Remember the days when you had to file a document with the secretary of state (or equivalent office) and they provided you with a paper document that you could mail in or bring to their office in person? Those days are rapidly disappearing. State agencies are moving away from paper filings and shifting to online filings instead.
The states have varying approaches to digitalization
Although the shift towards online filings can be seen in practically every state, each state is approaching digitalization at their own pace. In some states, most business entity and UCC filings can be made either online or in paper form. In other states, some documents must be filed online (annual reports or UCC documents for example) while other documents can be filed either online or in paper form. However, a more recent trend is for states to go entirely paperless and require all business entity and UCC filings (although there may be some exceptions, such as merger filings) to be made online. This trend can be seen in states like Colorado, New Mexico, Montana, and Mississippi.
Why states are going online
States are shifting toward online and paperless filings for several reasons. It can reduce costs and increase efficiency by streamlining operations and cutting down on administrative burdens.
Payment for online filings may be made by various methods, depending on the state, including a prepaid or funded account, ACH, credit or debit card. This eliminates checks and allows a filing office to verify immediately that the credit card or an account has the funds to pay the filing fee.
There is also the benefit to the environment of reducing paper use.
There can also be advantages for filers. In some states, to encourage online filing where there is a choice of online or paper, the states offer a lower fee for online filing. Online filings may also be processed faster and can eliminate the errors that can occur when state employees manually enter data, leading to fewer rejections.
Why it’s important to know if a state permits or requires online filing
Filings will be rejected if submitted in an improper format or by an improper method. This can have serious negative consequences for anyone making a time sensitive filing. It is important to keep track of what method of submission the states are accepting for each document being filed. Unfortunately, some states give little warning before announcing that they have gone completely online and will reject paper filings.
CT Corporation is closely monitoring this fast-moving trend toward digitalization of business entity and UCC filings and is well positioned to assist our customers in filing their documents in compliance with the state agencies’ current filing requirements. You can contact us for additional information.
