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What You Should Know About Registered Agents

I serve as a Registered Agent for many Virginia limited liability companies and corporations. I'm often asked the following questions about Registered Agents. Every business owner should understand what a Registered Agent is and does. All of my answers are based on Virginia law. The answers might be different for businesses located in other states.

What is a Registered Agent? A Registered Agent is an individual or company appointed by a business entity to receive service of process (i.e., documents for starting and maintaining a lawsuit), notices, and demands for that business entity.

What does a Registered Agent do? A Registered Agent is required to forward to the business it represents all process, notices, and demands it receives. Some Registered Agents also provide additional services, such as drafting consents in lieu of an annual shareholders meeting, to help the business meet annual statutory requirements to keep the business entity alive.

Who needs a Registered Agent? Every corporation, limited liability company, non-profit corporation, limited partnership, and registered limited liability partnership must have a Registered Agent in its home state and in every state in which it is qualified to transact business. This is required by statute and cannot be avoided or changed.

Who can be a Registered Agent? For a corporation, an individual must be a Virginia resident and either an officer or director of the corporation or a Virginia-licensed lawyer. For an LLC, an individual must be a Virginia resident and either (i) a member or manager of the LLC, (ii) a member or manager of an LLC that is a member or manager of the LLC, (iii) an officer or director of a corporation that is a member or manager of the LLC, (iv) a general partner of a general or limited partnership that is a member or manager of the LLC, (v) a trustee of a trust that is a member or manager of the LLC, or (vi) a Virginia-licensed lawyer. Certain types of corporations and LLCs also can qualify to be a Registered Agent for Virginia business entities, and there are businesses who provide this service not just in Virginia, but nationwide.

How can I appoint a Registered Agent? You must appoint an initial Registered Agent in your business entity's startup documents filed with the Virginia State Corporation Commission (e.g., Articles of Incorporation or Articles of Organization). You can change your Registered Agent at any time by filing a Statement of Change of Registered Agent with the SCC, which can be done online.

Can I be the Registered Agent for my business? Yes, if you satisfy the statutory requirements of residency and position in the business.

What are the benefits of having someone else be the Registered Agent (an "outside" Registered Agent)? A sheriff or private process server will serve lawsuit papers on the outside Registered Agent. The sheriff or the process server will visit the Registered Agent's office to serve those papers. If you are your business's Registered Agent, it might be embarrassing to have your employees, clients, or customers see you being served, especially by a deputy sheriff in full uniform (with his or her car parked in your parking lot). Having an outside Registered Agent means the sheriff or process server will go to their office instead of your business.

An outside Registered Agent also might provide a level of confidentiality. For example, if you are your LLC's Registered Agent, the public record will show you as one of the owners or managers of the LLC. If you name someone else as the Registered Agent, evidence of your ownership can be kept out of the public record.

An outside Registered Agent also might remind you of important deadlines you might otherwise overlook. The outside Registered Agent typically will indicate any deadlines in its transmittal letters. The outside Registered Agent might also explain what you need to do to meet those deadlines and offer additional help (for a fee) to help.

How much does it cost for someone else to be the Registered Agent for my business? Most outside Registered Agents charge an annual flat fee. The Registered Agent fee depends on who the outside Registered Agent is. Some lawyers might charge a flat fee of $100 to $250 or more. Corporate Registered Agents might charge more. Lawyers who charge less for their annual flat fee might also charge an hourly rate for additional work performed as the outside Registered Agent. Outside Registered Agent fees are in addition to any annual registration fee you must pay to Virginia (or any other state) to keep your business entity alive.

Why are so many lawyers outside Registered Agents? A lawyer doesn't make a lot of money from simply being an outside Registered Agent. Lawyers who are outside Registered Agents are the first to know of new legal matters with which you might need help because they will be served with the papers related to those legal issues. So this a method for lawyers to identify service opportunities and market their legal services. Business lawyers also prefer to be the outside Registered Agent for the businesses they represent to help the business meet annual deadlines for keeping their business entities alive (e.g., filing annual reports, paying annual registration fees, and adopting annual resolutions or consents).

How can I change the Registered Agent for my business? You can change the Registered Agent for your business at any time. You don't need the permission of the current Registered Agent. You can simply file a Statement of Change of Registered Agent with the SCC online or by using a form obtained from the SCC.

Please contact me if you have any other questions about Registered Agents.


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