If you have a business registered in Delaware, you might have heard about the need for a registered agent. What does that mean for your business? Whether you’re new to limited liability companies (LLCs) and corporations or managing multiple entities, a Delaware registered agent is an important part of staying compliant and protecting your business.

Below, we explain what a registered agent does, how to choose one, what their responsibilities are, and how they affect your operations.

What’s in this article?

• What is a registered agent, and what do they do?
  
• How is a Delaware registered agent different?
  
• How to choose the right Delaware registered agent for a business
  
• How to designate or change a registered agent in Delaware
  
• What are the legal responsibilities of a Delaware registered agent?
  
• What happens if a Delaware registered agent fails to fulfil their duties?
  

What is a registered agent, and what do they do?

A registered agent is a business’s designated point of contact for receiving legal documents and official correspondence. They must be available during normal business hours to accept deliveries and must maintain a physical address in the state where the business is registered. The address cannot be a P.O. box.

Registered agents collect mail including service of process (e.g. lawsuits, legal notices) and state communications (e.g. compliance forms, tax notifications) and pass these documents on to the business promptly. Missing a legal notice or important filing can lead to fines, penalties, or dissolution of the business.

How is a Delaware registered agent different?

Delaware is a go-to state for many businesses (especially large corporations) because of its favourable tax structure and well-developed corporate legal framework. Many businesses are incorporated in Delaware, including nearly 68% of Fortune 500 companies. Even if they don’t have a physical presence there, these businesses must have a registered agent with an in-state address.

As a result, many Delaware registered agents serve large numbers of out-of-state businesses, often larger entities or businesses with more complex structures. Agents often need to take on more specialised roles to properly serve these businesses. They should also be highly familiar with Delaware’s specific corporate laws and regulations to ensure out-of-state businesses maintain compliance with state rules.

How to choose the right Delaware registered agent for a business

When choosing a Delaware registered agent, focus on finding the right fit for your business. Check reviews, ask around, and see what other businesses – especially those in your industry – think of the available options. You want an agent with a solid reputation for reliability and service, particularly if your business has more at stake.

Here’s what to consider:

• Experience and expertise: Look for an agent who’s highly familiar with Delaware’s corporate laws, especially if your business has a larger or more complex business structure.

• Reliability: Seek an agent with a track record of reliably maintaining availability during business hours and meeting important deadlines related to the documents they receive.

• Service options: Some agents do more than just accepting and forwarding documents. If you need more comprehensive support, find an agent who can also help with compliance filings or other legal matters.

• Online tools: Many registered agents now offer online platforms where you can access your documents immediately. Look for an agent with this capability if you’re operating outside of Delaware and need quick access to your filings.

• Cost: Compare rates and ensure you’re not paying for unnecessary extras. Some agents bundle additional services that might or might not be relevant to your business.

How to designate or change a registered agent in Delaware

Designating or changing a registered agent in Delaware is fairly simple. Here’s how to do so and how to process any changes:

Designating a registered agent

When you first incorporate your business in Delaware, list your registered agent’s name and physical address in the paperwork you file with the state (i.e. articles of incorporation).

Changing your registered agent

If you decide to switch to a new registered agent later, you’ll file a certificate of change with the Delaware Division of Corporations. This form will list your new agent’s information. You can file it by post, fax, or in person, and you must pay the associated $50 USD fee when you file.

Afterward, save a copy of the filing or the confirmation from the state so you have a record of who your new agent is and proof your change was filed. Then, update your business records and notify all affected parties, such as your old registered agent, attorney, and accountant.

What are the legal responsibilities of a Delaware registered agent?

A registered agent’s job is to ensure your business never misses an important legal or state communication that could lead to fines or legal trouble. Here’s what they do:

• Maintain a physical address: The registered agent must have a real, physical address in Delaware. This is especially important if your business doesn’t have a physical location in Delaware.

• Receive documents: The registered agent receives all legal documents, including lawsuits and subpoenas. They also receive all compliance notices, such as annual reports and tax filings. The agent must be available during normal business hours to accept these documents.

• Forward documents: The agent is responsible for promptly forwarding important documents to the right person or department. This ensures the business can act on any legal matters as required and meet upcoming compliance deadlines.

• Keep records: Many agents also keep a record of what they receive and forward. It’s helpful for businesses to have a paper trail, especially if there’s ever a dispute about receiving a notice.

What happens if a Delaware registered agent fails to fulfil their duties?

If a Delaware registered agent doesn’t fulfil their duties, this can create some serious problems for a business, both legally and financially. Here’s what can happen:

• Legal consequences: If a registered agent fails to receive or forward a legal notice promptly, the business might miss a deadline for responding. This could lead to default judgments in court or other legal consequences.

• Fines and penalties: If the agent doesn’t promptly receive or forward state notices, the business might miss filing deadlines for annual reports or franchise taxes. This could lead to fines, late fees for non-compliance, or revocation of the business’s good standing. The business might experience operational issues and difficulties opening new bank accounts, securing loans, or signing contracts.

• Administrative dissolution: If the agent fails to fulfil their role, the state could administratively dissolve the business, meaning the business would no longer exist. The business would then have to go through a reinstatement process and would face similar issues as with a loss of good standing until the business is reinstated.

• Loss of privacy: If the registered agent isn’t available when legal documents need to be served, the courts might deliver them directly to the business or its owners. This could compromise their privacy.

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