Secretary of State (SOS)

Know Your Business (KYB) compliance means verifying the legitimacy of a corporate entity before onboarding. A core step in KYB is reviewing SOS filings. That’s because these show registration details, beneficial owners, liens, and other important details required to properly assess the legitimacy and risk of another entity. 

This process is used as a fraud prevention measure and risk management procedure that helps assess risk factors and determine if it’s appropriate to partner with a certain entity that’s being verified during the KYB check. This helps companies stay compliant and avoid accepting third-party service providers and vendors that don’t align with their risk appetite. Non-regulated companies may review Secretary of State (SOS) filings as an added measure to detect and prevent fraud, even if they are not legally required to do so under compliance regulations.

Yes. Utah, Hawaii and Alaska don’t have a Secretary of State. Puerto Rico and other US Territories, including the 47 US states, have a Secretary of State. In Massachusetts, Virginia and Pennsylvania, the office is called Secretary of the Commonwealth.

The Secretary of State is responsible for record-keeping in most states. 

This includes documents like:

• Laws passed by the legislature
• The state constitution
• Executive orders
• Rules from state agencies

Many states also deal with maintaining records of land transactions and ownership. Additionally,  the Secretary of State also serves as the state’s chief elections officer. Their responsibilities include managing electronic filing systems and providing online access to lobbyist financial information and campaign data. 

When starting a business (no matter if it’s a sole proprietorship, partnership, corporation, etc.), the Secretary of State’s office handles the registration and authentication of business entities and trademarks. That means offices process, file and maintain business documents, allowing you to check if the name is available. Consequently, many states provide online databases for business searches, allowing you to look up information by name, registered agent, or other factors to access such documents. 

Yes. If you want to register and form an LLC, you must file articles of organization with the Secretary of State and pay the necessary fee. The SOS office also handles LLC dissolutions, judgment lien filings, and documents for nonprofit corporations or partnerships. Most states have online systems where you can submit all required documents. 

Businesses need to register in a state even if their office headquarters are in another jurisdiction. 

This rule applies to companies that meet the following criteria:

• The company conducts frequent in-person business meetings in the state.
• The company has a physical presence, such as an office, in the state.
• Any of the company’s employees work in the state.
• A major part of the company’s revenue is collected from the state.

It should include standard details like the business address, name, ownership structure information, and registered agent information. Other information comes with mandatory documentation that needs to be filed with the state, including the company’s articles of incorporation, articles of organization, certificate of limited partnership, limited partnership agreement, LLC operating agreement, annual reports, statements of information, bylaws or resolutions, among others (depending on the entity type and its state). 

Yes, many Know Your Business (KYB) solutions have custom frameworks and special templates for SOS filings. For example, iDeny’s KYB software can be used to build a unique process and SOS verification for corporate entity onboarding, depending on your use case and operating market. This involves collecting the needed information, including the Secretary of State filing that has vital details about another business (for example, in which state the business is registered, what are the company’s beneficial owners, if the company has any liens filed against it, etc.), helping you determine if they are legitimate or not and if the entity is appropriate based on your internal risk appetite. 

A Certificate of Good Standing is a confirmation and a special status that verifies an entity’s legitimacy and validity in terms of operating in a certain state. If an entity is in good standing, it means it has paid all required fees and filed the necessary reports. That’s why this document confirms that the business has met compliance requirements, including retaining documents and paying taxes on time. The Secretary of State is responsible for issuing this certificate. 

iDenfy’s KYB software collects and compiles a special SOS filing report, which includes:

• Business name and state of registration
• Beneficial owners
• Business structure (LLC, corporation, etc.)
• Filings like articles, annual reports, and lien records
• Registered agent info

Beyond SOS filings, iDenfy’s KYB solution also includes extra built-in tools, such as EIN verification, proof of address (PoA) checks, KYC checks on directors, UBOs, and related individuals, AI database cross-matching, AML screening (PEPs, sanctions, adverse media, and watchlist screening), as well as risk assessment and other tools for a custom KYB workflow. Once you register, you’ll have the option to choose your own building blocks for the KYB process or select from a predefined list of blueprints that are based on industry standards (for example, fintech).