Regardless of the structure of your business, be it California LLC, corporation, or sole proprietorship, a registered agent is an essential business service.
Not only do registered agents play an important role in the formation process, they also help your business meet the legal compliance obligations established by the California Secretary of State Business Programs Division.
But what is a registered agent, what does it do, and do you really need one?
What Is a Registered Agent in California?
A California registered agent is an individual or business entity that is physically present at your California business address and available during regular business hours to receive business mail and legal documents, as well as legal notices like service of process and correspondence from government agencies, like the California Secretary of State, on behalf of your business.
All this mail going to your California registered agent eventually needs to make its way to you. Enter the second half of the services that registered agents provide—mail forwarding—so that you have access to your mail and can keep up with compliance filing deadlines,like filing your statement of information, known as an annual report in other states.
Sometimes a California registered agent is referred to as a statutory agent or resident agent, so if you notice these terms in your research or on formation documents just know that they refer to the same service.
Any company registered as a business entity must designate and maintain a registered agent, statutory agent, or resident agent, and this is true in all 50 states. Additionally, if your company conducts business in multiple states, then you must maintain a registered agent in those states as well. That means you’ll have to either designate someone who’s present at those locations or hire a registered agent service.
What Is the Purpose of a Registered Agent in California?
You’re probably wondering if you could simply get a PO box for your company and check it with some degree of regularity and still meet the requirements of the California Secretary of State, rather than hiring a registered agent service. In short, no.
You can’t use a PO box as a registered agent address because it’s not a physical street address in the state. Besides that, receiving mail and service of process is only one aspect of the services that a registered agent service can provide.
Compliance
One of the duties of your California registered agent is ensuring that your company is aware of important compliance filing deadlines. A California registered agent service accomplishes this by issuing compliance notifications for things like your company’s yearly statement of information.
Basically, you can think of your registered agent as an intermediary between government agencies, legal agencies, and your business. Your agent will make sure that you’re aware of compliance deadlines so that you can file in time. Designating a registered agent ensures that you’re notified about problems that your company may encounter so that you can handle them quickly.
Management of Important Documents
Some California business owners may find the stipulation of a physical address and the exclusion of PO boxes frustrating. Keep in mind, though, that the address you list on your formation documents is where all your business’s official mail and correspondence from government agencies is sent. You want to keep that stuff organized.
If you designate a basic, nonprofessional registered agent, you may get these items forwarded to you on a second trip through the mail. Worst case scenario, you never see them.
Most registered agent services (or at least the quality ones) provide clients with online document management systems where they scan and upload your stuff so that you can access it anytime. This online account allows you to see your business documents and sort through your mail quickly and easily.
Who Can Be a Registered Agent in California?
The requirements for registered agents are pretty uniform. Here are a few of the requirements that your California registered agent or registered agent service has to meet:
- 18+ years. Your California registered agent must be at least 18 years of age or older.
- Physical address. The California Secretary of State stipulates that your registered agent’s address must be a physical address in California and your registered agent must be both present at this address and available during normal business hours to accept mail and service of process for your California LLC or business.
- Who you can designate. So long as they meet the other stipulations, you can name anyone as your California registered agent, like an employee, family member or friend, or even your lawyer. Your registered agent just has to be present at your registered business address during business hours. Because of this condition, many businesses choose to hire California registered agent services.
- State laws. There are laws that specifically outline the rules for registered agents in several states, laid out by the Secretary of State or other governing agencies in the state. To make sure you’re following the regulations regarding your California registered agent, you should research registered agent regulations.
What Happens If My Business Operates Without a Registered Agent?
If your California LLC, sole proprietorship, or corporation is a registered business entity, the law requires it have a registered agent. This rule is true of all business entities across the board and nationwide. Additionally, any company that conducts business operations in multiple states is required to maintain a registered agent in each state it operates in.
If you don’t list your agent’s address on your formation documents or you simply don’t designate a registered agent, you could potentially miss important correspondence.
If a process server attempts to deliver service of process to the address you’ve officially listed for your business on public record and no one is there to receive it, they may attempt to deliver it to the California Secretary of State instead. If that happens, the Secretary of State’s office may take legal action against you and a default judgment may be made against your business—all without your knowledge.
Another important thing to note is that if you don’t follow registered agent regulations or meet important compliance filing deadlines, your business could lose its good-standing status. Losing your company’s good-standing status can have drastic legal and financial consequences for businesses. Your company could be barred from doing business in the state or expanding to other states, and it could be disqualified for business loans.
One of the most devastating consequences of losing your good-standing status is the immediate dissolution of your LLC. A dissolved LLC no longer has the legal right to use its business name in the state. After your LLC is dissolved, other companies can seize the name and use it themselves. Even if you reestablish your LLC with the state, you may lose your company’s business name—FOREVER.
It’s risky for business owners to operate an LLC that’s been dissolved, as well. Any business owner who continues normal business operations while the company is dissolved is legally and financially liable for the company in the event of litigation against it.
The consequences of not following registered agent regulations aren’t limited to LLCs. Any business entity that doesn’t maintain a registered agent is faced with many of these repercussions, as well.
Can I Be My Own Registered Agent in California?
In the United States, no state prohibits you from being your own registered agent. However, you should learn about the pros and cons of providing registered agent services for your company yourself rather than hiring a professional registered agent service.
Cons of Being Your Own Registered Agent
Liability
The biggest pitfall of being your own agent rather than hiring a registered agent service for your company is that there are major legal and financial consequences if you miss a service of process. Missing a service of process is a big deal. It means someone has taken legal action against you and you don’t even know about it. If you don’t answer, the court will issue a default judgment.You’ll have no choice but to abide by the ruling.
Lack of Privacy
If you don’t hire a registered agent service and your company doesn’t have a physical address, you’ll have to list your home address on formation documents, which will then be listed on public record.
If you use a registered agent service, you’ll list your registered agent’s name. You’ll list your registered agent’s information. This keeps your personal information private and protects you from cyberattacks and identity theft.
Time
One big disadvantage of performing registered agent duties yourself is the amount of time it takes up. Owning a business and being a registered agent are both time-consuming jobs. As a registered agent in California, you’ll have to be present at your listed business address during normal business hours to receive every legal document and service of process. It’s really not likely that you can do that and manage your business at the same time, let alone do either well at all. No matter how hard you try, you aren’t able to be in two places at once!
Pros of Being Your Own Registered Agent
The only real advantage of being your own registered agent is that you won’t have to pay fees to a California registered agent service. But registered agents aren’t even that expensive, and considering the risks, it’s worth it.
Should I Use a Registered Agent Service?
There are lots of reasons to use a registered agent service:
- Compliance notifications will guarantee you always know about compliance filing deadlines.
- You won’t miss important correspondence, so the chances of lawsuits or losing your good-standing status are much lower.
- You’re free to manage your company because you won’t be burdened with the task of simultaneously performing registered agent duties.
- It’s easier for companies that operate in multiple states to hire a registered agent service so that all your documents and compliance is handled by one company. It’s also a good idea if your hours of operation fall outside of normal business hours.
- If you have a PO box or your business doesn't have a street address, hiring a registered agent service keeps your own information off the public record.
- Businesses get lots of junk mail. If you’re your own registered agent then it will all be sent to your home address and you’ll have to dispatch it yourself, as well. But hiring a registered agent in California will save you the trouble.
- If you hire a registered agent in California, you can choose to pick one that supplies premium registered agent services or business services. Some California registered agents offer premium services, like specialty insurances and payment of state fees. Others offer business formation services and have promotions like registered agent service free for your first year.
The decision to hire a California registered agent service is one that only you can make. But I recommend that all new businesses hire a registered agent in California.
What Is the Best Registered Agent Service?
There are a lot of things you should take into account when choosing a registered agent. Here are some of the factors you should consider when trying to determine which registered agent service is best for your company:
Service Features
There’s no reason to hire a registered agent in California if it doesn’t offer the services you need. Some providers offer compliance alerts, while others only provide a compliance calendar. Some offer online document management portals so that you can see and manage your legal documents using an online account, while others simply provide mail forwarding.
Value
You can assess the value that a registered agent provides by considering both the amount of services it provides and the fee it charges. With that said, you should avoid “budget agents.” These agents use the promise of low sign-up costs ($39–$59) to lure in unsuspecting customers and then charge them ridiculous additional fees for essential services (like compliance alerts or online document management). Steer clear of budget agents.
Easy Sign-Up
Some registered agents’ sign-up processes can take weeks or months to complete and require loads of paperwork. Look for registered agents with simple and automated sign-up processes.
User-Friendly Interface
You’ll use the system for your registered agent in California quite frequently, so it’s important that it’s easy to use. Some companies have antiquated layouts with complicated navigation, littered with glitches and technical problems. Avoid any company with a troublesome system in favor of companies with more user-friendly systems.
Customer Service
It doesn’t matter whether your registered agent in California has a full array of services and a user-friendly interface, you’ll still eventually have a question about its service or encounter some sort of technical difficulty. And because your registered agent could mean the difference between your company legally operating, or closing forever, excellent customer service is a MUST.
I used all these factors, as well as a four-stage investigative process, to determine that Northwest Registered Agent is the best registered agent in California. If you’d like to learn more about registered agent services and how to choose the best registered agent, read my guide to the best registered agent services.
Conclusion
New business owners have to learn tons of new information quickly, including laws and regulations, new management techniques, and legal and business terms. You’re also expected to remember your statement of information and other deadlines. But registered agents can make business ownership a bit easier by helping you with these tasks.
If you’ve yet to choose the structure for your business and are interested in learning more about the LLC formation process, check out my guide on how to start an LLC. And if you’d like a bit of guidance throughout the formation process, read my guide on the best LLC formation services.
California Registered Agent FAQs
What’s the Difference Between a Commercial and a Noncommercial Registered Agent?
The difference between a “commercial registered agent” and a “noncommercial registered agent” is simple. A commercial registered agent is a registered agent service that has registered with the Secretary of State and filed a commercial registered agent statement. In some states, all registered agent services are required to register as commercial registered agents. This distinction between commercial and noncommercial registered agents was laid out in the Model Registered Agents Act, which was an attempt by the American Bar Association to create a unified, nationwide set of rules for registered agents.
Noncommercial registered agents are people or businesses (in states where businesses aren’t required to register as commercial registered agents) who haven’t registered as commercial registered agents.
How Do I Change the Registered Agent for My LLC?
Fortunately, it’s easy to change your registered agent from your existing registered agent to a new one. Simply file a statement of information with the Secretary of State to change registered agents. Some states require you to also file a registered agent consent form with an agent’s signature. And you’ll be charged a filing fee to submit the forms.
How Much Does a Registered Agent Cost?
It depends on several factors, such as the provider and services you choose. But, in general, registered agents cost between $39–$299 (plus state fees) per state, per year. If you’d like to learn more about registered agent pricing, read my guide to the best registered agent services.
