The person or corporate entity that receives tax and legal paperwork on behalf of a nonprofit organisation is known as the registered agent. In certain areas, a registered agent is also known as a resident agent or statutory agent.
When you start a 501c3, most states require that you have a registered agent. If they match the state’s qualifications, the agent may be a professional service, oneself, or a coworker.
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What Exactly Is a Registered Agent?
A registered agent is a professional who will represent your company to the state while you run your firm. Registered agents are sometimes known as resident agents, statutory agents, or service of process agents in certain jurisdictions.
Typically, your registered agent will receive mail on your behalf, such as compliance information and tax notices. Registered agents are also in charge of receiving process paperwork. This simply implies that your registered agent will receive court summons and paperwork on your nonprofit’s behalf if it is sued.
The following are the criteria for registered agents in the majority of states:
They might be either native or international persons or businesses.
Individuals must be at least 18 years old and residents.
To function in the state of formation, business entities must be registered.
They must have a physical address (not merely a P.O. box) in the forming state.
During normal business hours, they must always be accessible at the specified physical location.
Is it Possible for Me to Be My Own Registered Agent?
As long as they complete the qualifications outlined above, anybody may act as your nonprofit’s registered agent. You may choose to be your nonprofit’s registered agent, or you can designate a member of your board of directors or a trustworthy friend.
If you decide to serve as your organization’s registered agent, you must grasp the significance of this role. If you miss a filing date or misplace a document, your nonprofit’s compliance status may be jeopardised, and the state may revoke your nonprofit’s corporate registration.
Many organisations and other companies engage a professional registered agent service to guarantee that their company is always in compliance.
Should My Nonprofit Hire a Registered Agent?
Before you use a registered agent service, think about the benefits and drawbacks of this technique.
Advantages
There are various reasons why you should consider employing a registered agent service for your nonprofit organisation. This strategy, in particular, can:
Save Time: When you initially establish your charity, you must concentrate on doing everything possible to ensure its success. Hiring a competent registered agent service allows you to concentrate on what matters most while the registered agent handles all incoming mail and official notifications. Furthermore, they will often remind you of approaching key files or deadlines.
Protect Your Personal Privacy and the Reputation of Your Company: Unfortunately, your company may face a lawsuit at some point. All service of process notifications will be sent to a business address if you engage a professional registered agent service. If you operate as your own registered agent, law enforcement officers may deliver these notifications to your home or place of business, depending on the address on file.
Registered agent services are used to receiving and correctly processing legal documentation, in addition to preserving your privacy and the reputation of your firm. This will assist to guarantee that your company does not lose a lawsuit on a technicality because you failed to submit anything on time or handled something incorrectly due to a lack of understanding of how the legal system operates.
Ensure Prompt Handling of Your Business Mail: Because a registered agent service’s major duty is to act as a registered agent for a variety of companies, you can be certain that any mail they receive will be addressed immediately. They will also be accessible during regular business hours to address any queries you may have concerning these papers.
Maintain Your Nonprofit’s Compliance: You must guarantee that your organisation continues in compliance with the state and federal government’s standards (assuming you successfully file for 501(c)(3) registration). Hiring a registered agent service can assist you avoid missing any filings.
Provide Convenience: During business hours, registered agents must be present at their specified address. That is, using a registered agent service will enable you to take time off as required and work on a flexible schedule if wanted.
Provide National Serve: If you believe your organisation may desire to expand nationally, choose a national registered agent service that will continue to support you as your firm expands.
Disadvantages
The sole downside of using a registered agent service is that it is expensive, while you may serve as your own registered agent for free.
Is a Professional Registered Agent Service Required?
While employing a professional registered agent service is a good idea for many reasons, in other cases it is required. If you answered “yes” to any of the following questions, your organisation should use a registered agent service.
Is your non-profit open at odd hours? As previously stated, your nonprofit’s registered agent must be accessible during normal business hours at their provided location. If your organisation operates outside of typical business hours, you’ll need to engage a registered agent service.
Do you reside in another state? The registered agent of your nonprofit must be a resident of the state in which it is established. If you are not a resident of the state in which you are organising your nonprofit, you must employ a registered agent in that state to represent your organisation.
Is your charity now or will it be situated in many states? If your organisation now operates in many states or intends to do so in the future, you must select a registered agent in each state where it will do so. You must employ a registered agent service since you cannot be in two locations at the same time.
Will you continue to function without a physical address? If you want to run your charity entirely online or without a physical location, you will lack a business address to provide on your formation paperwork and other crucial legal documents. By using a registered agent service, you may provide their actual address on all papers.
What Should I Look for in a Registered Agent?
When you submit your nonprofit’s formation documentation, you must choose a registered agent. Articles of Incorporation, Certificate of Formation, or Certificate of Incorporation are common names for these documents.
Choosing a Registered Agent
Most states allow NGOs to file online, and many additionally provide hard copy formation forms for filing by mail or in person. You must provide the name, physical address, and postal address of your nonprofit’s registered agent (if applicable). In certain jurisdictions, your original registered agent must additionally agree to their appointment by signing the formation paperwork or filing a separate consent document.
How Do I Change the Registered Agent of My Nonprofit?
You may usually alter your registered agent online, via letter, or in person, just as you can nominate your first registered agent. Most states require firms to complete a declaration of change form.
Your new registered agent may also be required to sign a statement of change paperwork to confirm their appointment.
Conclusion
When you work at a charity, you have more essential things to worry about than monitoring the mail, submitting legal paperwork, and remembering compliance deadlines. A registered agent can help you with that. When you engage a professional registered agent service, you can put these responsibilities in their skilled hands and completely concentrate on what is most important to your firm.