Entity Health Check
Is Your Company in Good Standing with the Secretary of State?
An entity health check should be performed regularly to ensure your legal entities are in “good standing” with the Secretary of State and to prevent future non-compliance issues. However, some organizations ignore routine evaluations due to lack of time, resources, or knowledge – which can be costly down the road.
An entity health check is essentially a cheat code to the due diligence process for legal entity transactions. And with a legal entity review conducted by a third-party provider, like EntityKeeper, you can determine whether your business checks the box in all of the right areas of compliance.
What is an Entity Health Check?
An entity health check is the process of verifying an entity’s status with the Secretary of State. It’s important to note this must be done for the entity’s state of formation and any states of operation. Since the Secretary of State is specific to each jurisdiction, the process of verification and possible entity statuses can vary, but the end goal should always be to verify that your entities are in good standing.
Why are Entity Health Checks Important?
Entity health checks can help you identify issues in your standing with the Secretary of State. Some businesses neglect this important step and only learn that they have fallen out of good standing once they are penalized. An entity health check can help you avoid costly fines and penalties and maintain a strong business reputation so that you can continue to do business.
When Should an Entity Health Check Be Performed?
Legal entities should perform a routine entity health evaluation regularly. Although there is no specific time frame during which a health check must be completed, we generally recommend the following as optimal times:
- At the beginning or end of the calendar year
- Once a quarter
- Six months after a new entity is formed
Performing an entity health check during these time frames can help you maintain your good standing status and avoid future roadblocks in your legal entity management.
What Are the Challenges in Performing my Own Entity Health Check?
Organizations may decide to conduct their own entity health checks. However, when you choose to do the evaluation internally, the following challenges may arise:
- Uncertainty on how to use your health check results to inform your business decisions
- Difficulties connecting with the Secretary of State
- Procrastinating on completing the health check
- Wasted time and resources
- Lack of a comprehensive, actionable review
Note: If you encounter any of these challenges, you may want to partner with EntityKeeper to get back on track and ensure your health check is proactively and properly managed!
Can EntityKeeper Perform an Entity Health Check for my Business?
EntityKeeper has the resources and expertise to perform an entity health check for all your entities. Despite the complexities across jurisdictions, our team knows exactly where to go and who to contact at the Secretary of State’s office. By turning over every rock, you’ll have peace of mind knowing your entities are in good standing and, if not, the exact steps that need to be taken to mitigate any consequences.
What are the Benefits of Partnering with a Provider for Your Entity Health Check?
As we mentioned earlier, CRE firms and other organizations can opt to conduct their own entity health check. However, you should be aware of the time and effort typically spent to complete a thorough entity review. A comprehensive check requires you to connect with the Secretary of State to confirm the statuses of all of your entities. The more entities you have, the more manual and time-consuming this process can become.
When you partner with a provider, like EntityKeeper, to perform your entity health check, you can skip the manual hassle and gain peace of mind about the quality of your check. Our team of experts will help you:
- Navigate the Secretary of State for each jurisdiction and verify all your entity statuses
- Understand which entities are not in good standing, what the underlying cause is, and next steps to take
- Mitigate potential consequences, such as fines/penalties, loss of name rights, and dissolution or revocation
When it comes to working with a provider, the reward outweighs the risks. You no longer have to worry about missing your desired timeline for completing your health check or managing the process from beginning to end. That adds up to a lot of time savings for you and your team!
Ready to ensure your entity is in good standing?
Get your complimentary entity health evaluation today!
When you select EntityKeeper as your registered agent, you’ll receive a free entity health performance evaluation to assess your entity’s standing. If we find any issues or gaps in your status, we’ll help you to understand the problem and then guide you through the process of resolving it.
Contact Us to explore our Corporate Services and get more information on your entity health evaluation.
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