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Typos on stock purchase documents
Anonymous4 views1 answers
Dear sir or madam,
We set up a California corporation in 2010. Since we had one of our employees to do the stock purchase things, we found out there were some problems.
1. We had a meeting about stock purchase. However, we did not have the minutes.
2. The employee put the endorsed date of corporation on stock ledger and stock certificate, instead of the date of sale stock.
3. The employee also put the endorsed date of corporation, instead of the date of sale stock on the 25102(f) notice of transaction.
How can we solve these problems? Fill out and sign new stock ledger and certificates? File a new 25102(f)?
I assume that what you are calling the “endorsed date of the corp” is what we lawyers would call the date of incorporation, i.e., the date that the Secretary of State accepted the Articles for filing. Responses:
1. As long as you actually held the meeting, it is not too late to do the minutes. They should show the date of the meeting as well as the date they were actually prepared.
2. You could line out the date and substitute the actual date of issuance on the ledger and the certificate, with a brief explanation of the correction on the ledger and the reverse of the cert. Or if you want tidy docs, you could reissue the certs and start a new stock ledger.
3. The Notice of limited offering exemption must be filed within 15 days after the first sale of shares in this state. A filing in advance of sale may not be valid. However, the Notice probably wasn’t filed till after the shares’ issue date, so it would be valid, even though the date is wrong.
The trap here is that if you ever issue additional securities and the Notice filing is defective, the Dept of Corps may demand a filing with the filing fees as if you had filed for a Permit, which can be considerably higher than the fees for filing the Notice. For example, the Notice filing fee for $99,000 in securities is $35; the Permit filing fee would be $398. So if the value of the securities is less than $25,000, the penalty would be minor. Further problem is that if you file later than the requisite 15 days, the same penalty applies. So you must decide whether trying to remedy the notice filing is worthwhile. By the way, the failure to file the notice does not affect the availability of this exemption
