You need to know about designating a registered agent with the North Carolina Secretary of State if you will be organizing a business in the state, or if your out-of-state company will be doing business there.
What is North Carolina's registered agent requirement?
A "registered agent" (or RA) is designated by a business to receive official legal documents, such as lawsuit papers, subpoenas, and other legal notices. The RA's business office is called the registered office, and must have a street address in North Carolina. In addition to the street address, a different address may be indicated for mailing purposes (including a P.O. Box, or a private mailbox or mail service).
If you have a corporation, limited liability company (LLC), limited partnership, or limited liability partnership (LLP) that is operating in North Carolina, you are required by law to have a registered agent. This applies to an entity that is either organized in North Carolina (a domestic entity) or was formed in another state and conducts business in North Carolina (a foreign entity). Although it is not required, an unincorporated nonprofit association may also appoint an RA.
If a business entity fails to designate or maintain an RA, service of process can be made on the Secretary of State. This can delay or prevent the business from receiving vital legal notices.
What are the obligations of a registered agent?
Registered agent duties are to:
- Maintain a street address in North Carolina (not only a P.O. Box, or a private mailbox or mail service);
- 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 license renewal and tax notices; and
- Notify the business owner of any papers received, and promptly forward them to the entity.
Many professional 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.
What qualifies a registered agent?
A registered agent can be an individual person who resides in North Carolina, or a registered agent company authorized to conduct business in North Carolina (typically a corporation or LLC). The RA's registered office must be staffed during regular business hours by either the individual RA, or an owner or employee of the RA.
A company may either designate an "in-house" RA, who must be an owner or employee of the company, or hire an outside RA, who may be an individual person, but is usually a company in the business of serving as a registered agent for many entities.
How do you select a registered agent?
Whether you choose an "in-house" or an outside RA, it is important to designate one that can be relied upon to notify you promptly when important legal papers are received.
Choosing an 'in-house' RA
An owner or an employee of the company may serve as the RA. This will avoid the cost of an outside agent (from about $50 to $500 per year, depending upon the agent you select) and you will immediately know if any lawsuits or other important documents are received. Potential drawbacks include:
- Someone must be at the RA's street address during regular business hours.
- If your company moves, you need to notify the Secretary of State of the RA's address change, and pay a $5 fee.
- You might suffer embarrassment if you are served with legal papers in front of clients and employees.
- Your business address will be listed as the RA with the Secretary of State. Especially if you have a home-based business, you may want a separate RA address.
- Companies frequently obtain RA addresses from the Secretary of State and mail solicitations, so you will receive more junk mail.
Choosing an outside RA
It will be necessary to hire an outside RA if your business does not have a regular office with a street address in North Carolina that is staffed during regular business hours. In any event, there are some advantages to hiring an outside RA, including:
- The RA will have a street address that is properly staffed.
- You will not need to notify the Secretary of State of an RA change and pay the $5 fee if your company moves.
- Your clients and employees will not be present when any legal papers are served.
- Your business address will not be on record with the Secretary of State as your RA's address.
How do you designate an NC registered agent?
A business entity's initial formation document or registration document filed with the Secretary of State must designate a registered agent and registered office. Any required annual reports must also include the RA's name and registered office street address (and mailing address, if different), and a statement indicating a change in the registered office or RA.
An unincorporated nonprofit organization choosing to appoint an RA files a statement of appointment with the Secretary of State (which must be signed by the RA accepting the appointment) and pays a $5 filing fee.
If the RA changes, the entity must file a statement of change form with the Secretary of State. If the registered office address changes, either the entity or the RA must file. A corporation or LLP may indicate a change of RA or registered office address on its annual report. A change of RA for a corporation must be authorized by a board of directors' resolution, or by a corporate officer authorized by the board.
In all cases, the RA must sign a consent to serve as the RA.