A Colorado registered agent is not only a good idea, it’s a necessity for most businesses—especially LLCs, corporations, and sole proprietorships.
Colorado registered agents are an integral component of the formation process, and they help businesses meet the compliance filing deadlines established by the Colorado Secretary of State.
But what is a registered agent, how do you find the best Colorado registered agent service, and do you actually need one?
What Is a Registered Agent in Colorado?
The term registered agent means an individual or business entity who is present at your business address and available during regular business hours to accept documents, legal mail, and service of process, as well as official correspondence from government agencies (like the Colorado Secretary of State or the IRS) on behalf of your Colorado LLC, corporation, or sole proprietorship.
Of course, if your Colorado registered agent receives this mail but doesn’t transfer it to you, it won’t do your business much good. This is why another part of a registered agent’s services includes mail forwarding, so that you have your documents and you’re able to meet important compliance filing deadlines with the Colorado Secretary of State (like for your periodic report).
People sometimes refer to a registered agent as a statutory agent or resident agent, so if you come across either of these terms, just know that they all refer to the same services.
In all 50 states, if your company is registered as a business entity, it’s legally required to have a registered agent, statutory agent, or resident agent. Furthermore, if you own a company that conducts business in multiple states, you must have a registered agent in each state in which your company conducts normal business operations. So, your options are to designate someone at these locations as your registered agent or to hire a registered agent service.
What Is the Purpose of a Registered Agent in Colorado?
You may wonder whether you could just set up a PO box for your business or limited liability company and then check it every so often for mail or a service of process to avoid hiring a Colorado registered agent service. The short answer is no, this isn’t an option.
The reason you can’t list a PO box for your company’s registered agent address is that the Secretary of State stipulates that all business entities must have a physical address in Colorado. What’s more, there are many other services that Colorado registered agents provide beyond supplying your company with an address and receiving service of process on your behalf.
Compliance
Another key duty that each Colorado registered agent is responsible for is making sure that your company is aware of important compliance filing deadlines (like for your periodic report). How do they make sure that you know about these deadlines? By sending you compliance notifications.
Essentially, you can think of your Colorado registered agent as a mediator or middleman between your Colorado business and various government and legal agencies (like the IRS, Secretary of State, and legal firms). One of your registered agent’s most crucial jobs is ensuring that you’re aware of compliance filing deadlines due to the litany of financial and legal issues that missing a filing can cause. By choosing a Colorado registered agent, you’ll learn about problems that your business faces as they arise, so that you can deal with them promptly.
Management of Important Documents
Many business owners who only have a PO box or don’t have a street address for their business are at a disadvantage because of the law’s specification of a physical address. The address listed on your formation documents as your company’s registered agent address is listed on the public record. If that’s your home, it’s not ideal.
But this address is also where all your official documents and service of process will be sent. And you do need those. Many registered agent services (especially the good ones) provide online document management systems. These systems allow you to look at and sort your mail with an online account, which is quick and convenient compared to receiving the mail through basic mail forwarding and then sorting through it by hand.
Who Can Be a Registered Agent in Colorado?
Registered agents must meet a handful of standard requirements. Here are some of the registered agent requirement criteria that your Colorado registered agent or registered agent service must fulfill:
- Physical address. Colorado requires that your registered agent address or principal office address must be a Colorado physical address, which means that PO boxes can’t be business addresses.
- 18+ years old. Your Colorado registered agent must be at least 18 years of age.
- Who you can designate. So long as they meet all the other requirements for Colorado registered agents, you can designate anyone as your registered agent. You could designate a family member, friend, employee, or even a lawyer or trusted advisor. But remember, whomever you choose to designate must be totally reliable and present at your business address during normal business hours.
- State laws. Some states have laws specifically about registered agents. To ensure that you’re following the regulations set by the Colorado Secretary of State for your registered agent in Colorado, you should brush up on state registered agent regulations.
What Happens If My Business Operates Without a Registered Agent?
According to Colorado state law, any registered business entity must have a registered agent in Colorado. This law applies to business entities in all 50 states. So no matter where you establish your business or how many states it expands to, if it’s listed as a business entity, you’ll need a registered agent or a registered agent service in each state in which your business operates.
If no one is posted at your business address to receive service of process and a process server attempts to deliver a service of process to your company, then the process server will likely attempt to deliver it to the Colorado Secretary of State. In this instance, the Secretary of State could move forward with the legal proceedings against your business, resulting in a default judgment against it—all of which can be conducted without your knowledge.
It’s important to know that if you don’t have a Colorado registered agent or you don’t abide by the laws regarding business entities in Colorado (like meeting compliance deadlines), your business could lose its good-standing status. The loss of your business’s good-standing status can have dramatic legal and financial repercussions. Your business may be prohibited from expanding to other states, it may be disqualified from business loans, and it may be completely barred from conducting business in Colorado.
The scariest part of losing your company’s good-standing status is the fact that it could result in the automatic dissolution of your Colorado LLC. A dissolved LLC forfeits its right to use its chosen business name. During the interim period where your LLC is dissolved, other businesses could snatch up your business name and use it for their own business. By the time you settle your legal troubles, you may find that you’ve lost your business name and you may NEVER get it back.
Conducting business with an LLC that has been dissolved is pretty risky. Business owners without the protection of an LLC are financially and legally vulnerable. The business owner’s name and information will be listed on the public record, rather than a registered agent’s name. And the limited liability protection that LLC owners enjoy is nullified, which means that their personal and financial assets are vulnerable.
The consequences of failing to name a Colorado registered agent or hiring a Colorado registered agent service aren’t limited to LLCs. Any business entity that doesn’t maintain a registered agent in Colorado faces many of these consequences as well.
Can I Be My Own Registered Agent in Colorado?
No state expressly forbids you from being your own registered agent. But before you decide to take on the duties of a registered agent in Colorado, you should know about the pros and cons of doing so in lieu of hiring a registered agent service.
Cons of Being Your Own Registered Agent
Liability
The major drawback of being your own agent in Colorado is the devastating consequences of potentially missing legal documents (like the hopefully rare but dreaded service of process) or official mail. If you miss a service of process intended for your company, a default judgment could be made against you. Because you won’t be able to defend your business in court on account of not knowing about the suit, you’ll have no choice but to live with any ruling made against your company, which obviously isn’t ideal.
Lack of Privacy
Another shortcoming of being your own agent in Colorado is that you’ll have to list your private address or home address on formation documents if your business doesn’t have a street address. When you choose a registered agent service, you list their information on the public record rather than your own, but you don’t have this option if you choose to be your own agent. Not only is this a potential privacy and security breach, cybercriminals and hackers can use it, and you could be vulnerable to identity theft.
Time
One of the biggest catches associated with being your own agent is the insane amount of time it requires. Many people aren’t aware that being a registered agent in Colorado is such a time-consuming job. You’ve got to be physically present at your company’s address during business hours to accept each piece of mail or legal document that your company receives. The thing that many people forget is that most businesses also operate during these hours, which makes it pretty impossible to perform registered agent duties AND run your business. Unless you’ve developed some new technology that the rest of us don’t know about, you can’t be in two places at once.
Pros of Being Your Own Registered Agent
The only good thing about being your own Colorado registered agent is that you won’t be required to pay annual fees to a registered agent service. But most business owners choose to hire registered agent services because they’re inexpensive and they save a ton of work. When you consider the risks, the fees for a quality Colorado registered agent service are well worth it.
Should I Use a Registered Agent Service?
There are many reasons to choose a registered agent service:
- They issue compliance notifications that will keep you informed about important compliance filing deadlines.
- The chance of default judgments and the loss of your company’s good-standing status are drastically reduced.
- You’ll be better able to manage your company because you won’t be performing registered agent tasks.
- Companies that operate in multiple states can easily comply with government regulations by using one registered agent service for all their needs.
- A business that operates outside of normal business hours won’t have to magic up extra hours in the day to do this too. Even business owners need to sleep..
- If your business doesn’t have a street address or only has a PO box, hiring a registered agent service ensures that your information remains off the public record.
- Surprisingly, businesses are sent a lot 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 sift through and dispose of it yourself. Hiring a registered agent saves you the trouble.
- Some professional registered agents provide premium services, like specialty insurance for your Colorado business and covering state fees.
- You may also have access to business services, meaning you can sign up for online legal services, formation services, and registered agent services all from the same company. You can even get registered agent service free for a year with some companies when you bundle services.
The only person that can decide whether hiring a Colorado registered agent service is the right choice for your business is you. However, I highly recommend that every new business in Colorado hire a registered agent service.
What Is the Best Registered Agent Service?
There are many factors to consider when choosing a registered agent service. Here are some of the factors you should look at when determining the best Colorado registered agent service for your business:
Service Features
If a registered agent company doesn’t offer the services your business needs, there’s no reason for you to hire them. Some companies issue convenient compliance alerts, and others just provide compliance calendars. Some companies only offer basic mail forwarding, while others supply online document management systems that provide you with a convenient way to view and handle your business documents.
Value
One solid metric you can use to evaluate the quality of a registered agent service is the number of services it provides with the fee it charges. But I’ve found that you should avoid “budget agents.” These unscrupulous agents advertise prices as low as $39–$59 per year to attract new customers then charge ridiculous additional fees for basic services like compliance alerts or online document management systems. Avoid these budget agents at all costs!
Easy Sign-Up
There are some registered agents whose sign-up processes take weeks or even months to complete, and the amount of paperwork they require is insane. The best registered agent services have simple, efficient, and automated sign-up processes.
User-Friendly Interface
It’s important that your registered agent’s system is easy to use because it’s something that you’ll probably use frequently. Some companies have outdated systems and confusing interface navigation, teeming with technical issues. Instead of choosing a company with a confusing and frustrating system, you should choose a company with a simple and user-friendly system.
Customer Service
Even if you have an industry-leading registered agent with a great service catalog, simple user interface, and an automated sign-up process, you’ll inevitably encounter a technical issue or have a question. And since a registered agent service can mean the difference between your company’s success and expansion or going out of business, it’s vital that it has excellent customer service.
Using all these factors, as well as my four-stage investigative process, I determined that Northwest Registered Agent is the best registered agent service in Colorado. If you’re eager to learn more about registered agent services or how to choose the best registered agent service, read my guide to the best registered agent services.
Conclusion
Every new business owner faces a multitude of new skills to learn, such as various business management techniques, legal and business terms, and laws and regulations. At the same time, they have to remember filing deadlines and periodic reports. But registered agents take away some of the hassle and headache of owning a business.
If you haven’t yet chosen a structure for your business and you’d like to know about LLC formation, click here for my guide on how to start an LLC. If you’d like a bit of guidance through the formation process, check out the best LLC formation services.
Colorado Registered Agent FAQs
What’s the Difference Between a Commercial and a Noncommercial Registered Agent?
The difference between commercial and noncommercial registered agents is a simple one. A commercial registered agent has registered as a commercial agent with the Secretary of State. Some states require all professional registered agents to register as commercial agents. The Model Registered Agents Act, an attempt by the American Bar Association to create uniform registered agent regulations for the nation, first described the distinction between commercial and noncommercial agents..
Noncommercial registered agents haven’t registered as commercial agents. These include both everyday citizens who have been designated as agents and professional agent companies that haven’t registered as commercial agents (if the state doesn’t require it). This means that if your great uncle Larry is your registered agent, he’s likely a noncommercial registered agent. If you hire one of the most popular registered agent services in the state, then you’ve likely hired a commercial registered agent.
How Do I Change the Registered Agent for My LLC?
No matter why you want to change your current registered agent, the good news is that it’s a simple process. All you have to do is file a Statement of Change Changing Registered Agent Information form (yes, that’s actually what it’s called). The registered agent information form can be filed online either by itself or in conjunction with your periodic report. No matter how or when you choose to file your registered agent information form, you’ll be charged a filing fee.
How Much Does a Registered Agent Cost?
The answer to this question depends on a few factors, like which services you choose and which provider you pick. Generally, registered agents can cost somewhere between $39–$299 per state, per year. If you want to learn more about the pricing of registered agents, read my guide on the best registered agent services.
