Think of all the people you communicate with regularly to run your LLC. Business partners, employees, banks, lawyers, and financial advisors all probably come to mind. But what about the state? It may not be at the top of your list, but running a successful LLC in Delaware requires consistent interaction with the state.
Formation documents, business information changes, lawsuits, taxes and professional licenses – all of these (and more) require you to work with state agencies. The good news is that you don’t need to do it yourself.
Introducing the registered agent. A Delaware registered agent is an intermediary for your LLC, a person or company that handles your communication with the state. They’re a vital part of any LLC’s success. Before you file your Certificate of Formation, you’ll need to have a designated registered agent. How? Why? Who? Read on to find out.
You’ve got enough on your plate. Hiring a registered agent service lets you hand off those responsibilities so you can focus your energy where your passion lies. Let us at ZenBusiness handle the paperwork for just $99 the first year (LegalZoom charges $299).
What is a Delaware Registered Agent & is it Necessary?
An LLC cannot be formed or do business in Delaware without first having a registered agent on file with the Department of State. This is required by law and the penalties can be serious. Maintaining a registered agent doesn’t just keep you in good standing. It also provides an important service.
Think of your registered agent as your ambassador to the state, handling all your LLC’s important legal, tax, and compliance information. This can either be an individual, company or registered agent service, as long as they agree to take on the role and meet the state’s requirements (see below).
As soon as they’re appointed, your registered agent must be consistently available in Delaware to receive and act on mailed documents and service of process. An agent’s official job, as defined by the Department of State website, is to “accept service of process and other communications directed to the legal entity for which it serves as registered agent and forward same to the legal entity to which the service or communication is directed;”
Ensure that your LLC has a valid registered agent on file at all times, or it will forfeit its good standing status and be unable to request a Certificate of Good Standing, which may be necessary for opening bank accounts, purchasing real estate, applying for loans, and foreign qualifying in other states.
What are the Requirements of a Registered Agent?
Before an agent can start handling service of process for your business, they must meet the state’s foundational requirements, meaning the agent must:
- Be an individual Delaware resident or a corporation authorized to do business in the state.
- Have a physical address in Delaware (not a P.O. box).
- Have a mailing address in Delaware.
- Be present and available to receive service of process and other communications during normal business hours.
Once you’ve found a registered agent that meets these requirements, make the appointment official by including the name and address on the Certificate of Formation. Here’s a screenshot of what you’ll see on the document itself:
When you’ve got potential options for your registered agent, review each one to make sure that they meet these requirements. If they do, you’re good to go! If not, you’ll need to keep looking.
Who can be a Registered Agent in Delaware?
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Delaware’s registered agent requirements are pretty broad, so you’ll have no shortage of options. On top of that, your agent can be either an individual or a professional service. But think carefully before choosing, because each option has its own pros and cons. Let’s take a closer look.
LLC as Registered Agent
Delaware is unique among many other states because it allows an LLC can act as its own registered agent as long as it has an in-state physical and mailing address.
- Simpler Process – Acting as your own registered agent uncomplicates the formation process a bit, as you’ll have fewer details to iron out.
- Cost – Hiring a commercial agent or registered agent service costs money. Doing it yourself is free.
- Privacy Concerns – A home- or web-based LLC requires you to use your home address as the registered office, so your address would be part of your LLC’s public record. Additionally, this could cause you to receive more junk mail at home.
- Inconvenience – The registered agent needs to be available during all business hours which could be problematic if you are the LLC’s sole employee.
You may choose to appoint a single person as your registered agent. Some LLC owners take on registered agent duties themselves. Others appoint one of their partners or managers. Some will even appoint a family member. As long as the proposed agent fulfills the state’s requirements, they’re a valid option.
In addition to being a Delaware resident, your agent must not currently be establishing residency or receiving benefits in another state, even if that residency is still forthcoming.
Some smart registered agent choices include attorneys, accountants, or other LLC partners, people who understand the ins and outs of business operations.
- Convenience – Having familiarity and mutual trust with your registered agent is extremely beneficial, and appointing an acquaintance can provide both. Plus, you’ll always know how to contact them.
- Cost – Hiring someone you know often won’t cost a dime. It’s certainly cheaper than a professional service.
- Scheduling – Part of a registered agent’s duty is being consistently available to receive mailed documents and service of process. If your agent goes on vacation or moves out of state, it will throw a wrench in your plans.
- Punctuality Risks – Some state communications and filings are very time-sensitive. If your agent is unavailable when documents are delivered, it could slow down the entire process and put you at risk for late fees and penalties. Even worse, a friend or family member could lose or misplace a document. So if you’d rather not interrogate Aunt Louise about the location of a particular tax form, you might consider using a registered agent service instead.
Registered Agent Service
If safety and reliability is your goal, hire a registered agent service. A business acting as your registered agent must be either a domestic entity in Delaware or a foreign entity who has foreign qualified in Delaware.
- Privacy – Some documents delivered to your registered agent will contain sensitive information. Do you want details about your lawsuit or taxes lost out there in the world? Definitely not. A friend or family member might misplace these documents, but a professional service will not. Plus, in Delaware, all registered agent names and addresses are available to the public. This might make an individual uncomfortable, but hiring a company will keep this personal information off the record.
- Reliability – Handling and processing time-sensitive documents is a registered agent service’s specialty, its area of expertise, its main game. Hire a professional service and you can be sure that your filings will be submitted properly and punctually, so you’ll never have to deal with late fees or other penalties.
- Location – Many registered agent companies offer service in most or all 50 states, so if business is booming and you decide to expand outside Delaware, you won’t need to find a new agent for each state.
- Cost – There’s no getting around it – hiring a service costs more than appointing an individual who’s willing to do it for free. However, for a reasonable price (roughly $100/year), you’ll receive premium services. Taking your car to a mechanic costs more than letting your neighbor try to fix it, but the mechanic gives you peace of mind that the job will get done right, and that may very well be worth the cost.
All of the other steps in the LLC formation process will keep you busy, but take some time to ensure you find a registered agent that fits with your business model, goals, and values. Do this, and your LLC will reap the benefits for years to come.
Registered Agent Changes and Resignation
You may have a wonderful registered agent, someone who takes care of everything efficiently and who you trust completely. But you know what they say: all good things must come to an end. At some point in the life of your LLC, you may need to change your Delaware registered agent.
Delaware Department of State
Division of Corporations
401 Federal Street – Suite 4,
Dover, DE 19901
Or, you can fax your documents to (302) 739-3812.
The most probable reason you’ll need to make this change is because your incumbent agent resigns.
A resigning agent has the option of whether or not to appoint a successor themselves. If your agent decides not to appoint one, state law dictates that he or she must notify you at least 30 days in advance. Then, after submitting an official resignation, the agent must stay onboard for 31 days, so you’ll have ample time to find a replacement.
Even though you have plenty of time to bring on a new agent, don’t delay! Any LLC that spends more than 30 days without an agent on record will forfeit its charter in the state.
Have Questions or Concerns?
This guide contains almost everything there is to know about Delaware registered agents. However, you might have a unique situation that requires additional information. Reaching out to the Delaware Department of State is easy, and they’ll have the answers you need. Here’s how to go about it:
Visit Their Website
The Delaware Division of Corporate Services website contains a ton of useful information on the LLC formation process, registered agents included. You might find answers to your questions on this helpful FAQ page.
Give Them a Call
Sometimes, though, it’s nicer to speak with a person. If you’d rather chat on the phone, reach out to the Department of State’s Dover office at (302) 739-3073.