If your organization is filing a business entity document directly with a Secretary of State’s office, the document may require the appointment of a registered agent. After the document is filed and evidence is received, however, it is all too easy to forget to take the important next step: notifying the registered agent of the appointment. Failing to do so can result in negative consequences for the company.
The registered agent will need to be aware of the appointment to ensure that current contact information is on record for the entity. In most cases, the agent will require a contact name for billing, tax and legal communications purposes. Not only is this information often statutorily required, but the lack of this information could result in costly delays for the company in the event that legal documents or annual report notices are received by the registered agent. Some of the areas that could be impacted if your registered agent is not aware that it has been appointed include:
- Forwarding of legal documentation:
In the event that the entity is involved in a legal action, legal documents may be served upon the office of the registered agent. The registered agent would then forward the documentation to the most recent legal contact it has on record. If the registered agent does not have the name or current address of an individual to whom the document can be sent, it may not be received in a timely manner. In turn, a delay may adversely affect the entity in the underlying legal proceedings (for example, failing to respond by a specific deadline could lead to a default judgment).
- Annual report notifications:
Most states will forward annual report filings and/or filing notices directly to the registered agent and, again, the registered agent would send the notice in a timely manner directly to the designated entity contact. Maintaining accurate and up to date information is vital for the registered agent to successfully deliver these notices. When an entity does not file its annual report by the due date established by the state, costly penalties, lack of good standing status and potentially even revocation could occur.
Additionally, some states will allow a company to change its registered agent by indicating the new agent on the annual report. In those cases, it is very important to review and check this information carefully. It is not uncommon for a registered agent to be accidentally changed when the incorrect agent is listed on the annual report. If a change of agent was intentional, it is essential that both the new and prior agent be notified. (Most registered agents will provide the notice to the prior agent on your behalf.)
The registered agent needs to know who to bill for annual registered agent services. For the entity, it is far better to receive an annual invoice than to receive one for multiple years once the registered agent learns of the appointment. Or, worse yet, the registered agent could resign for non-payment which could lead to involuntary dissolution in states that require a registered agent.
By making your registered agent aware of a new entity appointment and providing current contact information, you will be assured of expeditiously receiving legal process and legal notices. You’ll also be better able to maintain your entity’s good standing status by ensuring that the right person in the company receives tax notices so that franchise taxes and/or annual reports are paid/filed on a timely basis.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.