What is a Registered Agent - Law Plus Plus - Durham, NC - Business Law

What is a registered agent? This is the hardest part of any LLC or corporation formation. I should also mention it isn’t that hard. Firstly, I’m going to list the relevant laws. After that, I’ll explain what they mean. Then, I’ll conclude with some pointers.

Unfortunately, the law is thick legalese. However, I wanted to include it for your reference. If you don’t want to read it, skip to the Lay Person section below. Enjoy!

Registered Agent Law

North Carolina Limited Liability Company Act

North Carolina General Statutes § 57D-2-40 Registered office and registered agent.

Each LLC must maintain a registered office and registered agent as required by Article 4 of Chapter 55D of the General Statutes and is subject to service on the Secretary of State under that Article.

North Carolina Business Corporation Act

North Carolina General Statutes § 55-5-01 Registered office and registered agent.

Each corporation must maintain a registered office and registered agent as required by Article 4 of Chapter 55D of the General Statutes and is subject to service on the Secretary of State under that Article.

North Carolina General Statutes Chapter 55D
Article 4.
Registered Office and Registered Agent

North Carolina General Statutes § 55D-30. Registered office and registered agent required.

(a) Each domestic corporation, nonprofit corporation, limited liability company, limited partnership, and limited liability partnership, each foreign limited liability partnership maintaining a statement of foreign registration, and each foreign corporation, nonprofit corporation, limited liability company, and limited partnership authorized to transact business or conduct affairs in this State must continuously maintain in this State:

(1) A registered office that may be the same as any of its places of business or any place where it conducts affairs; and

(2) A registered agent, who must be:

a. An individual who resides in this State and whose business office is identical with the registered office;

b. A domestic corporation, nonprofit corporation, or limited liability company whose business office is identical with the registered office; or

c. A foreign corporation, foreign nonprofit corporation, or foreign limited liability company authorized to transact business or conduct affairs in this State whose business office is identical with the registered office.

(b) The sole duty of the registered agent to the entity is to forward to the entity at its last known address any notice, process, or demand that is served on the registered agent.

 

North Carolina General Statutes § 55D-33. Service on entities.

(a) Service of process, notice or demand required or permitted by law to be served on an entity may be served on the registered agent as required by G.S. 55D-30.

(b) When an entity required to maintain a registered office and registered agent under G.S. 55D-30 fails to appoint or maintain a registered agent in this State, or when its registered agent cannot with due diligence be found at the registered office, or when the Secretary of State revokes a certificate of authority or a statement of foreign registration of a foreign entity authorized to transact business or conduct affairs in this State, the Secretary of State becomes an agent of the entity upon whom any such process, notice or demand may be served.

Service on the Secretary of State of any such process, notice or demand is made by delivering to and leaving with the Secretary of State or any clerk authorized by the Secretary of State to accept service of process, duplicate copies of the process, notice or demand and the applicable fee.

In the event any such process, notice or demand is served on the Secretary of State in the manner provided by this subsection, the Secretary of State shall immediately mail one of the copies thereof, by registered or certified mail, return receipt requested, to the entity at its principal office or, if there is no mailing address for the principal office on file, to the entity at its registered office. Service on an entity under this subsection is effective for all purposes from and after the date of service on the Secretary of State.

The Law In Lay Terms

Every legal entity in North Carolina needs a registered agent. The registered agent can be a person or another entity. However, that person or entity must be located in North Carolina. In other words, you can choose a North Carolina resident or North Carolina business.

The registered agent’s duty is to forward service, notices, and demands to the company. For example, they must forward lawsuits served by the sheriff or certified mail. If they don’t, the Secretary of State will accept the service for you. Unfortunately, this means you might miss notice of a lawsuit. That’s why it is important to have an agent that can always be around to receive these notices.

Additionally, you can list a principal office location on your articles. The Secretary of State will try to reach you there. Unfortunately, you have to sign for the notice. If you’re not around with the mail arrives, you’ll still miss it.

If the Secretary of State accepts service and can’t reach you, they can dissolve your company. This is bad.

General Best Practices

In my opinion, there’s nothing wrong with being your own registered agent. However, you have to be careful. I’ve served several companies through the Secretary of State. Subsequently, the Secretary of State dissolved those companies. It’s not vindictive. It’s my obligation to serve the Secretary of State if I can’t otherwise reach a business. Just like other attorneys, I have to do what is in my client’s best interest. Unfortunately, this could result in dissolution for you. In other words, you lose your limited liability protection simply because you missed a piece of mail.

You can act as your own registered agent. However, you should follow some best practices. Firstly, you need to pick an address you can always accept mail. Additionally, a sheriff has to be able to show up. Don’t use PO boxes. The statutes don’t forbid them. However, functionally, they don’t work.

You can hire a professional registered agent services. I don’t know a lot about how good they are. Since their duty is simply to forward the notices to the address they have on file, they have incredibly low liability. They have no legal obligation besides trying to send you mail. However, their business depends on reputation. Because of this, you should be able to check reviews prior to choosing one.

Conclusion

In conclusion, hopefully you’ll agree that the concept of a registered agent is very simple. However, as you can see, it’s also very important. Fortunately, if you follow some simple guidelines, you’ll be fine.

Above all, it doesn’t matter who your registered agent is. What matters is accept what they need to. If they let you down, the consequences can be extreme. Unfortunately, they don’t have a strict duty. Therefore, if you lose your company, you probably can’t sue them. You could really only sue if you can show they never even tried to contact you.

Finally, the registered agent is one reason I don’t recommend out of state companies. If you have a Delaware company, you need a Delaware registered agent. If you are also doing business in North Carolina, you also need a North Carolina registered agent. I think you can find a better use for that money.

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CategoryBusiness, Formations

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