CORPORATE TRANSACTIONS & COMPLIANCE BLOG

International Company Forming in Delaware? How Your Registered Agent Can Assist

By: Colleen DeVries, COGENCY GLOBAL INC. on Thu, Sep 29, 2016

how_a_registred_agent_can_help_international_companies.jpg

Your international company is doing well and you want to take it to the next level. You want to start investing or doing business in the United States. Prior to forming a company in the U.S., there are many things to consider such as which jurisdiction to choose (“In the U.S., business entities are formed at the state level rather than the national level,” GlobalDelaware.gov explains.) and what type of entity would be most favorable (e.g., corporation or limited liability company are two common choices). Also, you may have to decide whether you need to register in any other state along with other considerations based the specific activities of your company. In order to make the best decisions, it is important to engage legal and tax counsel to provide guidance on these matters.

Delaware?

Many companies choose to form a business entity in Delaware because of its “modern and flexible corporate laws, highly-respected Judiciary and legal community, a business-friendly government, and the customer-service-oriented staff of the Division of Corporations,” according to Delaware.gov.

With the right legal and tax advisors, along with a registered agent partner, you can be confident that you are considering all factors to ensure that you are properly forming your new business in Delaware. And based on the actual business you will be conducting in the U.S., you may need to register, obtain licenses and maintain compliance in other states where you’ll be doing business. While a professional registered agent cannot provide legal or tax advice, below is an overview of the role of the registered agent and services they can provide in Delaware and, for the most part, all other states in the U.S.

Do I Need a Registered Agent?

Appointing a registered agent is a legal requirement in the state of Delaware, where your business is registered. If you do not maintain a registered agent, your company’s authority to do business in that state can be revoked.

What Does the Registered Agent Do?

The registered agent provides you with the statutorily required registered office, that is, your address in Delaware, for the receipt of legal papers (known as service of process) that may be served on your company and annual report and franchise tax notices from the Delaware Secretary of State. (Note this address is not to be considered your principal business address in Delaware or the U.S.) Your registered agent will ensure that these important documents are sent without delay to the appropriate individual at the company for review and response. The registered agent also maintains the name, address and related communications contact information for your company, another statutory requirement.

Can a Professional Registered Agent Help Keep Me in Compliance with Business Entity Requirements?

A professional Registered Agent can assist you with filing the Certificate of Incorporation or Formation.  Once your Delaware company is formed, your registered agent can also assist you with the following:   

  • Registering or “Qualifying to do Business” in Additional States
    • Based on the advice of your legal or tax advisor, your registered agent can provide the forms and assist with other requirements (such as checking name availability, fees and timing) to register in other states where you will be doing business.
  • Annual Report and Franchise Tax Compliance
    • Assist with preparing and filing required annual reports and payment of franchise taxes.
    • This ensures your company’s registration remains active, or “in good standing”.
      • Why is “good standing” status important? When a company loses good standing or is revoked, it can experience a number of problems, including:
        1. Another entity can form in the state using your name.
        2. You can experience difficulties in opening bank accounts or getting financing.
        3. You will often need to pay fines and penalties to re-instate good standing status.
  • Business License
    • If, in addition to state registration, you are required to obtain a business license based on the type of business you are conducting, your registered agent can assist you with these registrations.
  • Obtain a Federal Employer Identification Number ("FEIN")
    • The registered agent can assist with obtaining your company’s FEIN that will be required when you open a bank account and submit tax returns.
  • U.S. Company Secretary Services
    • On a limited basis, a registered agent may be able to coordinate with the preparation of the basic post-formation organization documents (such as, for corporations, the Incorporator Action, Initial Organization Written Consent and By-laws, or, for a limited liability company, the Operating Agreement).
    • Note that a legal review of these post-formation documents is extremely important and highly recommended to ensure that your company’s governance documentation is (i) in compliance with Delaware’s statutes, and (ii) your specific business goals are documented, and that all annual statutory requirements are complied with.
  • Mail Forwarding Service
    • Forward select other types of correspondence to the appropriate individual at the company (i.e., bank statements).

As you can see, a registered agent can be a powerful partner who can help you form and qualify your business in Delaware and other states where you want to do business and can also help ensure your company remains in good standing in all jurisdictions. Choosing the right registered agent is an essential step toward building a successful business in the United States!

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Registered Agent