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Before forming a Limited Liability Company (LLC) in Maryland, a Resident Agent has to be identified. Learn who the Resident Agent is, their job duties and the requirements to be one.
What is a Resident Agent?
A Resident Agent (referred to as a Registered Agent in most states) is an individual or company, designated by the entity to receive important legal documents on behalf of the business.
What does a Registered Agent Do?
The duties and requirements of the Resident Agent are found in Maryland Statutes § 2-108. These say LLCs will have and continuously maintain a Resident Agent and registered office within the state. The agent must be also be available during normal business hours to forward any service of process, notice or demand pertaining to the entity to the appropriate individuals. Basically, the resident agent is the LLC’s mailbox for legal and other important notices.
This position is necessary because it ensures that the correct people within an LLC are notified in the event of time-sensitive events such as service of process for lawsuits, garnishment notices against employees, notice of annual reports or notifications of taxes.
Who can be a Resident Agent in Maryland?
The requirements to be a Resident Agent in Maryland include:
- Being a resident of Maryland 18 years or older if an individual, a registered Maryland domestic business entity or a foreign business entity authorized to do business in the state. An entity may not be its own agent.
- Having a physical address (often referred to as a registered office or principal office) in the state of Maryland. This can be the actual address of the business, the home address of an owner, friend or family member, accountant, attorney or the address of a Resident Agent service as long as it is in the state. The office of the Resident Agent does not have to be the same as the business address, but PO Boxes and mail drop services are not acceptable. Being available to receive Service of Process on behalf of the business during normal business hours. Service of process refers to the delivery of legal documents, often a summons, subpoena or lawsuit filed against a business entity.
Can I be my own Resident Agent?
You can be your own agent, as long as you are a resident of the state, over 18 years old and are generally available during business hours.
Should you be your own Resident Agent?
Provided you live in Maryland, it’s very common to be your own resident agent. This option is fine for most businesses, however there are a few reasons to consider hiring a service to act as a resident agent.
- Privacy – When identifying a registered agent, the name and address of the agent is listed on the Articles of Organization. This person’s name and address becomes public record and is available for anybody to see. Not an ideal situation if you don’t want customers, competitors or marketers knowing this information, especially if you are doing business from home.
- Availability – A registered agent needs to generally be available at the principal address during normal business hours. This could be a challenge for a business that doesn’t need to keep consistent office hours.
- Annual Notices – Registered agent services provide reminders on the state requirements such as annual report filings. Remembering to file an annual report can be easily overlooked and the agent provides an additional layer of oversight.
- Penalties and Fees – By not continuously maintaining a current registered agent, the LLC may be responsible for penalties and fees, in addition to the potential for administrative dissolution.
How much does a Resident Agent cost?
The cost for registered agent services vary, but companies like Northwest Registered Agent and IncFile charge $100-$125. In addition to performing the state requirements, they also include limited mail forwarding, alerts when documents are received and notifications when reports, like the annual report are due with the state.
How is a Resident Agent Appointed?
A resident agent is initially appointed when forming the LLC and is appointed in the Articles of Organization.
Can I change my Resident Agent?
A Resident Agent can be changed by filing the Resolution to Change Principal Office or Resident Agent Form with the Secretary of State.