For the cost of a filing or processing fee, typically $10 to $20 in many states, thieves may attempt to file a fraudulent change of your business address, or file changes to your business' officers, directors or registered agent.

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The Danger to You and Your Business:

Changing your business' officers or directors places the thieves in a perceived position of control over your business' operations, as far as outside parties are concerned, with corresponding authority to act on behalf of your business. For example, by making themselves or an accomplice president or secretary, a criminal may be able to initiate the fraudulent sale of your business assets; conduct transactions or make purchases in your business' name; open or access your business bank accounts; and open or access loans, lines of credit, and other credit accounts - including those that require a personal guarantee by an owner of officer of the business.

Likewise, changing your business' registered address or registered agent can place the thieves in receipt and control of important mailed notices and statements, or service of legal process, which might otherwise alert you that your business has been victimized.

A dissolved business entity is a business that has either voluntary elected to discontinue business operations, has filed articles of dissolution with the Secretary of State, or that has been administratively dissolved because it has failed to comply with its obligations under state law, such as filing required periodic or annual reports.¹

Though the specific procedures vary from state to state, each state has an established process for reinstating a previously dissolved business, and an established time frame for doing so. A dissolved business entity can typically be reinstated up to two years after it has been dissolved.²

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The Danger to Your and Your Business:

Criminals know that once a business has been voluntarily or administratively dissolved, it is unlikely that the previous business owners will continue to monitor their business registration records. This provides criminals with a window of opportunity.

Because a business' registration records and status (active, dissolved, etc.) are available as public record, thieves can identify a dissolved business and potentially reinstate it without the previous owners' knowledge by filing the required forms and paying the filing fee within the reinstatement time period. The criminals may or may not choose to change the owner or officer information in the process.

For example, in 2010 identity thieves targeted businesses in the State of Colorado. Of the 356 reported cases of business identity theft, 80% of the victims were delinquent or dissolved businesses. Many owners of previously dissolved businesses were quite shocked when they were contacted by creditors seeking to collect from them personally for recent debts of a company they had closed years before.

Although business registrations are public information, Secretaries of State are often prohibited by state law from actively sharing business registration information with other states. Because of this, thieves may identify a target business in one state, and fraudulently register that business as a foreign (out of state) business in another state.

The Danger to You and Your Business:

A business being impersonated in this manner is not notified by the new state it has just been registered in, and has no reason to suspect that anything is amiss, until it is too late - often learning of the fraud only when it is contacted by unknown creditors or by law enforcement.

If this happens to your business, thieves can utilize your company's standing or piggyback on your business' established reputation and credentials for credibility as they engage in fraudulent activities in your business' name in the other state.

Criminals engaged in business identity theft sometimes utilize or register a business name or d.b.a (doing business as) that is intentionally similar to a well established business. Through a slight variation in spelling; adding, removing, or abbreviating a word; changing the entity type, or other minor change, they intentionally cause the business name to be confusingly similar to the legitimate company's name in order to deceive creditors, financial institutions, and other businesses.

Some simple examples might be:

• Anderson Petroleum, LLC  vs.  Anderson Petroleum, Inc.
• Williams & Son  vs. Williams & Sons
• Beringer Company  vs.  Berhinger Company
• Davis Painting  vs.  Davis Painting & Fabrication

The Danger to You and Your Business:

When the similar name is used in conjunction with other real and verifiable information from the legitimate business, such as on a purchase order or in a new account application, the change is slight and easily explained; or, it may appear to simply be the result of a minor typographical error. Either way, the order or application may be accepted.

If this happens to your business, you may suddenly discover that you are receiving bills and invoices for goods and services you never ordered or received.