KeepUP™ Blog

2/20/20 7:13 AM

Notices Being Sent For Delaware Unclaimed Property Voluntary Disclosure Agreement Program

by Clive Cohen

delawareDelaware continues to focus on unclaimed property compliance, with its’ Voluntary Disclosure Agreement (VDA) program at the forefront of this push.  Since the latter part of 2018, Delaware’s Secretary of State has been consistently mailing VDA invitations and continues this practice on an on-going basis. 

Based on correspondence that MarketSphere received from the office of Delaware’s Secretary of State, the latest round of VDA invitations will be mailed on February 20, 2020 to a number of Delaware incorporated companies.   

The correspondence states: 

On February 20, 2020, the Delaware Secretary of State’s Office will be mailing over 100 letters to various companies (individually referred to as “Holder”) that have been identified as likely being out of compliance with Delaware law, 12 Del. C. ch. 11, as it relates to reporting dormant, abandoned, or unclaimed property.  Pursuant to our state laws, Delaware cannot initiate new abandoned or unclaimed property examinations (audits) unless a company has first been notified in writing by the Secretary of State that it may enter into the SOS VDA Program.  The letter serves as such a notice to the Holder and strongly encourages participation in the SOS VDA Program, as an audit notice will be issued by the Delaware Department of Finance 60 days after the date of the mailing

As the correspondence notes, recipient companies must respond to these notices within 60 days or they will be referred to the Delaware Department of Finance, which would then have the option to commence an unclaimed property audit. In general, notifications from Delaware are addressed to senior corporate executives.  With respect to the VDA invitation, they often do not reach the person or group responsible for unclaimed property compliance in time to meet the 60-day deadline and prevent an audit. Our recommendation for companies incorporated in Delaware, or companies with significant operations in Delaware, is for the person responsible for unclaimed property compliance to make immediate inquiries to determine if any unclaimed property letter has been received from either the Delaware Secretary of State or the Delaware Department of Finance.

Any corporation that receives a notice letter from Delaware may want to consider contacting an unclaimed property advisor who has the experience to assist holders understanding what options could be available and determine the course of action that may need to be taken. 

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Topics: Delaware, Compliance, Audit, Voluntary Disclosure Agreements