What is a Registered Agent?
A registered agent is someone, either a company or an individual, that a corporation appoints to receive service of process and other official notices such as state franchise tax notices. Service of process is how a third party gives your company notice of a pending legal matter, which allows your company to respond accordingly.
A corporation’s registered agent must be located within the relevant state. For example, if your Texas company is incorporated in Delaware, your company will need to hire a registered agent in Delaware. If your Texas company is incorporated in Texas, you or another shareholder or officer could be the Texas registered agent (assuming each resides in Texas).
The registered agent must be available during normal business hours and supply a physical address in the relevant state–no P.O. boxes or private mailboxes. Since this address is public record, some people opt to hire registered agents to maintain privacy.
The most common mistake startup companies make is failure to update the name and/or the address of the startup’s registered agent. For example, if you fail to update registered agent information with the secretary of state, your company could be sued–and lose–without your knowledge. In Texas, the secretary of state becomes the registered agent on behalf of your startup if your startup fails to maintain a registered agent, or the registered agent listed with the secretary of state cannot be found with “reasonable diligence.”
Rates for registered agents tend to range between $50 to $360 per year. Finally, here’s a link to the Delaware General Corporation Law regarding registered agents.
About the Author
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
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Please consider subscribing to The Startup Lawyer, following @startuplawyer on Twitter, or contact Ryan directly.6 Responses
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Individuals who are thinking about starting up a new business who choose to register their business themselves, as opposed to using an attorney or registered agent, should be aware that they will listed as the registered agent. As a result, the information they supply during the registration process, such as home mailing address and home phone or mobile phone number, will be public information.
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I really wonder what would be the status of a mail and packages redirecting service – they provide a "pro-forma" address, redirecting anything they receive to the actual address of their customer. Would that 'do" for the state? It's not a rhetorical question.
Great article, Ryan!
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Greg says:
Any advice on selecting a registered agent? There seems to be an almost complete lack of information on pricing and service.
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CT Corp seems to be the most "on the ball" about RA services, but they are the most expensive. Try Blumberg-Excelsior. Don't have any experience with anyone else.
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