Our Delaware registration makes us liable for far more even though we have not US operations at this time

Though my business was based in in Kenya, we had registered a Delaware C corporation in the US. Our registered address was our lawyer’s address. One day, the lawyer contacted me and told me two things: I hadn’t paid the Delaware franchise tax for two years so in addition to fines, the company would be closed; and the freight forwarder we used was being investigated under the Foreign Corruption Act, our company was one of the accounts being investigated.

I was shocked. We didn’t have any income in the US and the demands from Delaware were two years old. How could I be liable? This was the first I was hearing of them. Second, it’s almost impossible to get things done in Kenya without minor bribes; I’m not sure how anyone does any business without some infringement. Could they demand my records in Kenya? If I didn’t have the US company, would any of this have happened? Our lawyers set everything up and received all correspondence – are they liable?

Foreign Corrupt Practices Act affects US registered businesses

I was doing business in Nigeria and incorporated my company in Delaware. I was then told that certain normal business practices in Nigeria are considered corruption and would put me in violation of US law.

Read more about the Foreign Corrupt Practices Act