A registered agent, sometimes called a statutory agent or agent for service of process, is a person or company designated to receive legal documents and official correspondence on behalf of your business.
In Texas, every corporation, limited liability company (LLC), and other formal business entities must have a registered agent. If you're running an LLC, in particular, no need to worry because there are a lot of options when it comes to hiring a competitive registered agent in Texas specializing in this business structure.
Why Your Texas Business Needs a Registered Agent
But why do you need a registered agent when setting up a business? Here are compelling reasons you should have one:
Legal Compliance
Firstly, Texas law requires businesses to maintain a registered agent. Failing to do so can result in penalties or even the loss of your company's good standing.
Receiving Important Documents
Secondly, your registered agent accepts service of process, tax notices, and other official correspondence. That ensures you don't miss crucial deadlines or legal notices.
Privacy Protection
Using a professional registered agent service keeps your personal address off public records, too. It offers a layer of privacy for business owners.
Flexibility
A registered agent must be available during normal business hours as well. So, if you travel frequently or work irregular hours, a professional service ensures someone is always there to receive important documents.
Choosing Your Texas Registered Agent
Now, how do you choose your registered agent? You have several options, including:
Yourself
Yes, you can act as your own registered agent if you're a Texas resident and available during business hours.
It's free and gives you direct control. However, your address becomes a public record, and you must be available during business hours.
Another Individual
A friend, family member, or employee can serve as your registered agent, too.
It can be cost-effective if they're willing to do it for free. But they must be reliable and available during business hours.
Professional Registered Agent Service
Many companies offer this service for a fee if you or your friend, family member, or an employee in your business isn't available.
A professional registered agent service ensures compliance, offers privacy, and provides reliable document handling. Just be prepared for the annual fees. Nevertheless, the amount of money you'll pay is often reasonable for the peace of mind they provide.
Your Business Attorney
Some lawyers offer registered agent services to their clients as well.
The good thing about this is that your attorney is already familiar with your business. However, this route can be more expensive than the other options available.
Responsibilities of a Texas Registered Agent
Have you already chosen a Texas registered agent? If yes, here are what they can do for you:
Accepting service of process
A registered agent ensures that your business receives timely notification of legal actions, preventing potential default judgments. It covers summons, complaints, subpoenas, and other court-related papers.
Receiving official mail
Tax notices, annual report reminders, and other government correspondence are covered here. Timely receipt of these documents helps maintain your business's good standing and prevents penalties.
Forwarding documents
The registered agent also quickly sends all received documents to the designated person or department within your company.
Maintaining office hours
The registered agent must have a physical address in Texas, too. It ensures they'll be available during normal business hours to receive documents.
Keeping your information current
It will also be the registered agent's responsibility to notify the Texas Secretary of State of any changes to the registered agent's information.
Changing Your Registered Agent
Life happens, and you might need to change your registered agent. Maybe you're switching from self-representation to a professional service, or your current agent is moving out of state. Here's how to make the switch:
File a Statement of Change of Registered Agent with the Texas Secretary of State.
Pay the required filing fee (check the current fee on the Secretary of State's website).
Ensure your new agent has consented to serve in this role.
Note that ensuring that your new agent has actually consented to serve your business is very important. There are liabilities and penalties for a false statement during filing, as found in sections 4.007 and 4.008 of the Business Organizations Code. (2)
Special Considerations for Foreign Entities
If your business is formed outside of Texas but operating within the state, you're considered a foreign entity. You'll need to register as one with the Texas Secretary of State and designate a registered agent with a physical address in Texas.
Cost of Registered Agent Services
Prices for professional registered agent services in Texas typically range from USD$50 to USD$300 per year. Compare services to find the best balance of features and cost for your business needs. (3)
Common Questions About Texas Registered Agents
Check out common questions about Texas registered agents and their corresponding answers below.
Q: Can I use a P.O. box for my registered agent address?
A: No, Texas requires a physical street address where documents can be hand-delivered.
Q: How quickly must a registered agent forward received documents?
A: While there's no specific timeframe in Texas law, it should be done promptly to avoid missing important deadlines.
Q: Can I change my registered agent online?
A: Yes, Texas offers online filing for changing your registered agent.
Q: What happens if my registered agent resigns?
A: You'll need to appoint a new agent quickly to maintain compliance. The resigning agent must notify you and file a statement with the Texas Secretary of State.
Wrapping Up
While choosing a registered agent might seem like a small detail in the grand scheme of running your business, it's a decision that can have significant impacts on your company's legal compliance and operational smooth sailing. Take the time to consider your options carefully and choose the solution that best fits your business's unique needs and circumstances.
References:
1. "Business Formation Statistics by State", Source: https://www.census.gov/library/visualizations/interactive/bfs-by-state.html
2. "Registered Agents FAQs", Source: https://www.sos.state.tx.us/corp/registeredagentfaqs.shtml
3. "What Is A Registered Agent For An LLC & Do You Need One?", Source: https://www.forbes.com/advisor/business/what-is-registered-agent/
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