You will need to designate an agent if you are forming a limited liability company or corporation in California.
A registered agent is an individual or business entity who receives state legal documents and forwards them to you. Why is this necessary? Who should you designate to be your registered agent in California?
This guide will provide all you need to know about California registered agents.
Registered Agent - WikipediaIn United States business law, a registered agent (also known as a resident agent, statutory agent, or agent for service of process) is a business or individual designated to receive service of process (SOP) when a business entity is a party in a legal action such as a lawsuit or summons. The registered agent's address may also be where the state sends the paperwork for the periodic renewal of the business entity's charter (if required). The registered agent for a business entity may be an officer or employee of the company, or a third party, such as the organization's lawyer or a service company. Failure to properly maintain a registered agent can affect a company negatively.
What is a California Registered agent?
We get many questions from entrepreneurs in California about why a registered agent is necessary to form an LLC/corporation. Although it may seem like a redundant role for a registered agent, this is actually a crucial role.
If your company is sued, the registered agent will provide a reliable means for the state of California to reach you. A lawsuit could be filed against you without your knowledge if you don’t have a registered representative.
Although California doesn’t have a recommended list for registered agent services, we reviewed the best options and compiled a list.
Who can be a California registered agent?
California Secretary of State stipulates that to be an LLC or corporation’s registered agent, you must either be a resident of the state with a physical address (P.O. Boxes are not acceptable. California law prohibits you from being your own registered agent.
Apart from the legal requirements, it is important to discuss who should act as your registered agent. You can declare yourself to be your registered agent. This has pros and cons.
You can save money by not having to pay anyone to be your agent. However, your home address will likely become public record. This is not ideal. You will also need to be present during normal operating hours (9-5, M-F).
Entrepreneurs often want a friend or family member to act as their registered agent. However, if they don’t have any experience in this role, they may not be able to know what to expect. Although this option is possible, it can be costly.
We prefer to hire a registered agent service. This provides convenience, affordability, and peace of mind unmatched by any other options.
How to appoint a registered agent in California
This question will depend on the type of business that you are starting. However, if you form a corporation or LLC, you will need to name your registered agent.
Depending on whether your LLC is a corporation or an LLC, you will need to name your registered agent in either field #3 of the Articles of Incorporation or the Articles of Organization forms (used for corporations), respectively. The document must be completed in both cases by the registered agent.
How do you change a registered agent in California?
It is easy to modify your registered agent.
You can submit a Statement of Information to the California Secretary of state in order to change your California registered agent. The File Online page allows you to fill out and submit the form online. Select either the “LLC Statement of Information or the “Corporation Statement of Information tabs.
You can also submit your Statement of Information via mail. You can either complete the Statement for LLCs (form LQ-12), or the Statement for Corporations (form SI-551) depending upon the type of entity.
California’s fee to change your registered agents is $20.00 or $25.00 depending on whether the company is a corporation, LLC or a partnership. This makes it easy and affordable to change your registered agents.
What happens when a California registered agent decides to resign?
Sometimes, a registered agent might have to quit their position.
To proceed with resignation, the current registered agent of the corporation or LLC must complete the Resignation of Agent to Serve Process document (also known as form RA100). This document requires five pieces of information. They must include the entity’s name and filing number. The name of the resigning agency. A statement of resignation must be included. The form is free to complete.
Why should you hire a professional California registered agent service?
A professional registered agent can be a great option. They will act as both your agent and can also serve as an accountant or lawyer.
We believe the greatest benefit is privacy protection, which allows you to keep your address private. A registered agent service is almost always cheaper than having an accountant or attorney serve as your agent.
We also like the fact that these companies are specialized in providing high-quality registered agent services. They are well-informed and know what to do.
All over the country
Another benefit to hiring a registered agent is that they operate in all 50 states. This means that you don’t have to hire another registered agent if your business expands into another state. The same registered agent can provide you with the coverage that you require in the new state while also providing the same service in California. A lawyer or accountant would not be able to help you expand in a new state unless they had another office there.
A majority of California’s professional registered agents offer a compliance calendar. This service is an added benefit that allows your registered agent to help you keep track of the due dates for ongoing LLC maintenance requirements such as annual reports.
Other attractive attributes of top registered agent service providers include access to their vast customer support networks. Many of them offer a year of registered agent services with every business formation package. This can save you a lot of money. A number of registered agent services offer volume discounts for customers who require service in multiple states or prepay for multiple years.
What is the penalty for not designating a registered agent in California?
To form a limited liability company in California, you must have a registered agent. However, if your registered agent service is lapsed, there could be serious consequences.
Failure to register a registered agent can result in your business losing its good standing before the state of California. The state has the right to dissolve your LLC at any time.
The difficulty of getting served when your business is sued would also be a problem. A court could decide to proceed with the lawsuit against you if it cannot reach your registered agent. This could happen if you fail or neglect to name a registered agent. It can also happen if your agent isn’t available during business hours to receive the document delivery.
You can see that designating a registered agent to represent your California company is not as simple as simply writing your name.
We believe there are some serious drawbacks to all options. However, we recommend that you hire a professional registered agent service as they have the least disadvantages. You don’t have to worry about losing good standing, having your LLC/corporation dissolved, or having a suit filed against you.
You can reach the California Secretary Of State if you have further questions.
California Secretary of State
Business Entities Section
1500 11th Street
Sacramento, CA 95814
Business808, a renowned consulting organization that aids startups in scaling and growing, is led by Andy Brooks as Editor-in-Chief.
Andy has over 12 years of consulting experience and is a pro at creating and managing profitable businesses. He has experience working with several LLCs and Registered Agent services and has a degree in business management. He has assisted clients in achieving their objectives.
In addition to writing for Business808, Andy is a well-known author and speaker, and an active contributor to several online business publications, imparting his knowledge on how to grow an LLC.