If you will be organizing or operating a business in New Jersey (other than a sole proprietorship or general partnership), you need to know about designating a registered agent with the New Jersey Secretary of State.
Why You Need a Registered Agent in New Jersey
New Jersey requires a registered agent for every corporation, limited liability company (LLC), and limited partnership. A registered agent is also required for a limited liability partnership (LLP) if it does not have an office in New Jersey. This applies to every such entity that is either organized in New Jersey (a domestic entity); or organized in another state, territory, or country; and conducts business in New Jersey (a foreign entity).
A registered agent (or RA) is designated by a business as the place for the business to receive official legal documents, such as lawsuit papers and subpoenas. The RA's business office is called the registered office.
What a Registered Agent Does
The duties of an RA are to:
- Maintain a street address in New Jersey (not just a Post Office box, although a PO box may be used in addition to a street address);
- Be available during regular business hours to receive service of process for the business;
- Receive other official papers on behalf of the business that are mailed or delivered, such as notices of license renewals; and
- Inform the business owner of any papers received, and forward them to the owner.
RAs sometimes offer additional services, such as preparing and filing registration documents, sending reminders when annual reports or license renewals are due, and keeping documents.
Who Can Be a New Jersey RA
The New Jersey laws regarding a registered agent for various types of business entities are inconsistent and, at times, unclear:
- Corporations. For a corporation, a registered agent can be "a natural person of the age of 18 years or more" or a "corporation authorized to transact business" in New Jersey.
- Limited Partnerships. The RA for a limited partnership must be "an individual resident of," or "corporation authorized to do business in," New Jersey.
- LLCs. The RA for an LLC must be "an individual who is a resident of," or "other person with authority to transact business in," New Jersey.
- LLPs. For a limited liability partnership that does not have an office in New Jersey, the RA must be "an individual who is a resident of," or "other person authorized to do business in," New Jersey.
The laws relating to corporations and limited partnerships state that a corporation can serve as RA, but do not specifically allow an LLC to do so. The laws relating to LLCs and LLPs appear to allow a corporation or an LLC to serve as RA, since both a corporation and LLC are typically considered to be a legal "person."
Choosing a Registered Agent
The two common practices are to designate either:
- An individual person who is an owner or employee of the business entity (an "in-house" RA); or
- An outside RA, which may be an individual person but is usually a corporation that is in the business of serving as a registered agent for multiple business entities.
Whether you choose an "in-house" RA, or hire an outside RA, it is important to designate one that can be relied upon to notify you promptly when important legal papers are received.
"In-House" Registered Agents
Your company's registered agent can be you, a co-owner, an employee, or any other adult, provided that person is a New Jersey resident. The advantages are that you save the cost of an outside agent (typically $50 to $500 per year, depending upon the agent selected) and you will immediately know of any lawsuits or other important matters. Potential disadvantages include:
- Someone at least 18 years of age must be at the RA's registered office street address during regular business hours.
- If your company moves, you will need to notify the New Jersey Department of State of the RA's address change.
- You risk the embarrassment of being served with legal papers in front of clients and employees.
- Companies will frequently obtain RA addresses from the Department of State and mail solicitations, so you will receive more junk mail.
Outside Registered Agents
It will be necessary to hire an outside RA if your business does not maintain a regular business office in New Jersey that can be used as the registered address.
The advantages to hiring an outside RA include:
- The RA's office will comply with New Jersey laws regarding having a street address and an office that is properly staffed.
- If your company moves, you will not need to notify the Department of State of a change in registered agent address.
- Your clients and employees will not be present when any legal papers are served.
- Your home or business address will not be on record with the Department of State as your RA's address.
Designating a Registered Agent
A business entity will designate a registered agent and a registered address in its initial registration documents, and in annual reports, filed with the Department of State. The Department of State must also be notified of any change in the RA or the registered address. Any change by a corporation must be approved by a resolution of the board of directors.