19 Aug Who is Your Registered Agent, and What Do They Do?
A Note on Wording: A business is commonly referred to as a “company” in the non-legal world. However, the word “company” can be confusing when talking about legal entities, because it can be interpreted to only refer to a limited liability company, or LLC. Texas permits businesses to be structured in many different ways, including corporations, partnerships, and limited liability companies, among others. To avoid confusion, this article will use the word “entity” to refer to a business, in order to cover all types of business structures.
Registered agents are an essential but little-discussed part of a business entity’s overall structure. This article discusses what a registered agent is and does for an entity. A companion article will separately discuss what can go wrong if the appointment of an entity’s registered agent is not carefully thought through.
What is a Registered Agent?
An entity’s “registered agent” is the entity’s designated point of contact to personally receive “any process, notice, or demand required or permitted by law to be served on the entity.” (See Section 5.201(b)(1) of the Texas Business Organizations Code, or “BOC”). In Texas, there are two components that are included within the blanket term “registered agent”:
- The entity’s actual “registered agent,” who must have consented in writing to serve as the registered agent, and who can be served during regular business hours; and
- The entity’s “registered office,” which must be a valid street address at which the entity’s registered agent can be personally served. The registered office does not have to be the entity’s normal business location, but it cannot be a P.O. box or any similar mailbox or telephone answering service.
Who Is Required to Have a Registered Agent?
All filing entities formed in the State of Texas, and all foreign filing entities that register to do business in Texas, are required to have a registered agent. The term “filing entity” includes all for-profit corporations, non-profit corporations, limited partnerships, limited liability companies, professional associations, cooperatives, real estate investment trusts (REITs), and professional varieties of any of the foregoing (such as professional corporations, professional limited liability companies, etc.). The initial registered agent of each filing entity must be designated on the entity’s Certificate of Formation or Application for Registration (as applicable).
Businesses that are not required to have a registered agent include general partnerships, nonprofit associations, and sole proprietorships.
Why is a Registered Agent Important?
Appointing a registered agent is not simply a check-the-box activity. Instead, the registered agent chosen by an entity is that entity’s designated point of contact for important, and potentially critical, communications. Careful thought should be given to the selection of the agent and the registered office, and how the agent would process such important communications.
The identity of an entity’s registered agent, and the address of the registered office, are public information and are readily accessible through the Texas Secretary of State’s records. It can be difficult to locate the contact information of a business, especially if it does not have a brick-and-mortar location, or if it is headquartered outside of Texas. Thus, in many situations, the registered agent’s information is the only contact information for an entity that can be easily located.
Who Can Serve as a Registered Agent?
A registered agent can be either an individual that is a Texas resident, or an entity that is authorized to do business in Texas. Note that an entity cannot serve as its own registered agent, but an owner, governing person, or officer of an entity is allowed to serve as that entity’s registered agent, so long as they are a Texas resident. The registered agent must maintain a business office at the “registered office” of the entity for whom it serves.
Can an Entity Have Multiple Registered Agents, and Can Anyone Else Receive Process?
An entity can only have one registered agent, but it is possible for the entity to be served through other individuals. The following individuals are also considered agents for service of process under the BOC, for the applicable entities:
– The President or any Vice President of a for-profit corporation;
– Any general partner of a limited partnership or general partnership;
– Any manager of a manager-managed limited liability company;
– Any member of a member-managed limited liability company;
– Any member of a committee performing the chief executive function for a non-profit corporation; and
– Any governing person for any other filing entity not listed above.
In other words, if a lawsuit is filed against a for-profit corporation, and the lawsuit is served on the President of the corporation, then it is considered to be properly served and the corporation must respond. However, government communications, citations, and other legal processes will typically be served on the registered agent, rather than on one of the other potential agents of service, because the registered agent’s information is both public and current, and attempting to serve the registered agent opens the door to substitute methods of service if the registered agent cannot be located. On the other hand, serving the President of a corporation is effective only if they actually receive the documents being served.
Do I Have to Keep My Registered Agent’s Information Updated?
Entities are required to “continuously” update the identity of their registered agent, and the location of their registered office, by filing the appropriate paperwork with the Texas Secretary of State. There is no set deadline by which a change to an entity’s registered agent information must be communicated to the Secretary of State, but if an entity’s registered agent information is outdated or incorrect, the entity may not receive timely (or effective) notice of important information, including lawsuits. It is therefore imperative that an entity update the Texas Secretary of State as soon as possible
We here at Rapp & Krock, PC are ready to answer any of your questions or to help you analyze your registered agent options.
Copyright © 2021 by Kieran Wheeler. All rights reserved.