Wednesday, June 12, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, December 13, 2020
​Business Entity Registration Scam
By Tom Yamachika @ 5:00 AM :: 2657 Views :: Ethics, Small Business

Business Entity Registration Scam

by Tom Yamachika, President Tax Foundation Hawaii

Recently, our Department of Commerce & Consumer Affairs (DCCA) reminded people of a news release. The release was directed to anyone in Hawaii that owns or has control of an entity (such as a corporation, partnership, or LLC).

DCCA explained that there are some non-Hawaii-based companies that send solicitations to Hawaii-based companies. They say, “Hey! Your business registration is going to be due shortly, and renewing it is required by law. Pay us $145 and it will be done.”

The first problem is that some people think that the letter comes from a government agency. It doesn’t.

The second problem is that the renewal for most entities doesn’t cost anywhere near $145. It’s $12.50 for most entities, and even less for partnerships ($5.00) or nonprofit corporations ($2.50). This fee can be paid online at DCCA‘s website at the beginning of the quarter in which the business initially registered. 

Now, these first two might not be real problems because services like these can be done by legitimate  businesses.  Attorneys, for example, make money helping people navigate through the laws and regulations. When responding to complaints lodged in other states like Oregon, these companies’ attorneys made that claim. But that leads to the third problem with these companies.

The third problem is that these companies (at least the ones DCCA has identified in its release) are not themselves registered in Hawaii.  The law clearly says that an entity doing business in Hawaii needs to be registered with DCCA. (See HRS section 414-431 for corporations, 425-1 for partnerships, 428-1001 for LLCs.) It also needs to provide some basic information such as the name and address of somebody in Hawaii to whom legal paperwork can be delivered if someone in Hawaii wants to sue it.  Instead, DCCA observed that the companies appear to use a mail drop as their company address, which sounds like they don’t want people to find out where their physical location is.

With this third problem, the odds of these companies being legitimate service businesses drop way down.  A service business that is helping consumers follow the laws shouldn’t be flagrantly breaking those same laws themselves.

To make things worse, neither of the companies DCCA identified appears to have an active general excise tax license. Are they trying to fly under the radar or what?

Companies like these also might be trying to make money by selling any personal information you give to them. And, if you give them financial access data like a credit card number, you seriously need to watch out. 

They aren’t only a problem in Hawaii. The Better Business Bureau has noted a pattern of complaints against it, operating in multiple states under assumed names.

Remember that if it looks fraudulent or questionable, it probably is. Fraudsters and scammers tend to omit certain information to avoid being traced. Look for these red flags before submitting any personal information or payments:

· No physical return address—just a P.O. Box.

· No telephone number to contact a representative.

· A non-corporate email address (such as Gmail, Yahoo, Hotmail).

· A service fee or an upcharge for credit/debit card payments.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii