In most jurisdictions, a company that is forming or qualifying to do business must appoint a “registered agent” to receive service of process (SOP) on behalf of the company in that jurisdiction. Naming an agent for SOP, however, is not limited just to the formation or qualification process. Agents for SOP may be required in two other situations: (1) in cross-border loan transactions (a “process agent”), or (2) when registering with government agencies other than a Secretary of State or its equivalent (a “special agency”).
In cross-border loan transactions, lenders will often require the appointment of a U.S.-based “process agent” to receive SOP on behalf of a foreign borrower. The loan and/or note agreement governing the transaction will spell out the identity and location of the process agent. Naming a process agent gives the lender comfort that, in case of a default, service on the foreign borrower can be completed in the United States. (For more information about the role of a process agent, download our white paper.)
The second situation, a “special agency,” arises when a unit of government requires an agent for SOP as part of its own registration process. An out-of-state company registering with a Department of Insurance, Department of Transportation, Attorney General’s office, or similar government agency will often be called on to appoint an agent for SOP located in the jurisdiction. This appointment is separate and distinct from the appointment of the registered agent with the Secretary of State.
Here is a sampling of some of the agencies/industries that require a special agency appointment:
- Alarm Systems
- Alcoholic Beverage Control
- Appraisal Management
- Department of Banking
- Collection Agency
- Contractor’s Board
- Department of Insurance
- Employee Leasing
- Department of Finance/Financial Institutions
- Federal Motor Carrier Safety Administration (BOC-3 Registration)
- Department of Labor
- Mortgage Lending/NMLS
- A.C.T. Act/Federal Tobacco Regulation
- Board of Pharmacy
- Public Service Commission
- Public Utility Commission
- Securities and Exchange Commission
- Staffing – Conduit
- State Tobacco Regulation
The graphic below compares these three types of agent for service of process and includes some helpful examples of when you might need to appoint an agent in each category.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.