Entity Compliance and Maintenance: Letters for Small Business Lawyers

Vol. 1, No. 10

Jean L. Batman founded Legal Venture Counsel, Inc. in 2004 to provide outside general counsel services to investors, entrepreneurs, and small businesses. Prior to forming Legal Venture Counsel, Ms. Batman was a Partner in the San Francisco offices of Duane Morris LLP, one of the country’s 100 largest law firms. As outside general counsel to a variety of companies and individuals, Ms. Batman provides business and financial legal services to privately held entities operating in a broad range of industries including real estate development, financial and professional services, manufacturing, software, retail, biotechnology/specialty pharmaceutical, and high technology.


From the book Letters for Small Business Lawyers, Chapter 5


  • In this article, find a sample letter for doing business in more than one state.


The legal requirements of operating a business can seem endless to the small-business owner. The support that legal counsel provides in keeping a company in good standing is often vital to both the company’s ultimate success and the client’s loyalty. Clients often appreciate compliance reminders and offers of assistance, and have been known to attempt to blame counsel when compliance requirements are neglected. The sample letters in Chapter 5 of this book will be useful in helping you keep clients in good standing and identify new projects.

Topics covered in Chapter 5 of the book include:

  • Additional legal requirements that arise when a client is doing business in more than one state;
  • Forms to be used in connection with an annual shareholder meeting;
  • Solicitations for corporate compliance services disguised as government-sanctioned forms;
  • Forwarding documents received by an agent for service of process;
  • Submitting various documents for filing and obtaining endorsed filed copies of the same; and
  • Providing receipts for nonprofit donations.

Also included are sample letters for annual reminders to clients that need to file annual reports in the state of Delaware, file corporate or limited liability company tax returns, update director and shareholder actions, record actions taken by members or managers, forward W-2 forms to employees, and submit employment tax returns.

Finally, there is a sample audit response letter for use with clients that have their financial statements audited. The form and content of an audit letter response should always be based on the form developed for the Auditor’s Letter Handbook, 1998 American Bar Association, or more current edition of the same.


Doing Business in More Than One State



{Company Name}


{City, State, Zip Code}


RE: Doing Business in More Than One State


Dear {Salutation}:


All states require foreign entities (i.e., ones not organized in that state) to qualify before doing business in their state. Qualification typically consists of a filing with the Secretary of State’s Office, payment of a fee, and appointment of a resident agent for service of process. Thereafter, you can expect filings and fees due annually, as well as tax obligations specific to each state in which COMPANY operates.

“Doing business” is more often defined by the exceptions than by particular acts that constitute doing business in a particular state. However, if COMPANY elects to open an office in another state, as you have indicated it may, it will be required to qualify in that state. Failure to qualify may result in financial penalties as well as the inability to bring suit in the courts of the state with respect to acts and transactions in the state during the period of the violation.

Please let me know when COMPANY begins operating in another state so I can assist you in qualifying to do business in the other jurisdiction. In the meantime, please do not hesitate to call me with any questions with regard to the above.


Very truly,

Firm Name

Lawyer Name




Letters for Small Business Lawyers


Did you find this article helpful? Do you think more information like this would help you? More information is available. This material  is excerpted from Letters for Small Business Lawyers, 2011, by Jean L. Batman, published by the American Bar Association General Practice, Solo and Small Firm Division. Copyright © 2011 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. GP/Solo members can purchase this book at a discount. Click here to purchase the book.


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