CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Should I Name Myself as Registered Agent?

By: Isabel Dunphy, COGENCY GLOBAL INC. on Thu, Sep 01, 2016

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The laws in most states require that all business entities other than an individual proprietorship provide a name and physical address (no P.O. boxes) of a registered agent to receive important mail sent by the state such as annual reports or statements, tax documents, as well as any notices of litigation (also known as Service of Process or SOP).

There is a cost associated with naming a professional registered agent, so should you try to save some money and act as your own agent? Consider the following questions:

Are you always available during regular business hours?

Even though it’s possible for you, your corporate officers or an employee to act as the registered agent for your business, the designated person will have to be available during normal business hours to receive paperwork at the address provided to the state in your formation or qualification filing. What happens if the person you named is out of the office, out sick or on vacation when important, time-sensitive documents arrive? If you fail to respond to a summons and complaint in a timely manner, your company could be subject to a default judgment.  

It’s no secret that delegating to others is not only helpful, it’s crucial to your success. You can contribute to the success of your business by delegating the receipt of important mail to a reliable commercial registered agent that will ensure that your paperwork is promptly received and immediately directed to the appropriate person for action.

Do you want to be served with legal papers in front of your clients and employees?

It probably isn’t a good idea to be served with legal paperwork at your place of business. Aside from the obvious embarrassment, knowing that the company is being sued might alarm your employees and impact office morale (and possibly a few business deals and friendships).  A commercial registered agent will have a system, software and protocols in place to immediately receive and forward any time sensitive legal or tax notice to the correct designated contact at your company (e.g. your General Counsel or CFO).

Are you up to date with all of the statutes and regulations regarding Service of Process (SOP)?

Commercial registered agents are governed by numerous statutes, many of which are patterned after the Model Registered Agent’s Act (MoRAA), a standard set of provisions that help define the role and responsibilities of these service agencies. By using a commercial registered agent, you will be tapping into their expertise and knowledge of these MoRAA provisions. Knowing where a registered agent is located within a specific jurisdiction may be helpful in your decision making process and could be important if you operate in a highly litigious industry.

Did you answer ‘NO’ to any of these questions?

If you did, then by now you have probably realized the importance of designating an experienced professional third party as your registered agent. Avoid the pitfalls of appointing yourself or your corporate officers as registered agents. Designate a commercial registered agent to ensure important communications and legal matters are promptly put in the right hands.

 

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