You will need to designate an agent if you are forming a limited liability company or corporation within the state of Texas.
A registered agent is an individual or business entity that receives state documents and forwards them to you. Why is this necessary? Who should you designate to be your registered agent in Texas?
This guide will provide all you need to know about Texas 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 Texas Registered agent?
We get many questions from entrepreneurs in Texas 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 Texas doesn’t have a recommended list for registered agent services, we reviewed the best options and created a list.
Who can be a Texas registered agent?
According to the Secretary of state, Texas’ registered agents can be either adult residents or business entities registered and authorized in Texas. Although an entity cannot serve as its own registered agent in Texas, Texas allows individuals, such as employees and owners, to serve as agents if they are residents of the state. Texas registered agents must have a physical address in all cases. This is necessary for any delivery that may be required.
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 a 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 do Texas residents get served?
Serving summonses is the most important aspect of a registered agent’s role.
Texas law requires that a plaintiff send a demand letter to attempt to resolve the dispute outside of court before a summons can be processed. The plaintiff can file a petition and submit it to the Clerk in the county where the defendant’s registered offices are located if there is no agreement. The filing fee for the plaintiff can vary depending on where it is located. It could be between $30 and $75.
If all of these steps have been taken correctly, then the state will serve a summons on the registered agent for the defendant.
How to designate a Texas registered agent
This question will depend on the type of business that you are starting. However, if you are forming a corporation or LLC, you will need to name your registered agent.
You will need to name your first registered agent in either case when filling out the documents for your company’s formation. This will be done on the Certificate for Formation for a Limited Liability Company form 205. When completing the Certificate for Formation of a For-Profit Corporation, you will be asked to name your registered agent. These forms can be completed online or submitted by mail.
It is a good idea to have your new registered agents complete the Acceptance and Consent to Serve As Registered Agent document. Although it is not required to file the document with Texas Secretary of State it is recommended that you do so for your records in the event of any disputes regarding the appointment.
How do I change my Texas registered agent?
It is easy to modify your registered agent.
It is the easiest and most cost-effective way to change your registered agent within Texas. You can either fill it here in a PDF, and mail it to the Texas Secretary-of-State or submit it online.
Only $15.00 is required to make a change using the Change in Registered Agent or Registered Office document. The Texas Secretary of State usually grants the change to effect the day after you file the document. This makes it easy and cost-effective.
What happens when a Texas registered agent decides to resign?
Sometimes, a registered agent might have to quit their position .
A Statement of Resignation by Registered Agent (form 402) is required for registered agents in Texas who wish to resign. You can complete the document here in a PDF, and mail, fax, or hand deliver it to the Texas Secretary Of State. The form does not require a filing fee.
Why should you hire a professional Texas agent service?
A professional registered agent can be a great option. They will act as both your agent and you can also designate a lawyer or accountant.
We believe the greatest benefit is the 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 coverage in Texas, but will also be available in Texas. A lawyer or accountant would not be able help you expand in a new state if there was an existing physical office.
Most professional registered agents in Texas 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 Texas?
To form a limited liability company in Texas, 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 Texas. 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 Texas 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 Texas Secretary Of State if you have further questions.
James E. Rudder Building
Austin, Texas 78701
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.