Why Look For a Registered Agent in Delaware?
Prior to filing the Certificate of Formation with the Delaware Secretary of State, you are required to choose a Registered Agent for a successful LLC formation. In this guide, we will be providing you all the relevant information regarding a registered agent in Delaware and We hope that this guide can help in the process of your LLC formation in Delaware.
How is a Delaware LLC Formed
Before moving on to the information about Delaware registered agents, let’s take a quick look at how an LLC is formed in Delaware.
- Choose a company name. The first step of your LLC formation in Delaware is to select a unique company name. Businesses in Delaware cannot have the same name and it must not contain the words “limited liability company”, LLC or any government-related names such as FBI.
- Select a registered agent. The second step of forming an LLC is to select a registered agent. You can think of the job of a registered agent as the point of contact for your LLC for all communication with the Delaware Division of Corporations or the State of Delaware. Essential paperwork like tax notices and official documents will be delivered to the registered agent.
- Filing paperwork with the state. Your LLC can be formed online and once the important paperwork is done, submit it to the state and wait for approval from the State of Delaware.
- Pay the filing fee. Forming an LLC in Delaware requires state fees when you file the paperwork. The filing fee to be expected is $90 and the owner of the LLC is required to pay an annual LLC tax of $300. After filing the paperwork, paying the state fees and being approved by the state, your LLC will be formed.
- Make an LLC operating agreement. After your LLC formation, you should move on to creating an operating agreement. While this document isn’t required by law, it can be of great help for your company to have it.
- Get an EIN. An EIN is short for Employer Identification Number and it’s good to get it when forming an LLC because it will help with business-related duties like filing taxes, hiring employees, and opening a bank account.
What is a Delaware Registered Agent
Now, let’s talk about what a Delaware registered agent is. A registered agent is usually a person or a company that accepts legal mail in the name of your business in Delaware in case the business gets involved in a lawsuit. The other name for legal mail is also the Service of Process for your LLC.
It is also required by law for every formal business in the state of Delaware to have a Delaware registered agent. Not only does the registered agent receive every service of process for the business, but they also act as the point of contact for your LLC for all communication with the State of Delaware like the Delaware Annual Franchise Tax and certificate of good standing.
Why does a business in Delaware need a Registered Agent
As we’ve mentioned earlier, your Delaware registered agent acts as the point of contact for all legal documents for your LLC. Having a Delaware registered agent on file with the state will allow a proper tracking of service of process and legal documents.
How to choose a Registered Agent for your LLC
A Delaware registered agent must have a physical street address in Delaware and the Delaware Secretary of State will use it to deliver official documents to your business. You should note that the registered agent address, or otherwise known as the Registered Office, cannot be a PO box, a mailbox rental service or a telephone answering service.
The Delaware registered agent also needs to be available during normal business hours which is between 9.00 am to 5.00 pm. This is because the service of process will usually be sent to the registered agent during normal business hours.
Can I be the Registered Agent for my LLC
Yes you can. As long as you are over the age of 18, have a physical street address in Delaware, are available during the business hours and you don’t mind your details existing on public record, then you are free to be the registered agent in Delaware for your business.
Who else can be a Registered Agent in Delaware
Besides yourself, here are some other parties that can be a registered agent in Delaware
Friend or Family
If you don’t have any addresses located in the state of Delaware, but you’ve got a friend or family member who stays in Delaware and has an address, they can be a registered agent for your company too. The same requirements apply where they’ll need to be available during normal business periods and they should be fine with their details listed publicly.
Registered Agent Service
The other convenient option is to hire a registered agent service. They usually cost about $50 to $300 for a year of services but for such a small cost, you’re getting immense convenience. We will be exploring more about registered agent services so keep reading to find out more.
Why businesses Use a Registered Agent Service
A registered agent service and commercial registered agent have the same meaning and registered agent services are specialized to receive service of process on behalf of your LLC. Hiring a registered agent service is a common thing to do for business owners and here are some of the reasons why.
Compliance
Generally, 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. Having this compliance calendar can help in avoiding fines and maintaining your company in good standing. This is especially crucial 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 lawful matters, fees or other problems. The registered agent service will help to scan your documents, share them with you 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 in the formation document and is publicly available. But if you care about your privacy and do not want to expose where you’re staying or working, hiring a registered agent would be the ideal choice because they will use their own street address instead of yours.
Discretion
It’s never a good feeling to be getting a service of process for a lawsuit against your company and it can be sensitive especially when it happens in front of your clients or employees. But with a registered agent service, they will be receiving the service of process and other relevant documents on behalf of your company at their office as opposed to yours and they will scan and deliver them to you online in a discreet manner.
Flexibility
Being your own registered agent in Delaware means you need to be available during regular business periods every working day throughout the year. This is extremely inconvenient and why businesses hire a registered agent. Registered agent services usually have physical offices and staff working at those periods so they will be available all the time.
This allows you to have more flexibility in a sense that you don’t need to be available all the time and you can choose to go on a vacation, work wherever you have to or travel around. You can do all that knowing that the registered agent in Delaware will be handling your paperwork.
Online storage
Normally, a registered agent service will scan your documents once they receive them and store a digital copy of every 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 dashboard online.
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 need a copy of these documents and registered agent services can come in handy.
National coverage
One of the reasons 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 but you do need to pay an additional price for the new state and the documents for your companies will be delivered to the same online dashboard.
Best Delaware Registered Agent Service
The best Delaware registered agent service that we highly recommend is the Northwest Registered Agent. The Northwest Registered Agent have been around for more than 20 years and they are recognized for providing exceptional customer service. Most importantly, they allow you to use their address to form your LLC, ensuring that your details are not published publicly.
There is a growing number of Delaware business owners who start from their home and as a result, all the addresses stated in the formation document will be listed publicly. So if you were thinking of using your own place-of-stay but you would prefer to keep it from being listed publicly, you can hire Delaware registered agent services like the Northwest Registered Agent.
This registered agent service charges $125 per year and allows you to use their address in your Certificate of Formation with no additional cost. For the price of $125 per year, you will also be getting every mail sent to your LLC in your online account, like every other registered agent in Delaware.
Change of Registered Agent in Delaware
The change of your registered agent in Delaware can happen at any time and you can change as many registered agents as you like as long as you or your company sees fit. To change the registered agent of your business, you are required to fill out the Change of Agent form and submit it to the Delaware Division of Corporations.
You should be aware that a $50 filing fee is required and you can submit the Change of Agent form online or by mail. Plus, it is important to note that if your company is not in good standing with the State of Delaware, the change of registered agent can’t happen.
FAQ
What is a commercial registered agent?
When you form a Delaware corporation or LLC, you might be asked whether the registered agent of your company is commercial or non-commercial. A commercial registered agent refers to a registered agent service, while a non-commercial registered agent is a person and it can be anyone whether he/she is from your company or not.
What is a statutory agent?
You might have come across the name “statutory agent” during your research but they are actually the same as a registered agent. Different states have different names for it but they all have the same duty.
Is a registered agent the same as an owner?
No, the agent isn’t the same as the owner. A registered agent keeps every paperwork up to date and receives official paperworks in the name of the business, but a registered agent doesn’t have the same role as a business owner. However, a business owner can decide to act as the registered agent of his/her company.
Can my company be its own registered agent?
No. There are only some states which allow a business entity to be its own registered agent, but unfortunately, a company cannot be its own registered agent in the state of Delaware. You can hire a registered agent in the state or you can appoint another company (which can be an LLC, corporation, or any other business entity) to be the registered agent.
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.