CPS & The Statement Of Information Letter

Sep 2, 2020

I RECEIVED A LETTER FROM CPS last fall. About to chuck it into a pile of unwanted mail, I saw that it looked like an official government document, so I nervously tore it open.

It read in bold letters:

2020 – STATEMENT OF INFORMATION – INSTRUCTION FORM (California LLCs)

The notice was pre-populated with my company’s Secretary of State entity number and formation date, LLC managers’ names, and our business address.

CPS's Statement of Information Letter for California LLCs

CPS Statement of Information Letter

The letter started with a warning about a late fee:

California laws require every limited liability company authorized to transact business in the state to timely file a statement of information every other year. If SEPTEMBER PEOPLE, LLC does not timely file a statement of information, a $250 late fee may apply.

I didn’t think that I was late with my filing, but the possibility of being slapped with a $250 fine was alarming.

The letter continued with a section of the California Revised Uniform Limited Liability Company Act:

“California Corporations Code § 17702.09: (A) Every limited liability company and every foreign limited liability company registered to transact intrastate business in this state shall deliver to the Secretary of State for filing within 90 days after the filing of its original articles of organization or registering to transact intrastate business and biennially thereafter during the applicable filing period, on a form prescribed by the Secretary of State, a statement of information…”

Now for the pitch:

If the business entity is still in use, CPS will assist in the filing of your statement of information.

 

Mail in the completed form with $120.00 in the enclosed envelope. Please respond today!

$120 seemed rather steep. I was pretty sure I didn’t pay that much to file my Statement of Information in the past.

Reviewing my records, I saw that my Statement of Info was not due for another seven months. The last time I filed, I did so directly through the Secretary of State website. The filing fee was $20, not $120.

Beyond the $20 filing fee, the Secretary of State gave me the option of paying $1 to have a hard copy mailed to me. For an additional $5, I could choose to have the hard copy certified (stamped, signed, and dated on the back).

And for the best deal of all: if I wanted a PDF copy of my Statement of Info, the Secretary of State would email it to me for free.

There was something fishy about CPS and their $120 fee to file my Statement of Information.

Who Is CPS, And Why Do They Charge $120 To File A Statement Of Information?

Curious to find out who was behind this, I called the number provided in the mailing: (916) 244-3826. CPS also had a toll-free line, but I decided to try the one with the “916” Sacramento area code.

The woman who answered said that CPS is a private company that takes care of Statement of Information filings for people who don’t have access to a computer.

Please note that it is possible to file your California Statement of Info without internet access or a computer, as you can easily request a hard copy form from the Secretary of State. I’ll get to that below.

She also said that using CPS is cheaper than an accountant or attorney.

I’m not sure how much they typically charge to file a Statement of Information, but you don’t need to hire an accountant or attorney to complete this simple task. I’ll explain below how easy it is for a small business to file on their own.

I asked the woman how CPS obtained my business info. She said that it is public information.

Unfortunately, this is true.

Business data is readily available for anyone – legit or otherwise – to access through the Secretary of State website. Companies can easily mine data from the site, then solicit unsuspecting businesses, hoping to mislead them into paying dubious fees for their services.

CPS’s $120 charge includes a “state fee” ($20) and CPS’s “processing fee” ($100). This is a 600% markup for a chore that you can take care of yourself.

I had more questions to ask, but the woman sounded annoyed, so I thanked her and hung up.

Not ready to give up, I searched for CPS on the California Secretary of State website. There were 55 LLCs and 119 corporations with names containing the letters “CPS.” None appeared to be the company that sent me a Statement of Info letter.

I called again a few days later, and a different woman answered. I asked about their services, and she explained that CPS solely files Statements of Information and send notices to LLCs every two years.

I asked her for their location. “Our call center is in Michigan,” she replied.

“So, are you based in Michigan?” I asked. She refused to say where they were based and repeated that their call center is in Michigan.

What’s your physical address? “We don’t have a physical address. Everything is done by mail.”

Do you have a website? “No, we don’t have a website.”

How long have you been in business? “Two years.”

At this point, she said she wouldn’t answer any more questions, but I quickly asked before she hung up, “What does CPS stand for?”

“CPS doesn’t stand for anything. It’s just letters.”

Who Does CPS Target?

Does CPS target small, independent businesses only, or do they blindly blast any LLC they find on the SOS website? My company is a small one that does web development, graphic design, and branding. I take care of all of our administrative tasks.

If I’d had no prior experience filing Statements of Info, I might have signed CPS’s form and mailed them a check without thinking twice. If I had been in a rush, I could have mistaken them for a legit government agency. I believe their mailing can easily fool anyone.

Curious to see what others had to say about CPS, I poked around online and found that many business owners across the US have received solicitations from CPS. A lot of them left unhappy reviews on Yelp.

CPS's Yelp page as of August 2020

CPS’s Yelp page

As of September 2020, 42 individuals from California, Minnesota, Indiana, New York, New Jersey, Colorado, Ohio, Florida, Georgia, and Hawaii have reviewed CPS. 31 reviews were active, and 11 were hidden or “not currently recommended” by Yelp. Each person submitted a one-star rating with complaints about being solicited by CPS to file a Statement of Information or similar business document.

Companies And Addresses To Be Aware Of

On the Better Business Bureau website, I discovered several companies that appear to be related to CPS:

  • CPS Filing Services
  • LLPS
  • Workplace Compliance Services
  • ANS Inc.
  • Mandatory Poster Agency
  • State-Name-Here Labor Law Poster Service (there are 50 of these businesses, and they apparently use mail-solicitation tactics similar to CPS to hawk overpriced labor law posters)
  • State-Name-Here Council for Corporations (there are 6 of these)

The URLs above link to Better Business Bureau pages. The Workplace Compliance Service BBB page is particularly interesting because it contains alerts from the State of Hawaii Department of Commerce and Consumer Affairs (DCCA) Business Registration Division (BREG) and the Oregon Secretary of State.

Also, take note of the business management and contact info on these BBB pages. They appear to be a group of people who share a last name.

Finally, I noticed that the addresses associated with these businesses lead to UPS stores in capital cities, so it’s easy to mistake them for government agencies.

The return address for the letter I received from CPS is a UPS store mailbox in Sacramento, the state capital of California:

1026 Florin Road #312
Sacramento CA 95831

How Does CPS Get Away With This, And What Is Being Done To Protect Business Owners?

In California, Assembly Bill 75 requires the following disclaimer on misleading solicitations:

THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY GOVERNMENTAL AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT.

Disclaimer on CPS's Statement of Information Letter

 

Although it’s required to be set in 12-point, bold capital letters, the disclaimer can be easily overlooked on a cluttered page.

Envelopes are required to display the following statement to keep within legal limits:

THIS IS NOT A GOVERNMENT DOCUMENT

CPS's Statement of Information Envelope

CPS’s Statement of Information envelope

It’s easy to miss since the text blends in with the postage mark above it.

Something to note about the postage mark: the letter originates from Anaheim, CA (zip code 92807), even though CPS’s mailing address is about 400 miles away in Sacramento.

It’s disheartening that companies can legally deceive people just by following a few guidelines.

The regulations are a good start, but they are weak. Business owners need to be informed of a legitimate filing option, and it needs to be printed directly on the misleading document.

At a minimum, the state should require a link to the Secretary of State website, with instructions clearly explaining how to file a Statement of Information directly with the SOS, and the SOS’s $20 fee.

Read more information about Assembly Bill 75 here.

It’s Easy To File Your California Statement Of Information Yourself

Instead of paying a third party a hefty fee to file your Statement of Information, you can do it on your own. There are three ways to do this.

 

Option 1: File Online

The fastest and easiest way to file your Statement of Information is through the California Secretary of State website.

Bizfile - California Secretary of State Website

Bizfile is the California Secretary of State portal for businesses filings, searches, and business records

To file a Statement of Info for your LLC, click on the “LLC Statement of Information” button, which will take you to this page:

California Secretary of State Website

LLC Statement of Information page on the California Secretary of State website

Search for your LLC name or entity number and follow the instructions on the subsequent pages.

Quick and painless, the process took me less than 20 minutes to complete. I paid my $20 fee and submitted my email address to receive a free PDF copy of my filed Statement of Information.

 

Option 2: Complete A PDF Form

California Secretary of State Statement of Information PDF Form

The official Statement of Information form

If you don’t want to file online, complete a PDF form, then mail it to the Secretary of State or drop it off at their office. Their mailing address is different from their in-person address; refer to the instructions on the form for the addresses.

You can download the form through the Secretary of State website.

Or, you can request the form via email.

 

Option 3: Complete A Hard Copy Form

As I mentioned earlier, CPS said that they file Statements of Information for those who don’t have access to a computer or the internet. I contacted the Secretary of State, and it is possible to file without a computer or internet access.

You can pick up, complete, and file the Statement of Information form at the Secretary of State’s office in Sacramento. If you can’t make it to their office, you can request to have a form mailed to you by calling (916) 657-5448.

Once you’ve completed the form, mail it to the Secretary of State or drop it off at their office. See the instructions on the form for their addresses.

Please note that this information is current as of September 2020. In case things have changed, and for more info, visit the Secretary of State website.

When To File Your Statement of Information & Current Fees

In California, we are required to file our Statement of Information at the following milestones:

 

Milestone 1: File Your Statement Of Information When You Start Your Business

You need to file your initial Statement of Information within 90 days of forming your LLC.

The filing fee is $20. You can request to have a hard copy of the completed Statement of Info mailed to you for $1. Add $5 if you want the hard copy certified. If you want a PDF copy of the completed Statement of Info emailed to you, it’s free.

California Statement of Information certification stamp

The certification is stamped, signed, and dated on the back of the California Statement of Information. For what it’s worth, 2016 was the last year I had my Statement of Info certified and mailed to me. Now, I just request a free PDF copy sent via email.

Milestone 2: File Your Statement Of Information Biennially

After filing your initial Statement of Information, you will need to file another one every two years.

The fees are the same as the initial Statement of Info, and you can request to have a PDF copy of the completed Statement of Info emailed to you for free.

The Secretary of State will mail you an official reminder postcard a couple of months before your biennial filing is due.

Warning: CPS conveniently sends out their Statement of Information solicitation a few months before the official Secretary of State reminder notice is scheduled to land in your mailbox. Keep an eye out for your official reminder.

This is what the official notice from the California Secretary of State looks like (front and back of postcard):

Reminder notice postcard - California Secretary of State - Statement of Information filing

Milestone 3: File Your Statement Of Information When There Are Changes To Your Business Information

If you have any changes to your business info between the two-year filings, you need to file a Statement of Information noting these changes.

This filing is free. You can request to have a hard copy of the completed Statement of Info mailed to you for $1. Add $5 if you want the hard copy certified. If you want a PDF copy of the completed Statement of Info emailed to you, it’s free.

Please note that this information is current as of September 2020. For the most up-to-date filing instructions and additional info, visit the Secretary of State website:

https://www.sos.ca.gov/ or

https://llcbizfile.sos.ca.gov/SI

Tips To Avoid Getting Scammed

Some of these tips may seem like common sense, but scammers are experts at deception, and it can be easy to fall prey to their schemes when we least expect it.

A scammer might solicit you through physical mail, email, text messages, phone calls, or in person, at your doorstep.

When you suspect that a scammer is targeting you, check your records to see if you owe anything for the service or product in question. Even if you are officially due to make a payment, scrutinize the solicitation for authenticity.

Look out for unusual grammar and misspelled words. Verify contact info, including return addresses, email addresses, and phone numbers. Confirm that the payment amounts shown are correct.

If you suspect that someone is impersonating a company you do business with, reach out to the company directly via the contact info on their website or another reliable source. Don’t use the contact info on the suspicious mailer or solicitation.

If a person or business seems shady, do an online search of their name, phone number, and address. Add words like “scam,” “fraud,” “complaint,” or “legit” to your search to see if others have made complaints.

If someone is conveying a sense of urgency, that’s a red flag. Don’t panic. Take a step back and do some research, whether checking your records, doing an online search, or consulting an official.

Bonus Privacy Tip For Home-Based Business Owners

Anyone can access your Statement of Information data indefinitely. Even if you shut down your business and dissolve your LLC, your info will remain publicly available.

This may sound morbid – but even after you die, your info will remain publicly available.

I repeat – your info will always be publicly available.

For home-based businesses, the required data in the California Statement of Information that I feel are particularly sensitive are our addresses:

  • Street addresses of principal office (P.O. boxes are not allowed)
  • Mailing address of LLC
  • Street address of California office (P.O. boxes are not allowed)
  • Addresses of the LLC’s managers or members
  • Street address of the agent for service of process (P.O. boxes are not allowed)

If your privacy is important to you (as it should be), don’t provide your home address in your Statement of Information. Instead, if you work out of your home, I recommend using a mailbox service for your business correspondence. Since P.O. boxes are not allowed for some address types, you’ll need to rent a non-USPS mailbox. Unfortunately, this creates another expense for your business, but it is absolutely worth your privacy, safety, and peace of mind.

Why I Wrote About CPS

Business owners need to be aware of companies that could be mistaken for government agencies. We also need to know who we are sending our money to. Paying an extra fee to a third-party service like CPS to file your Statement of Information is your choice, but there are other options. In my experience, I’ve found that it’s easy to file a Statement of Information without outside assistance, and the Secretary of State provides us with several simple ways to do so.

This article does not provide legal advice.

I’m not a lawyer, accountant, or business adviser. I am a small business owner sharing my experiences and research. I hate seeing business owners (or anyone for that matter) get manipulated, so I hope that this post will help you make informed decisions and prevent you from getting hurt.

Keep Up To Date With The Secretary Of State

Processes, regulations, and fees may have changed since the time I wrote this post.

For accurate and current information, head over to the California Secretary of State website.

Be vigilant, and stay safe!

About The Artwork On This Page

The Hero Image

Since this topic of this article is admittedly dull, I tried to liven up this post with fun images. The hero image is an ukiyo-e (woodblock) print, titled Fumiyomu onna. It was made in the 1780s by Japanese artist Utamaro Kitagawa.

Perhaps Fumiyomu onna illustrates my bemused expression as I read CPS’s letter.

The Background Pattern

To express the ridiculousness of someone trying to deceive you, I used a background pattern of warped lines for the hero image and some supporting images. I created the pattern with the Envelope Distort function in Adobe Illustrator. Here’s a YouTube video that shows you how to do this.

Image Sources

I used screenshots and scanned hardcopy mailings to develop the supporting images.

The ☛manicules☚, or pointing hands, are from Thunder Pixels Co.

Fumiyomu onna is available for download as a public-domain image from the Library of Congress, which hosts over 15 million free-to-use digital assets. When you’re in a pickle looking for unique art to illustrate your blog posts, the Library of Congress is a fantastic resource.

If you’re interested, I wrote an article about downloading free public domain images courtesy of the Library of Congress and other government agencies like NASA (Visible Earth) and the National Library of Medicine. You might be surprised at the unusual finds out there for the taking.