Move Your Business- The Right Way
Have You Moved?
Anyone who has ever moved can tell you its harder than you would expect. Between packing, changing addresses and updating your mail most people feel overwhelmed. The same can be said for when you move your business
Moving your business is not as simple as you might think.
Have you or your company moved at some time during it’s existence? If so, do yourself a favor and double-check both the registered office and the physical address indicated for your company’s filing at your state’s secretary of state’s office. While you’re at it, read our past blog article entitled, Do You Know Your Own Company Name??!?
Moving your Business is Often a Big Problem
Most often companies are formed when they are very small. They arise from someones garage or temporary office. This is usually not a problem- until its time to move your business.
The problem most often arises when business owners or staff fail to update the company records at their secretary of state’s office. When you move your business it’s critical to keep the registered office at your secretary of state’s office current. This is because when someone sues your company, most states simply require the plaintiff to serve your registered agent at the registered office listed at the secretary of state. If that address is incorrect, you may never see the complaint, which means you cannot respond to something you don’t know about. When you fail to respond to a complaint, you risk a default judgement.
When you move your business, make sure your registration stays current!
Avoid trouble when you move your business! If a plaintiff wins a default judgement against your company, it means you and your company automatically lost whatever legal case was made against your company, and as a consequence, the plaintiff will start seeking to collect whatever damages were awarded using the power of the court to do so. For example, a plaintiff could obtain a Writ of Execution where the court permits seizure of property, seizure of bank accounts, and more.
All is not lost when a default judgement occurs. If you’re the unwitting recipient of a default judgement, you can ask the court to “set aside the judgement” which is asking the court to void or nullify the previous default judgement. Doing this is far from certain, and there are a number of rules that constrain whether a court may, or may not, agree to set aside the judgement. One factor is time. Different jurisdictions have different rules, although six (6) months is very common among many jurisdictions — you are limited in time from asking the court to set aside the judgement.
Furthermore, many jurisdictions will only agree to set aside the judgement in specific factual instances, such as fraud, excusable neglect and failure to properly serve.
When a plaintiff properly serves the registered agent at the correct registered office listed at the secretary of state’s website, the plaintiff has properly followed the law, even though you never received the complaint. This is negligence on your part, and courts do not take kindly to such mistakes. Oftentimes, if your excuse is simply that you forgot to update the secretary of state’s database, a court may not be willing to set aside the judgement and they will therefore let the default judgement stand — even in instances where the facts were clearly on your side and you would have won the case, if you had received the complaint.
Just Double-Check Your Company’s Listing at the Secretary of State’s Website
Given the potential problem for a default judgement, just do yourself a favor when it comes time to move your business: Double-check the listing for your company within the state your company is registered. Check for:
- The correct name and spelling of your company name;
- The correct name for your registered agent;
- The correct address for your registered office;
- The correct physical address for your company, if it has one;
- And verify that your company is “in good standing“.
If any of the above is wrong, you owe it to yourself, your company and its owners, to update that information immediately. If you need help, contact us with any questions about your business
Law 4 Small Business, a little law now can save a lot later.