Should You Get a Registered Agent in California?
Prior to filing the Articles of Organization with the California Secretary of State, you are required to choose a Registered Agent for a successful California LLC formation. In this guide, we will be providing you all the relevant information regarding a registered agent in California.
We hope that this guide can help in the process of your California LLC formation so keep on reading to find out more.
What is a California Registered Agent
First and foremost, let’s talk about what a California registered agent is. A registered agent in California is normally a person or a company that accepts legal mail (Service of Process) in the name of your California LLC in case the business gets involved in a lawsuit like getting sued. Other than the name, registered agent, they are also known as an agent for service of process.
It is also required by law in the state of California for every formal business, like an LLC or a corporation, to have a California registered agent.
The job of a registered agent is not only to receive every official paperwork or notice from the California Secretary of State, but to act as the point of contact for your business for every communication with the State of California like the California Annual Report and certificate of good standing.
Why does an LLC in California need a Registered Agent
An LLC in California requires a registered agent because they play a big role in how the court and legal system work. Being a requirement for California LLCs to have a registered agent on file with the state will allow a proper tracking of service of process and legal documents between the Secretary of State and the LLCs.
It is also similar to the concept of ‘certified mail return receipt’, but when we look at it from the legal aspect, this is how process servers (people that deliver court and legal documents) make a record that those documents were delivered.
How to choose a Registered Agent for your California LLC
For a successful LLC formation in the state of California, an important formation document known as the Articles of Organization is required to be filed with the California Secretary of State. However, before filing the Articles of Organization, you will need to choose a registered agent first.
According to Section 17701.13 of the California Law, Corporations Code, the registered agent must have a physical street address in the state of California. This will be the business address and where the Secretary of State will deliver official documents to. The registered office (address of the registered agent) cannot be a PO box address, a mailbox rental service or a telephone answering service.
The California registered agent of your LLC must also be available during normal business hours which is between 9.00 am to 5.00 pm. This is because the service of process and delivery of legal documents such as complaints, summons, and subpoenas will usually be sent during normal business hours.
After choosing the registered agent or agent for service of process for your business, you can file it online or by mail. You should note that a filing fee is required whether you choose to file it online or by mail.
Online
The most convenient method to form your LLC is through the online method. You can complete your LLC formation online on the California Secretary of State website and a $70 filing fee is required. Besides that, under Article III of the online form, it will require you to provide the name and contact information of your registered agent.
Another way of forming your LLC in California is by mail. You will need to download the Articles of Organization online, fill in the necessary fields and submit a physical copy to the California Secretary of State with $70 of filing fee and an additional $15. On page 6, under the “Service of Process” section, you will be asked to provide the necessary information of your registered agent.
Can I be the Registered Agent for my California LLC
As long as you are over the age of 18 and have a physical address in California, you can be the registered agent for your LLC. You should note that you also need to be available during the business hours which is from 9.00 am to 5.00 pm and your address will be on public record.
You should also be aware of some of the risks of being your own registered agent in California which we will talk about in a while. Besides yourself, there are also others that can be the registered agent for your California LLC and we will cover this in a short while.
Risk of being your own Registered Agent in California
One of the risks of being your own registered agent in California is listing your personal information in public records. While this might not be a big risk for some people, some business owners might not want to expose their personal information or street address to the public.
If you do decide to be your own registered agent in California, the information you submit in the Articles of Organization will become public record with the California Secretary of State. As a result, your information will also become available and accessible to the public and other websites can also download your records to republish them on their own website.
Eventually, the process goes on as other so-called “public record websites” get a hold of your information and it will be listed on their website again. Soon enough, your address will be on more than one website and anyone can find it through a Google search. Fortunately, there is a solution to ensure your address stays off the public records and we will discuss it later.
Additionally, another possible risk, though unlikely to happen, is that you could lose your liability protection and the Secretary of State will shut down your California LLC if you’re not in compliance with the state laws. However, this will only happen if you’re unable to “continuously maintain” a registered agent on file or if the Secretary of State is unable to get a hold of your registered agent.
Besides that, if in any event the process server (person who sends lawsuit notices and court documents) is unable to reach the registered agent of your LLC or unable to successfully serve your LLC, the court case can still go on without your presence and you may not be aware too. The worst case scenario is that the court case could go into a default judgment against your LLC if you are not there to defend yourself.
One way to prevent your registered agent from being unreachable is to identify the reasons first so it can be avoided and here are some reasons a process server cannot get a hold of your registered agent:
- The registered agent is not available during business hours
- The registered agent is on a vacation or out of town
- The registered agent moved and you forgot to file the Change of Registered Agent
Who else can be a California Registered Agent
Other than yourself, here are some other parties that can be a registered agent in California.
Friend or Family
If you do not have a street address located in the state of California, but you have a friend or a family member who stays in California and has an address, they can be a California registered agent for your limited liability company too.
However, you should note that the same requirements apply where they’ll need to be reachable during business periods and they should be fine with their address listed on public records. If your friend or family member is unable to meet the requirements, then they will not be the best choice for a California registered agent.
Registered Agent Service
The other convenient option is to hire a professional registered agent service. Registered agent services usually cost about $50 to $300 per year but for such a small cost, you are getting immense convenience. We will be exploring more about registered agent services in California, so keep reading to find out more.
Why businesses Use a Registered Agent Service
A registered agent service specializes in receiving the service of process on behalf of your LLC. Hiring a professional registered agent service is a common thing to do for business owners and here are some of the reasons why.
Compliance
Normally, a registered agent service keeps a compliance calendar which reminds you when annual reports or other filings are due and they will also help to file them. Registered agent services with a compliance calendar help businesses avoid fines and ensure that companies remain in good standing. This is especially helpful if you intend to maintain your limited liability protection.
As we’ve mentioned earlier, if you do not respond to the service of process in time, you may face legal matters, fees or other issues. Having a registered agent service means they will help to scan your documents, share them with you through an online dashboard and notify you when they are available.
Privacy
If your work is in your home or a private office, acting as your own registered agent means your address will be publicly available and people can look for it on the California Business Entities Search.
But if you care about your privacy and do not want to let others know where you are staying or working, hiring a registered agent service would be the ideal solution because they will allow you to use their own street address instead of yours.
Discretion
It is never a good feeling to be getting a service of process for a lawsuit against your company and it can be a sensitive matter especially when it happens in front of your clients or employees.
One of the many reasons that a business would hire a registered agent service is because they will be receiving the service of process and other relevant documents at their office as opposed to yours and they will deliver them to you online in a discreet manner. That way, you can avoid dealing with this sensitive issue in front of your client or employees.
Flexibility
Being your own registered agent in California means it requires you to be available during regular business periods from 9.00 am to 5.00 pm every working day throughout the year. This is extremely inconvenient and why businesses hire a registered agent instead of being their own registered agent.
Registered agent services usually have physical offices and staff working during the time of business so they will be available to receive your company’s service of process. This allows you to have more flexibility in a sense that you don’t need to be available and reachable all the time and you can choose to go on a vacation, work wherever you want to or travel around. You can do all that knowing that they’ll be handling your paperwork.
Online storage
Registered agent services will normally scan your documents once they receive them and keep a digital copy of each business document and service of process on an online dashboard. If you use an LLC formation service, you will usually use them as a registered agent as well and the copy of your formation documents will also be on the online dashboard.
Keeping the information is helpful for your business when you want to open business bank accounts, apply for a credit card or small loans. There are also other things that may require a copy of these documents, so it’s good that registered agent services offer an online storage for it.
National coverage
One other reason that businesses hire a registered agent service is if they plan on expanding their business into other states, it is necessary to have a registered agent for your foreign LLC or other business entity.
Many registered agent services operate in all the states and Washington D.C. but you do need to pay an extra fee for the new state you intend to operate in and the documents will be delivered to the same online dashboard with your other businesses.
Best California Registered Agent Service
In this guide, we will be taking a look at the two best California registered agent services which are the Northwest Registered Agent and Zen Business.
Northwest Registered Agent
The California registered agent service that we highly recommend is the Northwest Registered Agent. They have been in business for more than 20 years and are known for their great customer service. Most importantly, they allow you to use their address to form your LLC, making sure that your personal address is not published publicly.
There are more and more people starting a business from their home and as a result, all the addresses that were submitted will be listed publicly. So if you were thinking of using your home address but you would prefer to keep it from being listed publicly, you can hire a California registered agent like them.
This registered agent service in California charges $125 per year and allows you to use their address with no additional cost. For that price, you will also be getting every mail sent to your LLC in your online account. Their customer support is exceptional too because they dedicate a representative to each customer.
If you use them for more than 10 businesses or use them in more than 10 states, their fees will only be $100 per year per business. In addition, they also offer one year of free registered agent service if you use them for your LLC formation, which will cost you $225 and the $125 per year will start on the following year.
Zen Business
The other best registered agent service in California is Zen Business. They are one of the best registered agent services in California because of their excellent customer service and they are highly knowledgeable when it comes to forming and maintaining an LLC. You will also be getting the best value for your money with Zen Business.
They offer their registered agent service at a price of $99 per year while meeting all state requirements. Zen Business also offers worry-free compliance which alerts you about every compliance event, covers your annual filing and ensures good customer support is provided.
Zen Business has an online document management system and with their regular compliance alert, you can work with them under a worry-free condition. Zen Business will scan and upload all the important legal paperworks into a convenient online dashboard that is accessible at any time.
They offer a California registered agent service at the cost of $99 per year but if you use them to form your business as well, you will only need to pay $39 plus the filing fees of $70/$100 in California for the first year.
After that, the annual cost will be $119 every year. Zen Business is undoubtedly the ideal California registered agent service that gives you the best value for your money.
FAQ
How do I change my California registered agent?
A registered agent is crucial for every business entity and it can be changed at any time but you must follow the requirements of the state your business is operating in. When a business entity intends to change their registered agent, they will have to file a new Statement of Information, even if they’ve already done so for the year.
Every business entity in California must file a business report on a regular basis and this report is called a Statement of Information. This Statement of Information must also be filed within 90 days of forming your business. Besides that, when you want to change your California registered agent, you must also fill out the Statement of Information form.
Doing this ensures that the state is kept up to date about where the process should be served. Different forms are needed for different business structures when you plan to change registered agents and for an LLC, you will have to fill in the Form LLC-12. You can do so online, by mail or in person. The filing fee for corporations will be $25 and for LLCs, it will be $20.
Is a registered agent required in California?
First of all, having a registered agent is one of the many requirements for an LLC, corporation, or other formal business entity in every U.S state except for New York. Hence, every California business needs to have a registered agent.
A registered agent has a different name in different states, such as a resident agent, a statutory agent or an agent for service of process. Regardless of the name, they still offer the same professional service.
Am I liable for the LLC if I am the registered agent?
No. Just because you are the registered agent for an LLC, it doesn’t mean you are responsible for the debts, liabilities, or obligations of the business.
What should I do after getting a registered agent for my business?
After you have decided on the person or the company that will be your registered agent, your next step will be the California LLC Filing Form which is also known as Articles of Incorporation or Organization. Do make sure that the California registered agent service is already hired before moving on to the next step to form your business.
Can my business be its own agent for service of process?
No. Also, no corporation may file a certificate pursuant to California Corporations Code Section 1505 unless that corporation has been authorized to do business in California and is in good standing on the records of the Secretary of State.
How much does a registered agent cost?
If you act as your own registered agent, then it will be free. But if you hire a registered agent service, it will usually be in the price range of a hundred to a few hundred dollars annually.
Starting a business correctly doesn’t have to be difficult. With over 15 years of experience consulting new businesses and start ups, Matthew is probably the best person to help you set a strong foundation for your business.