Delaware’s “SOS” to get Companies into their VDA program
Delaware’s Secretary of State (SOS) has begun issuing a new round of letters inviting companies to enter the Voluntary Disclosure Agreement (VDA) Program to ensure compliance with Delaware’s Abandoned or Unclaimed Property Law.
Companies that receive VDA invitation letters from the SOS have 60 days from the date of the invitation to enroll. If a company ignores the letter and does not enroll within 60 days of the invitation mailing, the SOS will refer the company to the State Escheator for examination.
In most cases, a company will benefit by entering into a Delaware VDA versus undergoing an examination for the simple reason that Delaware is required by statute to assess interest on audit assessments at 0.5% per month, with an interest cap of 50% of the amount of the underlying property required to be paid. While Delaware has the option to waive up to 50% of the interest assessment, the best case scenario for most companies under audit is a 25% interest assessment on the overall audit findings.
What your company should do:
- BE ON THE LOOKOUT. Notify your team that the Delaware VDA invitations may be coming. Often the invitations are sent to corporate officers or others that may not be aware of what they are or the potential consequences of ignoring the invitation.
- REVIEW YOUR OPTIONS. If you receive an invitation, assess your options carefully. Most companies will benefit by entering into a Delaware VDA, but each company’s facts and circumstances are unique. In most cases, a company will benefit from speaking to counsel or holder advocates familiar unclaimed property and the Delaware VDA program.
- RESPOND PROMPTLY. If you’ve determined that the VDA program is right for your company, make sure to respond timely to ensure your right to participate.
We at True Partners Consulting have helped hundreds of organizations determine the right thing to do when presented with these options and stand ready to discuss all this with you at any time. Please reach out to the members of the True Partners Consulting Unclaimed Property Management Team to set up a call.