Mistakes that Take the Cake
September 26, 2022 | By Candace Groth
Corporate attorneys tend to see recurring mistakes that businesses make, and the large impact they can have. This article summarizes four common errors we see at Vela Wood, in the hopes that you (the reader) can avoid them.
State Annual Filings
Many businesses forget to file or simply ignore business annual reports that most states require. Each state has their own due dates and report to submit. The reports are very often free or low cost if submitted on time. The penalty for failure to submit is steep, however; you may no longer legally exist as a company (due to the state administratively terminating the company). It is important to ensure all necessary annual reports are filed in a timely manner.
What’s in a Name?
A lot, it turns out. A business’s legal name is one of its most important assets. Therefore, it is very important that the name is reflected 100% accurately on all documents the company executes. Extra spaces, forgetting a comma, adding Corp or Corporation instead of “Inc.,” using LLC instead of Ltd. – these all matter. At best, a name error will cause confusion. At worst, you have a lawsuit or even the wrong party involved. Please make sure to know and use the correct business name.
Dates
Many businesses forget to fill in the Start Date on Agreements, or the date on a signature block. These dates help identify the Agreement, or in some cases define the start date, notice periods, or other important dates later on in the Agreement. Be careful to not forget your dates!
Descriptions of Services
Businesses hire other businesses for a multitude of different things. But in the excitement or rush to get the contract signed, they do not always fill in a good detailed description of the services or products being paid for. If one party does not deliver the services or products they promised, the description and the words used become very important to prove damages and recover losses. By way of example, if the business is purchasing a blue truck with red wheels and a sun roof, the contract should say that, not just “truck.” Be specific in your services/product descriptions. The business (and your attorney) will thank you later for your specificity.
To summarize, do not forget your AND’S.
Annual reports
Name
Dates and description of
Services
About the Author(s)
Candace Groth
Candace Groth is a senior attorney at Vela Wood. She focuses on mergers & acquisitions and complex LLC matters.
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