IS NOT A GOVERNMENT DOCUMENT”

    Thanks for putting this information out. I will be reporting this to the authorities tomorrow.

  13. betty says:

    Everybody should mail back the envelope with a written note to them, informing them that you’re on to them, and are reporting their butts to AG!!

  14. I was stupid and paid it … my LLC number is on the statement and I didn’t think twice because it says the amount due depends on the sales amount. I even read the Business Filings Division acronym BFD and thought it was ridiculous. I mailed it fast because it says suspension all over it. Today, I received another letter, now from Annual Filing Division, asking for $195 which also notes my LLC number. This made me suspicious to google it and find your post, Steve.

    I am hoping the stop payment takes affect before they deposit the check *sigh*
    Lesson learned. I appreciate the information and I am much smarter for it!

    1. Hi Kelly,

      You aren’t stupid. The scam was pretty slick and I’ve already gotten emails from many people who have fallen for the scam so you are not alone. The important thing is that now you know and you’ll never fall for anything like that again.

  15. Rodney says:

    This is just like the so-called “Annual Review Board” earlier this year. It might be the same group of guys. I’ve received this “Annual Filing Division” statement twice in the past 2 weeks, and I’ve shreded it twice. I hope the government does something about this because this is negligent misrepresentation and unwarranted solicitation.

  16. Charles Parker says:

    IF you have paid the $239 (or $235) and the check has already cleared, please email me at birdie1098@yahoo.com. If enough people have been scammed (say 1,000) then everyone can join on class action lawsuit against George A. Miller and the other scammers and work at getting your money back. I’m sure the group can find a lawyer who will sue at no up front cost to anyone who has been scammmed and the lawyer will only take a fee if you get your money back!

    Let’s take on these guys!

    The scammers set up there own California corporation, “Business Filings Division, Inc.” The agent for service of process is George A Miller at “GetINCToday, Inc.” in Burbank, California. If enough people got scammed, the entire group should be able to sue and try to get their money back!

  17. I got one recently from the “Annual Filing Division” asking for $195. The form does look legitimate, even with a K St address in Sacramento. CA really needs to put a stop to this.

  18. Joe says:

    This scam comes directly from a company named CorpFilers located in CA

  19. Mike White says:

    The persons responsible for the scam are George Alan Miller, Rebecca Miller, Arghisti Keshishyan and Kristina Keshishyan. I’m hoping they get jail time for the fraud they continue to run.

  20. Michelle says:

    Despite numerous law suits (Texas & NC among them) and ORDERS to cease and desist in 2009, these guys are STILL sending out letters (April 28, 2010). Received mine from “The State of Indiana” last week. We have multiple licenses mi multiple states so the rounds of paperwork and fees and filings NEVER end. Like you, I noted the “not a government agency” when looking for whom to write the check too. We almost fell for it. Not sure how they can still be getting away with it.

  21. I wish I had seen this BEFORE I fell for this scam.

    Anyway, I received a packet in the mail today (JAN 5, 2012) that there is a class action lawsuit against this guy. It is being represented by Kurtzman Carson Consultants of Novato, CA and in Superior Court in San Diego.

    Maybe I will get some of my money back, I had no idea!

    Thanks you guys.

  22. Bob says:

    I just got this letter today. I knew all the forms i needed to file, and it was past the deadline so i instantly got suspicious. It had no legit contact, or address outside of their po box. Also, the print of the letter looked funky. not what youd expect from the state of ca.

    however, the 1 thing that was by far off the most was the usage of the word “loose” instead of “lose”…

    what a scam. googled it and found this site. my letter came from the “Annual Business Registration”

  23. Leah says:

    I just got a similar solicitation in the mail today (10/4/12) from “Annual Business Registration.” I could tell almost instantly it was not legitimate because they were asking for payments to be sent to Los Angeles, which is never the case when you are dealing with the State of California. The solicitation was also rife with grammar and punctuation errors. I am sending the solicitation along with a completed written complaint form to the Attorney General. It’s a shame because small businesses often receive so much mail, I am sure for every 10 solicitations that go out, at least one pays because they don’t even realize it’s not legitimate correspondence from the state and they just want to get it paid and move on. If anyone is curious, I found this page on the California Secretary of State website with additional information and guidance on how to file a complaint:

    http://www.sos.ca.gov/business/be/alert-misleading-solicitations.htm

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