A registered agent is a person or entity who will receive official mail on your business’s behalf.
California Registered Agent
For any small business that needs to form an LLC or a Limited Liability Company, you will need to look for a registered agent in California. But who is a registered agent and must you get one? We’ll discuss everything you need to know about a registered agent and how it can benefit your business. Read on!
What Is a Registered Agent in California?
A California registered agent is a company or person designated to receive service of process and official notices on behalf of the limited liability company. As long as you have an agent or registered office, you can exist as a limited liability company.
The registered agent must be located in the state where the limited liability company was formed. If you are located outside of the state where the LLC was formed, then you must appoint an agent for service of process in that particular state.
There are two types of California registered agents: physical and virtual. Virtual being an authorized representative by way of email or fax whereas physical being a traditional registered agent with an actual street address.
If you use a virtual registered agent, then it is still wise (and required in certain states) to get your own physical post office box or building address. You can use this as your mailing address and also list it as your registered agent address. This way, you will still receive documents from the state even if your virtual agent rejects them due to a full inbox or junk folder.
The downside of using a virtual agent is that they may not forward items such as court summonses and official notices. There have been cases where companies have failed to respond because they were unaware of the situation or had not received notice. This can result in fines and other penalties that should have been avoided.
When Do You Need a Registered Agent?
If your business is registered by the state as a limited liability company, limited partnership, limited liability partnership, or corporation, you are required to maintain a registered agent. The purpose of the registered agent is to provide a physical location for your business where legal documents may be delivered by the state.
Each state varies with its specific rules and regulations. Some include
-Receiving service of process on behalf of the LLC at the agent’s address
-Serving of summonses and complaints on the LLC
-Acceptance of certified mail for the LLC
-Receiving official government notices.
Although this requirement is pretty standard among states, not all businesses are required to have an actual “physical” office at their registered agent’s address. Some states allow you to appoint a tax preparer or other professional to act on your LLC’s behalf.
You don’t need a registered agent in California if you’re a sole proprietor or in a general partnership. These businesses are not registered by the state hence they don’t need a registered agent to represent them. But you’ll still need to comply with tax obligations and respond to all legal requirements.
What Does a California Registered Agent Do?
A registered agent ensures that there’s a reliable way for your business to receive important official documents and to be notified about legal proceedings. The information about your registered agent remains on the public record for easier communication. If someone goes through the business entity database, they’ll see the details of the agency serving your company.
The registered agent receives service of process (SOP) like:
1) Summons in a lawsuit and other papers, such as bankruptcy filings, that are served on the LLC when it’s sued.
2) Notices if the secretary of state revokes your business’ LLC status.
3) Notices you if other businesses sue your LLC.
4) The government can contact you through your agent about tax, payroll, and other similar issues.
5) An agent will help you comply with state rules and make sure you comply with LLC law.
Can I Be My Own Registered Agent?
Yes, you can be your own California registered agent. Sometimes the owner of an LLC also serves as its registered agent. You can also appoint your partner, employee, spouse, or even your lawyer as a registered agent. In many states, your appointed registered agent must agree to do so and you must send their consent to the secretary of state.
The Secretary of State where your business is organized will tell you how to appoint yourself as your own agent. If you’re your own registered agent, your business location will serve as your registered office address.
There are drawbacks that come with being your own registered agent. For instance, if you change the physical address of your business, you’ll also need to file for a change of the physical address of your registered agent. This won’t be the case with third-party agents.
Another thing to consider is that you must be available at your business’s physical address all the time to receive important legal documents for your business. This can be problematic if you’re not present at the registered office to receive important papers on time or face the consequences.
Third-party agents are more reliable because they will give you an address for them. Any official notification or summons can be mailed directly to them instead of having to deal with it yourself. Be aware that if you intend to use an attorney or other person as your agent, they must be a resident of the state in which the LLC is organized and qualified to do business there.
You should also know that if you don’t have someone who qualifies as an LLC’s registered agent, the government can serve you with legal papers at their address. If this happens and you don’t respond in time, the court could enter a default judgment against you. As a result, you could lose the right to contest the action and be forced to pay it.
Requirements to Be a Registered Agent in California
There are many requirements to be a registered agent including:
-Being an adult (18 years or older)
-Being capable of giving consent
-Not being convicted of a felony in the last five years
-A willingness to serve at all times and on all occasions that may arise.
-Must be a resident of the state where the company is registered
-Must have a physical address in the state where they are a registered agent. This address cannot be a P.O Box address because this would not be a physical location from which you could receive mail from the court.
In addition, it is important to note that even though you can have one or more companies as your client, each company must have its own separate registered agent. An individual cannot be a registered agent for more than four different LLCs outside of their own LLC.
Also, note that each company must pay its own separate fee to the state and file its own separate registration form with the state’s business division. Therefore, it is possible for an individual to be a registered agent for four or more companies but not all of them can be located in the same state.
Should I Use Registered Agent Service?
You don’t just need the services of a registered agent because it’s a legal requirement, the services also come with many benefits to look for. Even though you might pay some fees for a registered agent service, you will be able to avoid the costly mistakes of failing to file the right paperwork with your state. In addition, a registered agent service can keep your business in compliance with state laws and make sure that nothing falls through the cracks.
Below are other benefits of getting the legal services of a registered agent.
They’re Not Expensive
One of the reasons you should not shy away from hiring a registered agent is that they don’t charge too much. Although prices vary based on the company, you can expect to pay no more than $200 per year for the service. The service is cheap compared to what you might have to pay if your business gets sued or has some other legal issue come up because of a lack of compliance.
You Can Keep Track of Business Documents Anywhere
When you hire a registered agent service, there’s no need to keep track of things like incorporation documents yourself. It can be tough to do when you’re constantly traveling. Instead, you can access all your business documents easily online because the registered agent keeps them up-to-date and can email them to you when necessary.
Keep the IRS at Bay
Tax laws change all the time, and it’s difficult for a business owner to keep up with what must be reported and how much in taxes is due on each transaction. A registered agent service can help by keeping track of such things so you don’t have to.
Keep Your Assets Safe
If you’ve taken the time to incorporate your business, you should also take steps to make sure it’s protected. A registered agent service can serve as a point of contact for banks and other financial institutions where you might need to deposit large sums of money. If anything happens to the funds while they’re under their custody, you can rest assured knowing your business is in good hands.
All Your Paperwork Is Handled For You
Running a business while also fulfilling all the various requirements of filing tax returns and other documents is hard enough. Trying to do everything on time while managing the day-to-day operations of your business is nearly impossible. A registered agent will not only take care of all your paperwork for you, but they’ll also pick out the best time slots to get everything done. As a result, you don’t have to worry about missing important deadlines or sending in forms late because it’s just too much work.
They Know The Legal Side Of Business Operations
While everyone needs to file the usual insurance, taxes, and other paperwork for their businesses, there are also several legal aspects to consider. A good registered agent will be able to help you through the complicated process of incorporating or forming an LLC. This is especially important if you’re considering franchising your business. For example, franchisors are required by law to maintain a list of all their current franchisees and agents. This is where the services of a registered agent can come in handy. They can be your go-to for ensuring you stay compliant with state and federal laws.
They Keep Your Address Private
When you own a business, it’s important for your privacy to keep your home address out of the public eye. At the very least, it’s helpful to keep some of your contact information private for those not exactly welcome to have it. These include telemarketers and other solicitors looking to sell you something. A registered agent can help shield some of your addresses from public view simply by being a middleman between you and the state.
Changing Your Registered Agent
As long as your business will be in operation, you’ll need to have a registered agent. So, if your registered agent is no longer capable of serving you, you need to make changes as soon as possible. If you go for a long time without one, the state can revoke your certificate for good standing or even dissolve your company.
Fortunately, it’s easy to change registered agents in California by filing a form with the Secretary of State. In most cases, you’ll need to provide the name and address of your new registered agent as well as a file number from a previous business filing if you have any on record.
Some states also allow electronic filing of the forms for changing your registered agent. Others require that you mail the form to the Secretary of State. If you’re not comfortable with filing your own forms, make sure to check with the state for specific requirements before submitting your form.
While some states charge money for changes like this, it’s often free. For the states that charge, the fees usually range from $25 to $50 which is pretty low.