General Counsel Manual

NOTE: Be sure you are subscribing for the exact business names you want to follow.

Practice Tip: If you are about to file a suit or claim against a business entity, subscribing to receive our notices of change BEFORE you file can help avoid problems. The reason is that business entities can, and often do, change their Registered Agents. Their agents also may change their addresses. If you miss one of those changes and serve something to the old pre-change Agent or address, you may not perfect service.

Practice Tip: If you are involved in litigation with a business entity, you may want to be alerted to any changes in the status of that entity with the Secretary of State. For example, it could be relevant to your ability to settle a case if we suspend an entity at the direction of the Department of Revenue.

Practice Tip: If you subscribe to receive change notices for your clients, you may be able to be proactive in representing them. For example, you may be able to quickly reach out and help a client resolve a notice of grounds for administrative dissolution.

Practice Tip: Consider advising your clients to consider subscribing for business entities they regularly deal with. Your clients may want to take protective action since “[a]ny act performed or attempted to be performed [by a suspended entity] during the period of suspension is invalid and of no effect”. G.S. § 105-230(b).

2. Using the Database as a Competitive Resource:

Practice Tip: You can use the database to proactively avoid issues with suppliers and contractors if you check it before you enter into a contract. You may also want to consider talking to your individual and business clients about checking the database before signing contracts. The reason is that an entity’s status might indicate something about its viability and effectiveness. For example, you may not want to approve a contract with an administratively dissolved business entity until it is restored to good standing. That could be a sign that the business is not keeping up with necessary paperwork. Contracting with such a business may increase risks to your client such as: losing money if the business is, in fact, financially unstable; or, having difficulty serving the business with process in the event of a dispute. Before you or your client contract with the entity, you might want to ask questions about the administrative dissolution to see if it has an explanation that satisfies your concerns.

Practice Tip: Consider adding a “current-active” status requirement clause for entities when you draft or review contracts. Then you and your client may have options if the business entity has failed to maintain its “current-active” status with us. The reason is that an entity’s status might indicate something about its viability and effectiveness. For example, assume that after your contract is signed, we suspend an entity at the direction of a licensing board. If you have a contract clause requiring that a contractor has to remain in good standing with its licensing board, you may be able to take action based on the “current-active” clause.