California Registered Agent
If you’re starting your business in California as an LLC or Corporation you’ll need to list a California registered agent (also referred as an agent for service of process) to complete the legal formation process. Every California LLC and Corporation is required to designate a registered agent under California Corporations Code section 1505.
But what is a California registered agent, why do you need one, and what happens if you don’t comply? You might also wonder how you decide who to choose. There’s a lot to learn and consider. Here’s a short guide that answers all those questions to help you make the best choice of who to appoint as your California registered agent.
- What Is a California Registered Agent?
- Who can be a Registered Agent in California
- Can You Be Your Own Registered Agent in California?
- Why Hire a Registered Agent Service?
- Why Do You Need a California Registered Agent?
- What Happens if You Don’t Maintain a Registered Agent?
- California Registered Agent FAQs
A California registered agent is a person or professional company you designate as your business’s point of contact to receive official government and tax documents on behalf of your company.
Registered agents are also responsible for accepting service of process. Service of process is a term for the official legal documents that are required to be provided notifying you that a lawsuit has been filed if your business is sued.
To be eligible to serve as a registered agent in California for an LLC or Corporation, a person or business entity must fit the criteria under California Corporations Code section 1505.
Legal Requirements to Serve as a California Registered Agent:
- Be at least 18 years of age
- Have a physical street address in California
- Always available to accept service of process at their listed address during normal business hours (8 AM – 5 PM)
Most states, including California don’t allow a business to serve as its own registered agent. However, since your business is a California corporation or LLC, you are legally a separate entity and can choose to appoint yourself, another owner or an employee as your California agent for service of process. As long as the person or organization fits the California requirements, they can serve as your business’ registered agent.
While you or another individual can serve as your LLC or Corporations California registered agent, you may want to fully consider the requirements and ensure that you’ll always be able to fulfill them.
Items to Consider when serving as your own Registered Agent in California
- You need to always be available during business hours
While the requirements to be a California registered agent are pretty straight forward it’s important to emphasize that you must always be available to accept service of process notices during business hours at the address listed. If the person listed goes out of the office to meet with a client or even takes a vacation, they’ll still be obligated to their registered agent duties.
- Registered Agent Information is Publicly Listed
The registered agent information listed on your formation documents will be publicly available to lookup. So if you do list yourself or a family member remember that their information will now be available for anyone to see.
- You could be served a lawsuit in front of customers
One of the most embarrassing things that could happen if you serve as your own registered agent is the potential of being served a lawsuit in front of customers. If you list yourself or another owner with your business address as your registered agent and you are sued, the service of process documents will happen at your business address. This could be very detrimental to your reputation with customers.
- You could miss an important notice
Since one of the core responsibilities of a California registered agent is receiving updates, notifications and reminders from the Secretary of State office, you need to ensure that you take notice of these messages. If you were to receive a notice that your annual report was due and failed to respond it would be your responsibility and you could lose your good standing with the state. It can be costly to get your good standing reinstated.
With these four items in mind, you may want to consider using a commercial registered agent service.
The need to ensure a year-round, fully available agent is one reason companies choose a professional service company. You might be able to serve as the registered agent. But you stand to cause more stress for yourself by taking on this additional position.
If you decide to hire a registered agent service, you can rest assured your business will remain compliant. A professional registered agent understands the laws and regulations and the urgency in the communications.
Pros of Using a Commercial Registered Agent Service in California:
- Added Privacy: When using a registered agent service, they will list their information wherever possible to ensure the highest level of privacy possible. This can ensure that your private address and contact information is not listed publicly.
- Discretion if you are Sued: In the event your business faces a lawsuit, a commercial registered agent service will ensure that you are notified promptly with discretion. You can avoid an embarrassing situation of being served a lawsuit in front of customers or employees.
- Always Up to Date: Using a commercial registered agent service in California can ensure that your business is always up to date. Not only will they forward any updates or notifications to you, most will send you proactive reminders about different important filings before the Secretary of State even sends a notice out.
- No Need to Update if your business moves: One of the most beneficial things about using a registered agent service for a new business is that if your business grows and needs to move locations, you won’t need to spend extra money on filing an update of your registered agent information with the Secretary of State’s office.
Cons of Using a Commercial Registered Agent Service
- Additional Cost: The only true downside of using a commercial registered agent service is the additional cost that comes with using their service, as compared to serving as your own registered agent. While this is true, most registered agent services have fees that are $150 per year or less. This cost is much less than the costs and fees you could face if you were unable to fulfill your registered agent obligations. You can think of the cost as similar to a form of insurance; better to pay a reasonable flat fee than take the risk of much higher costs if there was an issue that occurred by serving as your own registered agent.
Unlike informal businesses such as sole proprietors and general partnerships, LLCs and corporations are legally separate entities from their owners. Consequently, government agencies need to ensure that there’s a responsible party to receive vital information. It also means that a business remains accountable if it does get sued.
A registered agent is the state’s designated contact for important business notices and notifications of business’ renewal fees. Additionally, the law to have a registered agent prevents a business from claiming that they weren’t aware of a fee to keep their LLC or corporation up to date.
While maintaining updated contact information is standard policy, make sure to check specific state regulations beforehand. Ultimately, having a registered agent is a safety net for the LLC or corporation, government regulatory entities, and other stakeholders.
When you think about it, the state law requiring a business to designate a person or company who is always available makes sense. It’s a safety net for you that ensures you will remain in compliance with state and federal regulations.
Having a registered agent also means you won’t miss an opportunity to argue your case in the event of a lawsuit. And maintaining a registered agent is one way to preserve your privacy.
Your business could lose its good standing with the California Secretary of State if you fail to maintain a registered agent. Maintenance means that you ensure their contact information is accurate and always updated.
If your registered agent’s information isn’t accurate, not only could your business lose its good standing, but the Secretary of State could administratively dissolve your business. This means that it would no longer have its legal recognition from California.
With your LLC or corporation dissolved, so is your limited liability protection. Without the limited liability protection, you and your business partners could end up personally liable for any outstanding debts or court settlements.
Do I really need a Registered Agent in California?
Yes, all LLCs and Corporations formed in California are required to designate a registered agent under California Corporations Code section 1505.
Is a California Registered Agent the same as an Owner?
No, a registered agent is not the same as the owner of an LLC or Corporation. However, if the owner wishes and they fit the California registered agent requirements they can appoint themselves as their business’ registered agent.