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Forming an LLC in Texas requires having a Registered Agent. Find out what a Registered Agent is, what they do and who can be one.
Before forming a Limited Liability Company (LLC), a Registered Agent has to be identified in Texas. Learn who the registered agent is, their job duties and the requirements to be one.
What is a Registered Agent?
A registered agent 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 registered agent are found in Texas Statutes Section 5.200 of the Business Organizations Code. These say LLCs will have and continuously maintain a registered agent and registered office within the state. The agent must be available during normal business hours to accept any service of process, notice or demand pertaining to the entity and forward it to the appropriate individuals. Basically, the registered 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 Registered Agent in Texas?
A registered agent in Texas can be any resident of the state who is 18 years or older, a registered Texas domestic business entity or a foreign business entity authorized to do business in the state. An entity cannot designate itself as its own registered agent.
The registered agent needs to have a physical address (often referred to as a registered office or principal office) in the state of Texas. This can be your home address, the address of an accountant or attorney, the address of the business, or a registered agent service. Basically, any physical address in the state may be used with the exception of PO Boxes and mail drop services are not acceptable, since someone has to be available to sign and accept documents.
The agent will also need to be 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 Registered 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 Registered Agent?
Provided you live in Texas, it’s very common to be your own registered agent. This option is fine for most businesses, however there are a few reasons to consider hiring a service to act as a registered 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 Registered Agent Service cost?
The cost for registered agent services vary, but companies like ZenBusiness include it in their low-cost LLC formation packages. 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 Registered Agent Appointed?
A registered agent is initially appointed when forming the LLC and is appointed in the Articles of Organization
Can a Registered Agent be changed?
A registered agent can be changed by filing the Change of Registered Agent/Office (Form 401) with the Secretary of State.