My Internet Business Due Diligence Default
People forget. Businessmen are human.
Companies are obliged to register with a responsible authority. It can all be transacted online. Access is easy.
Owner ID and address appear on the face of the register so that legal documents can be served. Account and share information are also included. Basic stuff.
Registration must be renewed annually. There in lies the problem.
Failure to renew results in a penalty. Status is down graded from Active to Default.
Inquirers seeing the word Default are put on caution. All may not be well with the company. But someone may simply
have overlooked the anniversary and forgotten to renew the registration.
The latter cause is usually the case. Typically young, rapidly expanding, companies default due to company officer forgetfulness.
Recently, while charting the path that an inquirer, conducting due diligence into a company, might reasonably take while conducting due diligence, I alighted on the Arizona State Governors Business Register. One record stood out,
Status: Default.
I decided to put my theory to the test, oversight or trouble. At least, the reputation of the company was at stake.
I flashed an email to company HQ. A polite acknowledgment ensued, thank you.
Next morning I checked, the record was amended: Status: Active. The job was done. It was oversight.
Annual renewal of company registration is a chore, easily overlooked.
Good standing is vital and must be guarded jealously. Any presumption that the company is a scam must be avoided. Reputation may be preserved by forward planning. The bottom line is vigilance. The old aid memoir is a desk diary.
Today online calendars prevail.
What ever the solution, maintenance of company registration is essential.
My internet business due diligence research occasionally uncovers anecdotes such as the one above, providing an interesting lesson. There will always be examples as people forget and businessmen are human.