Should You Look For a Registered Agent in Texas?
Prior to filing the Certificate of Formation (Form 205) with the Secretary of State, you are required to choose a Registered Agent for a successful Texas LLC formation. In this guide, we will be providing you with all the relevant information regarding a registered agent in Texas. We hope that this guide can aid in the process of your Texas LLC formation.
What is a Texas Registered Agent
First, let’s talk about what a Texas registered agent is. A registered agent is usually a person or a company that accepts legal mail in the name of your Texas LLC in case the business gets involved in a lawsuit. The other name for legal mail is the Service of Process for your LLC.
It is also required by law for every formal business in the state of Texas to have a Texas 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 Texas like the Texas Annual Report & Franchise Tax and certificate of good standing.
Why does a Texas LLC need a Registered Agent?
As we’ve mentioned earlier, your Texas registered agent acts as the point of contact for all legal documents for your LLC. Having a registered agent on file with the state will allow a proper tracking of service of process and legal documents.
It is similar to the concept of ‘certified mail return receipt’, but from a legal aspect, it is how process servers, or otherwise known as people that deliver legal documents, make a record that something was delivered.
How to choose a Registered Agent for Your Texas LLC
According to the Business Organizations Code, a Texas registered agent must have a physical street address in Texas. The Texas Secretary of State will use that address 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 address, a mailbox rental service or a telephone answering service.
The Texas registered agent also needs to be available during normal business hours which is 9.00 am to 5.00 pm. This is because the service of process will usually be sent during normal business hours.
Can I be the Registered Agent for my Texas LLC
Yes, you can. As long as you are over the age of 18, have a physical street address in Texas, are available during the business hours and you don’t mind your address existing on public record, then you are free to be the registered agent of your LLC. You should also be aware of some of the risks of being your own registered agent in Texas.
Risk of being your own Registered Agent in Texas
One of the risks of being your own registered agent in Texas involves listing your information in public records. While this might not be a big risk, some business owners might not prefer to expose their information or address.
If you do decide to be your own registered agent, the information you submit in the Certificate of Formation will become public record with the Texas Secretary of State. In that case, this information will be available and accessible to the public and other websites can also download the records to republish them on their own website.
Eventually, the process goes on as other so-called “public record websites” get a hold of this information and it will be listed on their website again. Soon enough, your address will be on multiple websites and anyone can find it through a Google search. Fortunately, there is a solution to ensure your address is off public records, which we will discuss later.
Additionally, another possible risk, though unlikely to happen, is that you could lose your liability protection and the Texas Secretary of State will shut down your Texas LLC if you’re not in compliance with the state laws. 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 case the process server (person who sends lawsuit notices and court documents) is unable to reach the registered agent of your Texas LLC or unable to successfully serve your LLC through the Secretary of State, 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’re not there to defend yourself.
Who else can be a Texas Registered Agent
Besides yourself, here are some other parties that can be a registered agent in Texas
Friend or Family
If you don’t have a street address located in the state of Texas, but you’ve got a friend or family member who stays in Texas and has an address, they can be a registered agent for your LLC too. The same criteria applies where they’ll need to be reachable during business periods and they should be fine with their address listed on public records.
Registered Agent Service
The other convenient option is to hire a registered agent service. They usually cost about $50 to $300 per year 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 they are specialized in receiving 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 legal 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 Certificate of Formation 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 Texas registered agent service, 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.
Flexibility
Being your own registered agent in Texas 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 at those times.
This allows you to have more flexibility in a sense that you don’t need to be available at all times and you can choose to go on a vacation, work wherever you have to or travel around. You can do all that knowing that they’ll be handling your paperwork.
Online storage
Normally, a registered agent 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.
National coverage
One of the reasons that businesses hire a registered agent is if they plan on expanding their business into other states, it is necessary to have one for your foreign LLC or other business entity. Many registered agent services operate in all the states but you do need to pay a little more for the new state and documents will be delivered to the same online dashboard.
Best Texas Registered Agent Service
The best Texas registered agent service that we highly recommend is the Northwest Registered Agent. They 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 address is not published publicly.
There is a growing number of Texas business owners who start from their home and as a result, all the addresses stated in the Certificate of Formation will be listed publicly. So if you were thinking of using your personal home address but you would prefer to keep it from being listed publicly, you can hire a Texas registered agent 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 that price, you will also be getting every mail sent to your LLC in your online account.
Consent to Serve as Registered Agent
When you are going to appoint a registered agent, the registered agent will need to file the Form 401-A – Acceptance of Appointment and Consent to Serve as Registered Agent. While this consent form isn’t something that you need to file with the Texas Secretary of State, you should still keep a copy or submit the consent form so it’s in the filing history of your LLC.
Appointing a registered agent without their consent could lead to penalties and legal disputes. However, if a registered agent intends to reject the appointment, they can also file the Form 428 – Rejection of Appointment.
Change of Registered Agent
You are allowed to change registered agents as many times as you see fit. However, you will have to fill out Form 401 – Change of Registered Agent/Office and pass it on to the Texas Secretary of State with a filing fee. The filing fee is $15 regardless of how many times you hand in the form to the Texas Secretary of State. It can also be done through mail, fax or in person.
FAQ
Can my LLC be its own registered agent?
No. There are only some states which allow an LLC to be its own registered agent, but unfortunately, an LLC cannot be its own registered agent in the state of Texas. You can hire a registered agent in Texas or your LLC can appoint another company (which can be an LLC, Corporation, or any other business entity) to be the registered agent.
Am I liable for the LLC if I am the registered agent?
No. Just because you’re the registered agent for an LLC, doesn’t mean you’ll be responsible for the debts, liabilities, or obligations of the LLC.
Why do I need a registered agent in Texas?
First of all, a registered agent is required by law for an LLC, corporation, or other formal business entity in every U.S state except for New York. Hence, each business in Texas needs to have a registered agent.
A registered agent has a different name in different states, such as a resident agent or a statutory agent. Regardless of the name, they still provide the same professional service.
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