What is a Registered Agent?
Every state in the United States requires that any formed legal entity maintain a Registered Agent in any state that they operate, including Alabama. Failure to appoint a Registered Agent may result in the administrative dissolution of a company and can be a basis for piercing the corporate veil and exposing a company’s owners to unnecessary personal liability. A company’s Registered Agent is important, so what does a Registered Agent do?
What a Registered Agent does
A Registered Agent is an individual or company appointed for the purpose of serving legal process on that company. A Registered Agent must be located at a physical location, so a post office box is not a sufficient address for a Registered Agent. The idea is that someone trying to take legal action against a company, such as filing a lawsuit, should be able to hand-deliver a copy of the lawsuit to the Registered Agent identified on the Secretary of State’s website in order to complete service on that company.
What a Registered Agent does not do
A Registered Agent is not an “agent” in the legal sense. They cannot sign contracts, write checks, hire or fire, or take any other action on behalf of a company. While someone with that kind of authority can also be a Registered Agent, the role of a Registered Agent does not imply that that person can act for the company.
Why a Registered Agent is important
Each company is required by law to maintain a Registered Agent in the states where they operate. Failure to identify and maintain a valid Registered Agent means that the company is not in good standing with that state’s laws. Also, since a company can be served by serving the Registered Agent, delivering a copy of the lawsuit to the Registered Agent means that a plaintiff in a lawsuit has done everything they need to serve that company. It won’t be a defense that the CEO wasn’t aware of the lawsuit if the Registered Agent was properly served, so it is possible that a company could have a significant judgment entered against it if the Registered Agent does not maintain contact with the rest of the company. You want to appoint someone you trust to be your company’s Registered Agent as a result.
Do I need a Registered Agent service?
You do not need a registered agent service. The law permits you to be the registered agent of your own company. However, the requirement that a Registered Agent be located at a physical location will require you to provide a physical address to be made publicly available on the Secretary of State’s website. This may be a problem if you operate your business out of your home and do not want to publicly disclose your home address.
We provide Registered Agent services for $250 per year. The first calendar year of Registered Agent service is included in any company we set up, and the cost is invoiced annually every year thereafter. While there are a number of Registered Agent services available, the biggest benefit of appointing us to be your Registered Agent is that we can immediately begin work responding to any legal summons once it has been served on us. Using a third party service can result in delays that may result in the loss of some legal rights if you do not act quickly enough.