Assign a Registered Agent in California

When starting a business, most people focus on associates, lenders, legal teams, fiscal advisors and the list goes on. Seldom do they think of the authorities. After all, to a budding entrepreneur, the relationship with the state starts and ends with the business formation. However, that is not the case. In the same way that you will regularly update your associates on how well the venture is doing, you will also need to keep the authorities up to date.

Anything that you do to the business that affects its legal status will need to be communicated to the authorities, which can be a bit of a hassle. The upside is you do not have to do all this work yourself and you can hire someone or a company to do so on your behalf. Today, we look at what this delegation looks like, who can step up to this role and what to expect forging forward.

What is a registered agent for an LLC in California?

As we earlier mentioned, the authorities need to keep tabs on you and you also need to inform them of any legal changes to your operations. All this is possible by having you or someone else stand in and take care of this communication. Note that this is not an option, but rather, a requirement under the law. As such, there is no wiggle room for this. If you are not up to the task, you must find someone or a company that can handle this for you.

A registered agent California (which can be you or a third party) is your point of contact with the state. This registered agent LLC receives all documents that pertain to the legal nature of your business. These include tax and filing compliance paperwork, without which you would be at risk of breaching your terms of operation.

Once you have decided who will take up this role, you will include their details in your registration documents. From then moving forward, the authorities will know who to contact when and if needed. Please note that these California LLC registered agent details must always be valid or you can lose your compliance status.

Why Do I Need a Registered Agent in California?

For the most part, you need a California registered agent because the authorities will not okay your registration until you provide them with someone they can contact. Additionally, you run a number of risks if you operate without a valid intermediary as follows:

  • Not being involved in legal processes. If you get sued, the due course of action is for the law enforcement officer to track down the listed address and serve the court papers. In the event that the officer cannot reach you because you do not have a valid address, the case will continue. As such, you may find that the decision made in court is to your disadvantage at a much later date. Thus, if you want to get in on all the goings-on surrounding your business, you are better off taking charge of the operations from the word go.
  • Not being able to carry out your business activities. The point of an intermediary may seem like a minimal issue. After all, how can it affect how you go about your business? Well, your license largely depends on you following the stipulated rules in the state. That means that if you go against a compliance issue such as this, you can lose the permit to operate. It is thus in your best interests to stay on the good side of the law and avoid losing your right to operate.
  • Having to pay penalties and fees. Not only can the authorities levy charges on your business but in some cases, they can also come after you. You might think that having an LLC would protect you by separating yourself from the business. However, here is the thing. Once you lose your good standing with the authorities, your level of protection also dwindles and you are at risk of getting penalized.

If you would like to avoid the above scenarios, it is time to start thinking of who should represent you.

Who can be Registered Agent for your California LLC?

If you look at the state requirements, you will see that the authorities are pretty lenient on who can receive paperwork on your behalf. The good thing is that you can also choose between having an individual or a registered agent for LLC doing this for you as long as they meet the requirements. We will cover the requirements at a later stage. For now, let us look at the parties that can stand in for you:

An Individual

Did you know that an individual can serve as your point of contact? For this reason, some people choose to represent themselves, while others assign this role to another person in the company or an outside party they can trust. You can even ask a family member to stand in for you as long as they meet the minimum requirements. Please note that the said person should be a resident of California and should not be getting benefits from another state at the point of appointment.

Good examples of people you can choose include members of your company, your attorney (who already handles a chunk of your paperwork), accountant or another professional/ non-professional.

The Upsides

Why would anyone choose to go down the individual route? Well, here are some interesting pointers:

  • Trust- working with someone in your social circle or among your list of associates provides you with peace of mind that you may not necessarily enjoy from a stranger. Plus, it is quite convenient, knowing that you can contact them as and when needed.
  • Cost- as you start a new venture, you are probably highly inclined towards cutting costs and hiring someone you know enables you to do this. Sometimes, you can negotiate the rate or the person can do it without asking for money in exchange.

The Downsides

While hiring an individual you trust comes with a range of advantages, it also has some downsides you may want to consider as follows:

  • Availability- the authorities require that you have someone available during business hours. That means that if the person hired decides to take a break from work or goes in vacation, you can end up in legal trouble. Often, due to the casual nature of such appointments, your point of contact can up and leave as it pleases them.
  • Timeliness- all documents you receive from the state are important but some tend to have more urgency than others. It is thus important that your point of contact receive, scan and forward the documents as received. Where there is a delay in this communication, you can end up bearing the brunt of it all. Not only can you lose your good standing but you may end up paying fees and penalties to make up for your delay.
  • Lack of professionalism- with a company, the people tasked with managing your documents understand what is on the line if they do not. They would not want to taint their reputation, what with the ease of posting a negative review on social sites nowadays. But with people with whom you already have a relationship, this professionalism may not be at the top of their list. It is not unheard of for family members or friends to lose important documents. Imagine how uncomfortable it would be for you to question a loved one about such an occurrence. Sometimes, it is better to keep things professional by hiring a company to handle such tasks as we will see below.

Registered Agent Services

If you would rather avoid the hurdles that come with hiring loved ones or unqualified people to handle your legal documents, you have the option to engage a registered agent in California instead. This company should either be a domestic entity or a foreign one with the license to operate in the state.

Upsides

There is a lot of good that comes from leaving your legal correspondence to a registered Agent in the state, including:

  • Confidentiality- the information contained on some of the documents sent to you is of sensitive nature, e.g., getting sued. You thus would not want your loved ones coming across some of these documents. More so, you would not want to run the risk of such documents getting misplaced or lost and ending up in the wrong hands.
  • Privacy- with technology growing and people getting accustomed to the idea of working at home, more people are running business from the comfort of their homes. It would thus be better for you if you were to have your documents delivered to an address other than yours. Plus, if someone was to look you up in public records, they would not find you.
  • Professionalism- you can rest assured that the business registered agent’s focus will be on your well-being and they will do all that is possible to not only keep you updated on upcoming deadlines but they can also guide you on the processes. You can even get filing services for free with some packages.
  • Coverage- most of these companies operate in several states. Thus, if you ever decide to move or expand to another state, you can use the same company to keep you compliant.

Downsides

Unlike with individual representation, using a registered agent service California seems to have only one major problem which is the cost. You can expect to pay about $100 for each year of representation. On the plus side, you get to enjoy peace of mind and can focus more on your business as a result.

Can I Be My Own Registered Agent?

The state allows you to represent yourself. Please note that this comes with the caveat of exposing your address in public records as well as having to be available during the state’s working hours. If you can handle this, then you can elect yourself to this position.

Registered Agent Requirements in California

The person/ company you choose should meet the following requirements:

  • In the case of an individual, you must choose a person with residency in the state
  • In the case of a company, it should have a license to operate in the state
  • The person/ company must have a mailing address in the state
  • The person/company must have a physical address in California
  • You cannot use the LLC you are forming as the agent, but you or another member of the organization can represent it

California registered agent list 

There is a wide range of options when it comes to registered agent services. However, few companies have been seen to offer the best services. Some of the top-tier California registered agent service options include:

  • ZenBusiness registered agent
  • IncFile registered agent
  • Northwest Registered Agent
  • InCorp
  • Legalzoom registered agent
  • Rocket lawyer registered agent

How do I choose a registered agent?

If you are going to choose a registered agent company, you must consider the following:

  • What is the level of the customer service?
  • How many tiers do they offer when it comes to service packages?
  • Are the agents professional?
  • What technology do they use?
  • Are your details safe with them?
  • How can you reach them?
  • Are the services worth the value of the stated prices?

Most of this information is accessible by going through online reviews left by past and existing customers.