It sounds like a crossword puzzle clue: Name a seven-letter medieval word that can affect your 21st century business.
The term is escheat, and today it means turning over abandoned property, such as unclaimed security deposits and outstanding accounts receivable credits, to state officials. Your business may be both a holder of unclaimed property and a claimant.
For instance, say you're holding an uncashed payroll check for a former employee. If the check remains outstanding, as the holder you may have to file a form with the Treasurer of your state reporting the amount of the unclaimed property. You might also have a responsibility for attempting to contact your former employee. Then, after a time period set by state law, you'll generally be required to turn the funds over to officials or face penalties for failing to do so.
Since escheat applies to banks, insurance companies, utilities, and other businesses, you could also discover your company needs to file a claim to recover property that's rightfully yours. This could be the case if, for example, you moved your corporate office and neglected to apply for a refund of your utility deposit.
Finding out if you have a claim is free. Just search property databases for various states where your business has operated.
Not sure how escheat laws apply to your business? Let us help.
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