Request By:
Honorable Bremer Ehrler
Secretary of State
P.O. Box 718
Frankfort, Kentucky 40602-0718
Opinion
Opinion By: FREDERIC J. COWAN, ATTORNEY GENERAL; Anne E. Keating, Assistant Attorney General
In your recent letter you requested a formal legal opinion from the Attorney General on the following question:
Is the payment of the filing fee a condition precedent to the filing of a document by the Secretary of State under KRS 271B.1-220 (for-profit corporations), KRS 272.040 (cooperatives) , KRS 273.368 (not-for-profit corporations), KRS 274.015 (professional service corporations), KRS 365.015 (assumed names) and KRS 14.090 (miscellaneous fees)?
May the Secretary of State void the filing and return a document after it has been received, stamped filed and the check for payment of the mandatory statutory fee has been dishonored?
The Secretary of State is charged with maintaining custody of all public records deposited in his office pursuant to KRS 14.050. The Secretary of State is also required by statute to collect fees for filing documents as detailed in the statute set forth in the question above. In each of those statutes mandatory language is used to require the Secretary of State to collect the fees enumerated for filing the various types of documents.
KRS 271B.1-220 Subsection (1) states:
The secretary of state shall collect the following fees when documents described in this subsection are delivered to him for filing . . . .
KRS 272.040 states, regarding cooperative companies::
There shall be paid to the secretary of state a fee for $ 2.00 ($ 2) for filing the declaration.
KRS 273.368 on filing and recording fees states in Subsection (1):
In respect of the following documents, the fees to be collected by the secretary of state for filing and issuing, when required by this chapter, shall be . . . .
KRS 274.015 on professional service corporations states in Subsection (1):
. . . Such articles of incorporation shall meet the requirements of KRS Chapter 271B.
KRS 365.015 Subsection (6) states, regarding filings on trade practices:
. . . the secretary of state shall receive a fee of $ 20.00 for filing each certificate and amendment.
Finally, KRS 14.090 states:
(1) The secretary of state shall charge and collect for the state the following fees for issuing commission with seal . . . for issuing remission or respite . . . for affixing seal . . . and for the certificate and affixing the seal thereto . . . for each warrant of arrest.
The Office of the Secretary of State, you stated, examines each document prior to filing to insure that it meets the applicable legal requirements including the submission of the appropriate fee. No document is filed without the filing fee being tendered at the time of filing. However, in several instances the check for the filing fee is dishonored and returned to the Secretary of State. Presently the Secretary of State has set forth requirements on filing documents in 30 KAR 1:020 entitled statements, reports and documents; filing requirements.
Section 1. (1) As used in this regulation, "good standing" means that all annual reports which are lawfully required to be received from a corporation, whether foreign or domestic, have been received and filed in the Department of State, that all other lawfully required statutory documentation has been received and filed, and that all lawful fees therefor have been paid.
(2) A corporation must be in good standing upon the records of the Department of State before that department can file current statements or other documents received from that corporation. (1 Ky.R. 325; eff. 2-5-75.)
This office has previously addressed a similar question. See attached letter to Clinton H. Newman II. In 1986 the Secretary of State's Office asked whether the Secretary of State might cancel the filing of any document which has been paid for with an dishonored check. Also, if the filings may be cancelled, what notification should be sent to the office of the county clerk. And, finally, what other recourse the Secretary of State might have in regard to dishonored checks. In reply, the Attorney General's Office stated that the Secretary of State could cancel the filing of any document which had been paid for with an dishonored check. Secondly, that the Secretary of State would have authority to notify a county clerk that a filing had been cancelled. Finally, the only other recourse the Secretary of State would have in regard to dishonored checks would pertain to the "Certificate of Good Standing" described in 30 KAR 1:010. According to 30 KAR 1:010 Section 1, the Secretary of State's Office could withhold a Certificate of Good Standing unless all lawful fees had been paid by the corporation. Moreover, the Secretary of State could prohibit the filing of any other statements or documents by a corporation so long as that condition exists. See 30 KAR 1:020 Section 1.
On this occasion, the Office of the Secretary of State has asked us to review
Manly v. Manly, Ky. 669 S.W.2d 537 (1984) which held that the payment of a filing fee for an appeal is a condition precedent to the filing of a notice of appeal and until the filing fee has been paid the notice is not properly filed.
In Manly v. Manly the question on review for the Supreme Court was whether the payment of the fee required by Civil Rule 76.42(2)(a)(i) was a prerequisite to filing a notice of appeal. Effective July 1, 1981, Civil Rule 73.02(1)(b) had been amended to read " . . . the filing fee required . . . shall be paid to the clerk of the circuit court at the time that the notice of appeal or cross appeal is filed and the notice shall not be docketed or noted as filed until such payment is made." The movant contended that the filing of the notice of appeal was mandatory and jurisdictional but that the payment of the filing fee was only procedural and therefore that the failure to pay the fee at the time of filing the notice should not deprive the appellate court of jurisdiction of the appeal. The court held that the payment of the filing fee for appeals was no longer simply a procedural step in perfecting an appeal. The payment of the filing fee is a condition precedent to the filing of a notice of appeal and until the filing fee has been paid the notice of appeal cannot be filed. This holding was given prospective effect only. While the language in the statutes affecting the Secretary of State is not as clear as the language in the Civil Rule, each statute states that the fees shall be tendered for filing. Therefore it is the position of this office that,
Manly v. Manly, supra, applies in this set of circumstances, and the payment of the filing fee is a condition precedent for filing documents with the Secretary of State. Moreover, the Secretary of State may void the filing and return a document after it has been received, stamped filed, and the check for payment of that fee has been dishonored.
The Secretary of State may wish to consider amending 30 KAR 1:020 on filing requirements to add a third paragraph which would make this principle clear and put all affected parties on notice well before putting this principle into effect.