Forming an LLC in California is a big decision. Before filing the Articles of Organization, you will need to choose an agent for service of process. In this article, we’re going to walk through what the role of an agent for service of process is and what your options are as a business owner.
What is a California Agent for Service of Process & is it Necessary?
Yes, an agent for service of process is legally required. An agent for service of process is an individual or service that acts as a go-between with the LLC and the state of California.
In short, the agent for service of process assumes statutory responsibilities. He/she must agree to receive and deliver any official communications such as tax or legal documents from the state of California to the LLC. Furthermore, the agent must be consistently available to carry out this responsibility without interruption.
Here’s what the California Secretary of State specifically says:
If an LLC does not assign or maintain an agent for service of process, the LLC risks being named non-compliant. This can lead to dissolution of the LLC by the state.
What are the Requirements of an Agent for Service of Process?
Aside from carrying out the statutory responsibilities defined above, a registered agent must meet the following requirements:
- The agent must be an individual resident of the state of California or a corporation authorized for business in California.
- The agent must have a physical address in California.
- The agent must have a mailing address in California.
- An LLC cannot act as its own agent for service of process in California.
For reference, here is a screenshot of what information is required on the California Articles of Organization:
Who can be an Agent for Service of Process in California?
The registered agent can be either an individual or a professional service. Here are the pros and cons of each option.
As mentioned above, if using an individual as your agent for service of process, the individual must be a resident of California.
This means that the individual cannot be in the process of establishing residency in another state, territory, or country or receiving benefits while claiming residency in another state, territory, or country.
Otherwise, the individual can be an attorney, accountant, or even a friend or family member. Simply add the person’s name and address to the Articles of Organization.
- Convenience – Using someone you know saves the time of searching for a agent for service of process. The individual is probably also someone that you trust.
- Cost – The cost will likely be much lower than using a service, perhaps even free.
- Inconvenience – The individual who acts as agent is required to be available without interruption. This might make vacations a bit tricky.
- Risk that documents are not delivered in timely manner – If using an attorney, for example, you may be risking that she/he is away from the office at the time of delivery. This leaves open the possibility that the document is put in other hands, possibly slowing the process. If using a friend or family member, you run the risk of having documents misplaced or even ignored. Personal and work lives often have many distractions. For example, if quarrelling with Aunt Louise over a late or missing tax document worries you, using a service may be a better option.
If a service is acting as an agent, it must be a business, professional, or non-profit corporation. It cannot be an LLC, LLP or LP. Agent services provide this type of assistance. The service’s name must appear on California’s List of Registered Corporate Agents.
In order to be listed, the service needs to file Form 1505 with the California Secretary of State. Necessary information includes names of the authorized employees who will accept service of process on behalf of the LLC.The filing should include the cover sheet and a $30 filing fee which can be mailed, delivered in person, or completed online. Standard processing is about five business days. To be clear, it is the agent service that needs to file this form, not the LLC.
The service’s name and address must be included on the Articles of Organization.
- Privacy – If documents regarding a sensitive issue such as a lawsuit are being delivered, the service provides a cushion of privacy between your business and the public. In addition, the address of the service, not your business (or family member or friend) is public record. This means that marketing materials or junk mail will be sent to the service, not to the LLC.
- Reliability – The agent for service of process needs to be available during regular business hours – all business hours. Using a service might provide a measure of comfort knowing that important documents will not slip through the cracks (as long as you use a reputable service). After all, receiving and delivering important and time-sensitive documents is what the service is experienced doing.
- Location – An LLC is not required to maintain a physical presence in the state of California. The LLC may also do business in various states. Many services have you covered by providing that presence in multiple or even 50 states.
- Cost – Using a service is going to cost you more than using an individual. Still, having the peace of mind that important documents are being handled by a professional service may be worth it.
- Unfamiliarity – Using an individual usually means using someone you know and trust. With an unknown entity there is always a risk of unsatisfactory service. Of course, this is what reviews are for!
Finding an agent for service of process that is the right fit for your LLC may be one of many tasks when setting up your LLC, but one that is essential to running your business efficiently.
How to get a Free Agent for Service of Process in California
The most cost effective way to get a free agent for service of process in California is to use a professional LLC service that also offers a free agent service (registered agent).
How it Works
Simply hire a service like IncFile and Northwest Registered Agent to register a California LLC. As part of their package, they’ll include a free agent for service of process and list their address instead of yours on the Articles of Organization.
All you pay for is the $70 California state LLC formation fee + $49 or $79 service fee.
This will remove all agent for service of process responsibilities off your plate, take care of LLC formation paperwork and provide you with an online dashboard to keep track of things that come up in regard to your LLC in California.
How to Change Your California Agent for Service of Process
If you need to change your current registered agent in California, you must file a Statement of Information. This is the same form whether you’re a domestic or foreign LLC. It’s a multipurpose form that California requires all LLCs to file within 90 days of formation and every two years after that. However, you’re also allowed to submit a new one at any time to notify the state about agent for service of process or other changes.
When you do your required 90-day and biennial Statement of Information filings, there is a $20 fee attached. But any time you submit this form to change your LLC information in between required filings, you do so free of charge.
Your filing options are online, by mail, or in person and all three have the same fee structure. To submit via mail, download and complete the form, then send it to:
Secretary of State, Statement of Information Unit
P.O. Box 944230
Sacramento, CA 94244-2300
Or, if you’re local to Sacramento and feel like getting out and about, you can hand deliver it to the Secretary of State’s office at:
1500 11th Street
Sacramento, CA 95814
If you aren’t near Sacramento and don’t want to wait for your form to arrive by mail, you have another option. Filing online is the quickest and easiest way to get it done. Just click the computer icon next to the Statement of Information form and follow the onscreen instructions.
In certain states, you can change you agent for service of process by updating your Articles of Organization or annual report. Unfortunately, California does not allow you to make the change by updating your Articles of Organization. However, your biennial Statement of Information filings serves as your “annual report,” and you can also change your agent during that process.
If you’re too busy, or if you’d feel more comfortable letting someone else take the reins, you have the option of hiring a company or individual to file your paperwork for you. It’s a great way to save time and stress.
Submit your form? Pay your fee? You’re on your way to a new agent for service of process. If you want to know when to expect the change, the Secretary of State website updates their processing times on a day-to-day basis, and you can find them here.
Have Questions or Concerns?
If you’d like to talk to the state directly about your questions or concerns, it’s easy!
Visit Their Website
Visit the California Secretary of State website for more information about agents for service of process in the state of California. They have a great FAQ regarding how to change a name or address for an agent and much more you should be aware about.
Give Them a Call
If you’d prefer to call, reach out to their Sacramento office at (916) 657–5448.