I had my house painted a few years back by a very capable painter and his small crew. He gave me a quote for the job and, at the time, it seemed like a lot of money — I mean a LOT of money. But my painter knew generally how long the job would take, the cost of renting the equipment he would need, and the materials he would have to buy.
I sometimes imagine what it would have been like if my painter billed for his work like most lawyers (including, regrettably, me on occassion) bill for their work. If I had paid my painter and his crew by the hour, I suspect that the initial time estimate would have been optimistically low and the hours actually billed would have been unexepectedly high.
So, you just received a notice from the Secretary of State telling you that your company was “administratively dissolved.” How did that happen, and what should you do about it?
Like most states, business entities (corporations and limited liability companies chief among them) in Washington are authorized to do business from year-to-year. That means that, on an annual basis, those in charge of the company must file a very simple “annual report” and pay a relatively inexpensive renewal fee. If a company fails to do that within the time required, the Secretary of State will note the entity as have been “administratively dissolved.”
Every once in awhile a prospective client will ask me to sign a non-disclosure agreement (the so-called “NDA”) before engaging me. I do see the irony in the fact that I provide a form NDA for my clients to use in their business dealings with others and, yet, I will never sign one in connection with an engagement for my own legal services. So just where do I get off?
During yesterday’s meeting of the SEC’s Advisory Committee on Small and Emerging Companies, the Committee considered whether to join the growing chorus calling for a ten-fold increase of the Reg A offering limit from its current $5 million to $50 million. In the end, the Committee supported the recommendation. But not without first questioning whether it would do any good.
A brief explanation: Reg A provides an exemption to the registration requirements for offerings of up to $5 million, if pursued in compliance with a number of conditions. Among these is a requirement to file an abbreviated form of offering circular with the SEC and each state in which the offering is made. As Reg A does not preempt state blue sky laws, some states, including Washington, conduct a “merit review” of any Reg A offering made within its borders.