Registered Agent 101
There's a good chance you have seen on television someone getting tricked into admitting their identity only to be served with legal papers. These scenes, although often exaggerated, are illustrations of service of process on an individual. When a business or other legal entity is served legal documents they are delivered to the company's registered agent of public record, eliminating the need for these antics.
Defining a Registered Agent
A registered agent, also known as a resident agent, special agent, and statutory agent is a legal entity or individual appointed under state law to accept service of process and other legal documents on behalf of a business. When an individual is being served there is a distinct person to address but some companies have tens of thousands of employees. If a company based in Germany were to be served at one of their warehouses in the United States there would be great difficulty and confusion in both understanding and forwarding the legal documents to their legal team even though they are part of the same company. In the interests of judicial fairness a business entity is required under state law to appoint a single representative to accept these documents in each jurisdiction they are located. When a legal document is served on a business the registered agent accepts the document and then must forward it to the proper individuals. When first appointing a registered agent the procedure and means of forwarding documents between the registered agent and their client company will be agreed upon to avoid future delay or confusion.
Requiring a Registered Agent
It's the law for a business entity to have a registered agent. Therefore determining whether or not you need a registered agent is almost always going to end in the affirmative. If you own a business or work for a business, other than sole proprietorships and basic partnerships which don't require registration with the Secretary of State, there is a statutory legal requirement to appoint a registered agent.
Here is a simple checklist to help determine if a registered agent is required:
- Filed formation documents with the Secretary of State to create a business
- Registered your business to transact in another state
- The business is a Limited Liability Company (“LLC”), Corporation (both profit and non profit), General Partnership (“GP”), Limited Partnership (“LP”), or a variance thereof
If you are curious about your company's current registered agent, this information is publicly available and can be found on the website of the Secretary of State.
Duties of a Registered Agent
The registered agent must have a physical location in the state the business is registered. A P.O. Box will not suffice. This means if a business is located in multiple states they must appoint a registered agent in each of these states. Think of this requirement as a jurisdictional issue. An Arizona state police officer can not arrest someone in Nevada and a Nevada state police officer can not arrest someone in Arizona. This concept is the same for service of process for legal proceedings in state A only being delivered to a recipient in state A. The legal documents must be delivered within the state borders of the state the proceedings are taking place. The agent is responsible for accepting government notices, annual compliance notices and service of process in the event of legal proceedings against the business. In order to ensure successful delivery of these documents the agent must be available during standard business hours each day. The agent then has a duty to forward these documents to the business they are accepting delivery on behalf of.
Appointing a Registered Agent
The registered agent and their address is filed on record with the Office of the Secretary of State in every state a business is formed or registered and is made publicly available. A business will appoint a registered agent when filing formation documents with a state and when registering to transact business in a new state. The Secretary of State also allows for filing documents to change or update registered agent information at any time as long as the business remains active. It is important to appoint an agent the business has confidence in to forward any documents received on their behalf. Meeting deadlines and responding to inquiries is vital to protecting your business. Many businesses registered in multiple states will choose a professional registered agent service to act as their agent in order to ensure successful delivery and to streamline operations. These professionals understand the importance of these documents and have systems in place to deliver the documents to the necessary recipient at their client's business. Remember for your own protection, having a registered agent is the law, and understanding this law, like many others, is important when doing business.