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 commonwealth? It may not be at the top of your list, but running a successful LLC in Massachusetts requires consistent interaction with the commonwealth.
Formation documents, business information changes, lawsuits, professional licenses, and Annual Reports – all of these (and more) require you to work with commonwealth agencies. The good news is that you don’t need to do it yourself.
Introducing the resident agent. A Massachusetts resident agent is an intermediary for your LLC, a person or company that handles your communication with the commonwealth. They’re a vital part of any LLC’s success. Before you file your Certificate of Organization, you’ll need to have a designated resident agent. How? Why? Who? Read on to find out.
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What is a Massachusetts Resident Agent & is it Necessary?
An LLC cannot be formed or do business in Massachusetts without first having a resident agent on file with the Secretary of the Commonwealth. This is required by law and the penalties can be serious. Maintaining a resident agent doesn’t just keep you in good standing. It also provides an important service.
Think of your resident agent as your ambassador to the commonwealth, handling all your LLC’s important legal, tax, and compliance information. This can either be an individual, company or resident agent service, as long as they meet the commonwealth’s requirements and agree to the appointment.
As soon as they’re appointed, your resident agent must be consistently available in Massachusetts to receive and act on mailed documents and service of process. Here’s what the Massachusetts statutes specifically say:
Resident agent information is a crucial part of your LLC’s filings. Without it, your Certificate of Organization and Annual Reports will be rejected.
What are the Requirements of a Resident Agent?
There are very few restrictions on who you can appoint as your resident agent, but if you don’t want to incur penalties, you should follow them. Make sure that your agent:
- Is an individual Massachusetts resident or a business entity authorized to do business in Massachusetts.
- Has a physical address in Massachusetts (P.O. boxes are not allowed)
- Has a mailing address in Massachusetts (may be identical to the physical address)
You even have the option of assuming the role yourself, as long as you don’t mind the added responsibilities.
Regardless of who you choose, you’ll need to include your agent’s information on your Certificate of Organization to complete the form. This includes a signature from the agent, consenting to the appointment. Here’s what you see on the document:
When you’ve got potential options for your resident 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 Resident Agent in Massachusetts?
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Massachusetts’ resident 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.
You may choose to appoint a single person as your resident agent. Some LLC owners take on resident 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 commonwealth’s requirements, they’re a valid option.
In addition to being a Massachusetts resident, your agent must not currently be establishing residency or receiving benefits in another commonwealth, even if that residency is still forthcoming.
Some smart resident 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 resident 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 resident 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 commonwealth 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 resident agent service instead.
Resident Agent Service
If safety and reliability is your goal, hire a resident agent service. A business acting as your resident agent must be either a domestic entity in Massachusetts or a foreign entity that has foreign qualified in Massachusetts.
- Privacy – Some documents delivered to your resident 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 Massachusetts, all resident 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 resident 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 resident agent companies offer service in most or all 50 states, so if business is booming and you decide to expand outside Massachusetts, 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 resident agent that fits with your business model, goals, and values. Do this, and your LLC will reap the benefits for years to come.
Resident Agent Changes and Resignation
You may have a wonderful resident 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 Massachusetts resident agent.
Make this change one of two ways: through the Corporations Online Filing System or by mailing a completed Statement of Change of Resident Agent/Resident Office form to:
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, Massachusetts 02108-1512
You can also fax it to (617) 624-3891, but you’ll need to include a Fax Voucher Cover Sheet. Regardless of which method you choose, the filing fee is $25 and the processing time is 3-5 business days.
There are a number of reasons you might need to file for a change, but the most common is a resident agent’s resignation.
Resident agents aren’t required to notify their companies before they resign, so it might come as a surprise. But don’t worry, resigning agents in Massachusetts must retain their duties for 31 days before their resignation takes effect. This will give you plenty of time to line up a replacement.
But don’t drag your feet! If you don’t have a valid new agent by the time you file your next Annual Report, your LLC will lose its good standing with the commonwealth, and if you fail to submit two consecutive reports, your LLC will be administratively dissolved.
Have Questions or Concerns?
This guide contains almost everything there is to know about Massachusetts resident agents. However, you might have a unique situation that requires additional information. Reaching out to the Massachusetts Secretary of the Commonwealth is easy, and they’ll have the answers you need. Here’s how to go about it:
Visit Their Website
The Massachusetts Secretary of the Commonwealth website has a lot more information on the entire LLC formation process. You’ll likely find answers to your questions here.
Give Them a Call
Or, if you’d prefer to call, reach out to their Boston office at (617) 727-9640.