If you are a business owner and need to set up an out-of-state corporate entity, you might first consider whether or not you want (or need) to be your own registered agent.
Some states require all corporations and LLCs to have one, while others do not recognize the concept at all.
Generally, it is always good for someone who owns their own limited liability company or corporation to register as their own agent, if possible.
Read on for more information about being your own agent.
What Is a Registered Agent?
Every business entity authorized to transact business in a particular state is required, by law, to have an agent for service of process in that state.
The company’s registered agent is the person designated to receive legal papers if the state decides to sue your company.
The designated registered agent must be available at the address on file with the Secretary of State (SOS) during normal business hours and accept hand-delivered legal documents on behalf of the company; however, accepting such papers via fax or email may also be accepted, depending upon your agreement with your registered agent.
Once you choose a registered agent and complete all of the necessary paperwork with the SOS where you’re creating your company, you’ll want to make sure that they can serve as an adequate representative for your company at all times.
Registered Agent Requirements
1) All registered agents must be available during normal business hours to accept service of process on behalf of the company.
2) Most states require a commercial registered agent for service of process, as opposed to a non-commercial or residential agent
3) Commercial registered agents may have physical offices in any state, but you cannot hire an out-of-state person as your registered agent unless she lives in the same state where you were formed and has a physical office there.
4) If your company operates only online and never needs to receive documents via UPS or FedEx, then the registered agent does not need to be available by phone during regular business hours
5) The name of the resident agent must appear on all legal filings submitted by your company.
Types of registered agents:
Commercial Registered Agent:
A registered agent that charges a fee for its service and has physical offices in the state where your company was formed.
This person is required to accept service of process on behalf of your business by hand-delivering legal documents.
If you choose this type, make sure he or she will be available during normal business hours (excluding holidays), and always by phone
Residential Registered Agent:
A registered agent who does not charge a fee but still has physical offices in the state where your company was formed.
This person may also be willing to serve as your resident agent and receive all legal papers on behalf of your company, but they may or may not be available during regular business hours or by phone.
Non-Commercial Registered Agent:
A registered agent who does not charge a fee and does NOT have offices in the state where your company was formed.
This person is not required to accept service of process on behalf of your business or to be available during regular business hours (excluding holidays) by phone.
What are the duties of a registered agent?
A registered agent is required to:
- Receive legal documents from the court on behalf of your company
- Keep a current address on file with the SOS as being the location where legal papers can be sent and received on behalf of your business
- Forward all received legal documents to you or another officer at a different address within five business days.
- If they do not forward the document(s) within five days, then it is considered service of process (because they did not reject or return it) and you will owe fees to the court for having failed to receive proper notice; this may also result in small claims cases against your company
Should I Become My Own Registered Agent?
If you do not have a non-resident agent or a commercial registered agent, then the answer is yes. Depending on your company’s reason for being formed, you may need to receive legal documents via UPS or FedEx.
This means that anyone who claims to be your resident agent will always be available during business hours (excluding holidays) and by phone in order for them to accept delivery legally
How can I become my own registered agent?
Contact your county clerk’s office and ask if they offer the service of becoming a resident agent yourself.
If so, they will provide you with their form and instructions on filling it out and filing it with the court.
However, some counties may require payment in excess of $100; this fee is not regulated or set by the SOS.
Requirements to be your own registered agent
- You must be at least 18 years old or older
- You must maintain a physical address in the state where your company was formed. If you move, you will need to update this information with the SOS within 30 days of moving. It is for free for companies that are non-profits or charities; otherwise, there may be fees associated with becoming your own registered agent
- Provide office hours on their website
- Promptly respond within five days to all received legal documents
- Keep an address valid at all times, even if your company is not active
- Contact the SOS by phone to become your own registered agent. The only way to do so is via mail or in person at their office. They also do not accept faxed requests because they want proof that the signer is who they say they are (i.e., picture ID)
- Provide legal advice. This is the responsibility of an attorney, not a registered agent
- Receive documents on behalf of your company. Instead, they are required to forward all received documents via UPS or FedEx to you or another officer at an address different than that where they receive them (the address must remain valid) within five business days.
Additionally, there may be additional small claims lawsuits against your company because you did not know about these proceedings until it was too late.
The Pros and Cons of Acting As Your Own Registered Agent
- Save time and money as you don’t have to hire a registered agent
- Save time and money as you don’t have to spend the $50 fee to receive documents via delivery
- Can be done by mail or in person, without having to go through third parties or brokers
- Your company is legally served with documents and you can keep track of all important dates and events
- You must maintain a physical address in the state where your company was formed. If you move, then you will need to update this information within 30 days. This is for free for companies that are not non-profit or charities; otherwise, there may be fees associated with becoming your own registered agent
- You cannot provide legal advice because that’s the responsibility of an attorney, not a registered agent
- If the county clerk accepts payment by credit card over the phone, you will have to pay up to $15 more than what they would normally charge if paid in person
When Should You Send Your Invoices?
You are required to file an invoice within 6 months of receiving any documents.
If you don’t invoice, then it is considered service of process and your company may be fined up to $300 for each document that was not invoiced before the court date.
These fines can quickly add up if you do not send invoices within the 6-month deadline.
Where To Send Your Invoices?
Send your invoices via USPS Certified Mail with the return receipt requested.
Any time after the six-month deadline passes, if they did not receive your invoice, then it’s considered service of process and there are penalties associated with that because you did not properly follow protocol.
The last thing you want is small claims lawsuits being filed against your company.
Should I Hire a Professional Registered Agent Service?
There are many registered agent services (individual or business entity) that will accept documents on your behalf for a fee.
If your company needs to become its own registered agent because you’ve moved, then you can do so by mail or in person at the state office where your company was incorporated.
Otherwise, you should probably utilize the services of a registered agent service since it’s not worth incurring fines or small claims lawsuits against your business over something as simple as sending invoices.
How much does a registered agent service cost?
Registered service for a year can cost anywhere from $100 to-300. Additional costs may apply if you need them to send your invoices via certified mail so they arrive within 5 business days.
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Visit their website or contact them at 503-379-1960 for more information.
How do I hire a registered agent service?
- Contact companies that offer this type of service and ask questions about how they operate, any fees associated with the service, etc.
- Do some research on them and look for reviews online or on third party websites like Better Business Bureau (BBB) or Yelp to see what others are saying about this
- Another option would be to hire a virtual assistant near where your physical address is located who would serve as a registered agent within that county/city for cheaper than what it might cost if pursuing the route of becoming your own registered agent.
What Happens if I Don’t Get a Registered Agent?
If you decide not to hire a registered agent service, then there are fines associated with not having one.
If someone sues your company for missing an opportunity or taking advantage of them in some way and they win the case, then it becomes your responsibility to pay the fine.
It can range anywhere from $50-300 depending on if it’s civil (small claims) or criminal (felony).
Although it may seem like a lot of work at first, making yourself your own registered agent can save you time and money in the long run.
To avoid any legal issues with small claims lawsuits or penalties associated with service of process, make sure to send invoices within six months for each delivery received.
Follow all protocols exactly how they are laid out because even a small misstep could affect your business.