Business Masquerades as State Agency

My office has just filed suit against a deceptive operation masquerading as an official arm of state government. "Texas Corporate Compliance" warns Texas businesses about certain reporting requirements and liabilities that do not actually exist under state law. The operation even goes so far as to include the use of an icon that resembles the state seal of Texas, which the Secretary of State uses in its official correspondence.

Businesses are told that they must remit a $125 fee within ten business days to ensure that they meet state corporate reporting requirements regarding minutes of meetings of shareholders and directors. Neither the Texas Secretary of Stateís Office nor state law requires the kind of "disclosures" described in the solicitation. Corporations are required only to retain annual minutes.

The solicitation form falsely warns businesses that failure to complete a form and return it as directed could result in personal liability of a corporationís officers and directors. The Texas Business Corporation Act cited in the fraudulent solicitation letter does not place personal liability upon corporate officers for failure to file annual minutes. In addition, Texas Corporate Compliance warns that failure to file annual minutes can result in possible loss of the corporationís limited liability status, which is also false.

This deceptive operation, which has already been run out of Florida, is merely trying to scare businesses into paying for its services. I urge all business owners to read any solicitation for business services very closely. Documents relating to the lawsuit against Texas Corporate Compliance can be found on our website at www.oag.state.tx.us.

General Abbott's signature
Greg Abbott
Attorney General of Texas

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ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.

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