Solving a Problem That Did Not Exist: the Kan. Sec'y of State Office's Unexpected Change to Incorooration Document Titless

• Year: 2024
• Citation: Vol. 93 No. 5 Pg. 42
• Pages: 42
• Date: 01 October 2024

Solving a Problem That Did Not Exist: The Kansas Secretary of State Office's Unexpected Change to Incorooration Document Titles No. 93 J. Kan. Bar Assn 5, 42 (2024) Kansas Bar Journal October, 2024

Articles of organization

In January of 2024, the Kansas Secretary of State (KSOS) redesigned its website in an attempt to improve customer experience. Along with this change, the KSOS also changed the names of documents filed online to create Kansas entities, using names that do not appear in any relevant Kansas statute. At issue is the effect filing these forms has on the creation of a valid legal entity, and the consequences that will occur if the entity's incorporation or organization is defective.

If a court determines that an entity has not been formed, it could result in severe consequences to business owners in the form of personal liability, accidental partnerships, and chaos in terms of the validity and liability for a host of matters ranging from contracts, to permits, banking relationships, insurance, tax obligations, etc. Those at greatest risk if this change is determined to be invalid are those who cannot afford (or have chosen to operate without) the assistance of an attorney.

In our numerous attempts to obtain an explanation for this change from the KSOS, we were told that the Kansas Bankers Association and the Kansas Bar Association had approved the changes. Both organizations confirmed that was not the case. In all likelihood, the staff members at KSOS we spoke with were likely simply confused about the details, however, it seems that this has been communicated to other members of the public as well. On two other occasions we were told by KSOS staff that the office was trying to change the documents back to their original titles and that the change was a result of insufficient funds to properly code document outputs as part of the KSOS website overhaul.

While it is more likely that filing these documents will still result in the valid formation of the relevant entities, this unasked for and unexpected change creates needless risk until a favorable court ruling definitively establishes the legal effectiveness of these documents. The amount of headache and confusion caused by what amounts to changing the names on about a half dozen documents further amplifies the frustrating nature of this decision.

At this point in time, the KSOS may have backed itself into a corner. Currently, entities may still be filed in...