What Happens if Your Registered Agent Resigns?

As a business owner, you're probably aware that your company must have a registered agent. A registered agent is a person or other business entity that acts on behalf of the business.

The registered agent accepts the service of legal papers, important correspondence from other businesses, and documents from the secretary of state and other government officials. The materials received can involve critical information about taxes owed or other information that affects the business. If and when your registered agent resigns, you'll need to take action right away.

When the registered agent resigns

If the registered agent resigns, your corporation must get a new agent. Usually, the corporation can remedy this situation fairly quickly.

In some cases, when your registered agent resigns, the agent or the corporation will already have picked a successor registered agent to take over when the resignation becomes effective.

In some states, the resignation doesn't become effective immediately but may take a few weeks or months to take effect. The successor agent can take over sooner if he or she has already been appointed and has filed the requisite papers in the corporation's state of registration.

Consequences of not having a successor registered agent

If the business has not designated a successor registered agent, it will need to pick one quickly. In some states, such as New York, the state designates the secretary of state as the registered agent for the company. However, companies registered in New York can also have a separate registered agent.

Picking a successor registered agent is important because not having one can affect the status of the business. In most states, if a successor agent has not officially taken over the duties of the registered agent within a certain amount of time, often within 30 days, the business can:

• Lose its designation as a company in good standing in the state
• Lose its ability to do business in the state
• Be prevented from entering into contracts in the state
• Lose access to litigate in state courts
• Be subject to monetary sanctions or fines
• Lose some or all of its licenses
• Be allowed to exist administratively only, meaning it isn't allowed to operate fully
• In some states, lose its name, which another business could take
• Be dissolved by the state

Changing the registered agent

As the above list shows, the consequences of not having a successor registered agent in place as soon as possible are too great for your business to ignore. If the business doesn't have a successor agent, it can select a reputable online service, like Legal Inc, that can serve as a registered agent. 

Many businesses have a Delaware registration. Delaware requires the agent's resignation to take effect 30 days after it was properly filed. This also means the registered agent must continue to act on behalf of the business until the 30 days have passed. To accelerate this process, as soon as a successor registered agent has filed the appropriate papers with the state, the original agent can then officially stop acting for the business. The time to appoint a successor agent differs from state to state, so check with your legal advisor if you haven't already named a successor registered agent.

Whether you can be your own registered agent

If you have trouble finding a responsible person who can fulfill the duties of registered agent, in many states you can act as the company's registered agent. This isn't necessarily a good idea, however, because it means you're effectively stating that you are always available during business hours.

If you're not always available during business hours, or if you travel frequently, you probably shouldn't act as your own registered agent. To be a registered corporate agent, you must also have a physical address within the state where the company is doing business. A post office box address is not permitted. If the company is doing business in more than one state, you can act as the registered agent only in the state in which you live. This is why businesses who are doing business in multiple states are best served by using a registered agent service that can operate nationwide. 

Changing your LLC's registered agent

LLCs also are required to have registered agents in most states. Like a registered agent of a corporation, an LLC registered agent can resign by filing a certificate of resignation in your state. Likewise, you can change your registered agent if you're not happy with the agent by filing a change of agent form in your state.

It's important to pick your successor agent carefully. You want to make sure you find someone who is responsible, available during business hours, and who will properly fulfill the duties of registered agent. Another business entity can act as a registered agent for your company, too. Just make sure the business can be a reliable agent for your company.

What happens if you have more than one business or have a business in more than one state needing registered agent?

Did you know Legalinc is a fully owned Legalzoom subsidiary that provides Registered Agent representation for Law Firms, Tax Firms, and in-house legal teams at multi-state / multi-company organizations? 

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