The Delaware Senate has passed legislation and the Governor has signed into law a new corporate filing called a Certificate of Validation. The Certificate of Validation will become effective April 1, 2014 and the cost for filing is $2,500.
The new law allows corporations to file a Certificate of Validation stating there was miscommunication(s) and or error(s) that occurred previously. In other words, if proper approval was not given or subsequent changes were not properly recorded/filed with the Delaware Division of Corporations (the “Division”), a Certificate of Validation can now be filed correcting the miscommunication(s) and or error(s).
Note: If a corporation reduces their shares of stock and/or par, files its annual report and pays a large amount of taxes, then subsequently files a Certificate of Validation to correct the record, no overpayment will be refunded. However, if the Certificate of Validation shows a prior increase in authorized shares, additional franchise taxes may be due.
