FDA Extends Food Facility Registration Deadline Until January 31

The Food and Drug Administration (FDA) has extended the deadline for food facilities to submit their registration until January 31, 2013.

Under the FDA Food Safety Modernization Act (FSMA), domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States are required to renew their facility registration by December 31, 2012, and every two years after that. FSMA directed that the food facility registration portal would be available starting on October 1, 2012.

However, FDA experienced a delay in implementing the biennial registration renewal for the 2012 cycle. As a result, the registration renewal portal did not become available until October 22, 2012. Food industry members requested that FDA extend the time to register in order to allow companies a full three-month window to complete the renewal requirement. In a new guidance document issued on December 12, 2012, FDA noted that it would exercise its enforcement discretion with respect to registration renewals submitted to FDA after December 31, 2012 for a period of 31 days, until January 31, 2013. 

Failure to register a facility, renew the facility registration, or update required registration information can have serious consequences. For instance, the U.S. can bring a civil or criminal action in federal court against a company that handles food without a proper facility registration. In addition, if food being imported or offered for import into the U.S. is from a foreign facility for which registration has not been submitted, the food could be held at the port of entry and may not be delivered to the importer, owner, or consignee of the food until the foreign facility is registered with FDA.

Along with the month-long extension, the FDA released an updated question-and-answer on facility registrations, and a shorter, simplified compliance guidance document for small businesses.

Mark Your Calendars! Biennial Registration of Food Facilities Under FSMA Starts Next Week

Registration of food facilities with the U.S. Food and Drug Administration (FDA) has been a requirement for almost a decade. Since the passage of the Public Health Security and Bioterrorism Preparedness Response Act on June 12, 2002, facilities engaged in manufacturing, processing, packing, or holding food for consumption in the United States have been required to register with FDA in order to provide the agency with information on the origin and distribution of food and feed products, thereby aiding in the detection and quick response to actual or potential threats to the U.S. food supply.

Starting next week, however, all food facilities required to register with FDA must begin biennial re-registration to comply with the provisions of the Food Safety Modernization Act (FSMA). Signed into law on January 4, 2011, FSMA now requires that food facilities re-register every 2 years with FDA, during the period beginning on October 1 and ending on December 31 in even numbered years. The first registration renewal cycle under FSMA starts and Monday, October 1 and will continue until Monday, December 31, 2012. Even if a food facility is already registered with FDA, the facility is still obligated to renew registrations during the October 1-December 1 timeframe.

When registering, it is important for food facility representatives to remember that additional information is now required to accompany the registrations under FSMA. Specifically, registrations must contain the e-mail address for the contact person of the facility, or for a foreign facility, the email address of the U.S. agent for the facility, and an assurance that FDA will be permitted to inspect the facility at the times and in the manner permitted by the FD&C Act. Additionally, if determined necessary by FDA, registrations are required to contain information regarding other applicable food categories, as determined appropriate by FDA, for foods manufactured, processed, packed, or held at registering facilities.

On a related note, under FSMA, the FDA is now, for the first time, explicitly granted the authority to suspend the registration of a food facility in certain circumstances involving food manufactured, processed, packed, received or held by a registered facility that has a reasonable probability of causing serious adverse health consequences or death to humans or animals. FDA did not previously have a process for suspending the registration of a food facility in such circumstances. If the FDA were to exercise this authority and suspend the registration of a food facility, that facility would be prohibited from introducing any food into the stream of commerce in the U.S., including importing or exporting food into the U.S.

Make sure to start submitting your registrations on Monday! To register, update, or renew a registration, food facilities must submit the paper Form 3537 by mail or fax or register online at www.fda.gov/furls. FDA encourages online registration as the least costly, quickest, and most efficient means for food facility registration.

Preventing "Piercing of The Veil" - Practical Tips For Food Companies - What to Do and What to Avoid (part III of III)

By guest blogger Jerry Chiang

The following list will help you preserve your liability shield and protect yourself from the liabilities of your corporation or limited liability company (“LLC”). This is not intended to be an exhaustive list but rather an illustrative list of activities that will either preserve one’s liability shield or undermine it.

Do’s:

• Properly capitalize the corporation/LLC, or in the alternative, obtain sufficient insurance to cover potential liabilities.

• Keep personal and business entity funds separate by creating a bank account for business entity funds and transactions.

• Hold oneself out as an officer or employee of the corporation/LLC.

• In transacting with third parties, make it clear that they are transacting with a corporation or LLC and not an individual.

• As a corporation, observe all formalities listed in your state’s corporation statute and the corporation’s bylaws. To learn more about Washington corporate formalities, visit the Washington Business Corporation Act

• As an LLC, observe all formalities listed in your state’s LLC statute and the LLC’s operating agreement. To learn more about Washington LLC formalities, visit the Washington Limited Liability Company Act.

Don’ts:

• Avoid paying excessive dividends or distributions.

• Avoid below-market sale of assets to a shareholder, member or a third party.

• Avoid using business entity assets for personal purposes and vice versa.

Preventing "Piercing of The Veil" - Practical Tips For Food Companies - Introduction (part I of III)

By guest blogger Jerry Chiang

In starting any business enterprise, especially in the food industry, incorporating the business as a corporation or limited liability company is as important as having a good product or solid business plan. Incorporation is essential because it shields owners from the liabilities of their business. A lawsuit against the business will not impact the personal assets of the business owners because the law recognizes the corporation or limited liability company as a distinct and separate entity.

Incorporation by itself, however, is not enough. In order for the liability shield to remain in place, or for the law to continue to recognize the corporation or limited liability company as a separate entity, the entity’s owners need to observe certain formalities. If the owners are not careful, the law may treat the entity and the owners as one and the same and disregard the corporate entity. This is commonly referred to as “piercing the corporate veil.”

Over the next few days, this blog will give you an overview of what the courts look at when they decide whether to disregard a business entity and find its owners liable. We’ll also provide a list of dos and don’ts to help you avoid losing your liability shield. 

For more in-depth discussion of the latest case developments on piercing the corporate veil, especially as it relates to LLCs, keep up with Doug Batey's blog, LLC Monitor.