If you’re thinking about forming or already own an LLC or corporation, no matter what state you’re in, you’re required to have a registered agent. Sometimes called a resident agent or statutory agent, business owners must name this entity on business formation documents filed with the state. These agents act as the company’s point of contact with the state and for service of process, ensuring that you receive notices of lawsuits filed against the business or other legal documents in a timely manner. So who qualifies to serve this important function for your company?
Requirements for serving as registered agent
In Texas, an entity or individual serving as a registered agent must meet the following requirements:
- Be a Texas resident or an entity authorized to do business in Texas;
- Have a physical street address (not a PO box);
- Provide the Secretary of State with written or electronic consent to serve as agent; and
- Be available during normal business hours to receive and sign for legal documents.
Many small business owners choose to act as their company’s registered agent, and that is perfectly acceptable, as long as they meet the state’s requirements. But there may be circumstances where the business benefits from having a third party serve as its registered agent.
Reasons why hiring a registered agent service makes sense
Privacy – This may be the biggest reason why companies choose to use an agent service versus keeping it in house. When a business is served with a lawsuit, it is often delivered by local law enforcement. Most owners do not want police officers showing up in front of customers, employees, or nosy neighbors, to serve them notice that their company has been sued. Using a registered agent service prevents potential harm to your company’s reputation and keeps its legal matters as private as possible. This can be particularly important to owners of home-based businesses.
Anonymity – In addition to general privacy concerns, business owners may want their business activities to remain anonymous. Whether to prevent the identity of the company’s owners from being made public or for other privacy concerns, anonymity can be accomplished by using trusts or other entities on formation documents, along with hiring a third-party registered agent not associated with the company’s owners. This way, any public records of the company will not contain any confidential owner information.
Odd business hours and availability – Since a registered agent needs to be available during regular business hours to accept service of process and official notices from the state, businesses that have irregular, intermittent, or non-traditional work hours will benefit from using an agent service. Such businesses might include restaurants, bars, real estate agents, contractors, and the like.
No physical address – If your business does not operate from a physical location, like a small, web-based business, or if you’ve used a post office box as your official business address on your corporate filings, you may not have another option but to use an agent service.
Business locations in multiple states – If you register your business to operate in more than one state, you will need to have a registered agent in each one. If you don’t have brick-and-mortar offices in those states, you will need to hire an agent service that maintains a physical location there, in order to satisfy the state’s requirements.
Your address is likely to change – When you file formation documents for your company, the state requires you to keep the registered agent’s address current. Changing the agent’s address down the road requires a formal state filing along with a fee. So if a change of address is a possibility, whether you move once or change your address frequently, you can avoid multiple state filings and associated fees by using an agent service.
Convenience and peace of mind – As a business owner, you have enough on your plate, especially if you handle multiple roles within your company. You may not be available to accept service of process. By hiring an agent service for that task – which will forward any important documents it receives, confidentially and in a timely manner – you can focus on important operational matters that keep your business running smoothly.
Weighing the options
Just because you can do something doesn’t mean you always should. If your business has a physical location and keeps normal business hours, only operates in its home state, and you aren’t concerned about privacy, then you might do just fine acting as your own registered agent. But if any of the reasons listed above strike a chord with you, hiring a registered agent might be a perfect fit.
TrustBridge Legal offers registered agent services to all companies that are required to maintain a registered agent in Texas. For more information about these services, click here or contact us today.
