A registered agent is the individual or business entity that receives legal documents from the state, and then forwards them to your business address. But why is this a requirement, and who should you designate as your registered agent in Delaware?
In this guide, we will break down all the details you need to know about Delaware registered agents.
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What is a Delaware Registered Agent?
One of the most common questions we receive from entrepreneurs in Delaware is why a registered agent is required to form an LLC or corporation. While it might seem like an unnecessary middle-man type of role, the registered agent fills a vital role.
The registered agent’s job is to provide a reliable way for the state to contact an official representative of your business at any time, which is especially important if your business is ever sued. If you didn’t have a registered agent, a lawsuit could progress through the courts without you even knowing about it, which is obviously far from ideal.While Delaware does not provide a recommended list of registered agent services, we reviewed the top options and compiled a list of the best Delaware registered agent services based on price and overall value.
Who Can Be a Delaware Registered Agent?
The Delaware Division of Corporations dictates that a registered agent may be either a business entity (foreign or domestic) that is authorized to do business in the state or an adult individual who is a Delaware resident. In all cases, the individual or company must have a physical address in the state to qualify as a registered agent; P.O. boxes are insufficient.
Aside from the legal requirements, an important aspect to discuss is who should be your registered agent. You have the right to declare yourself as your own registered agent, which has its pros and cons.
On the positive side, you can save some money by not paying anyone to serve as your agent, but you’ll also likely need to make your home address a matter of public record, which is not ideal. Additionally, you’ll need to be physically present at your business during all standard operating hours (9-5, M-F).
Some entrepreneurs like to have a friend or family member serve as their registered agent, but if that person doesn’t have experience in this position, they might not know what is expected of them. In addition, designating your lawyer or accountant as a registered agent can work, but these options are usually quite expensive.
Our preference is to hire a professional registered agent service, which provides a combination of convenience, affordability, and peace of mind that is unrivaled by any of these other options.
How Do Delaware Residents Get Served?
The most important part of a registered agent’s role is being served a summons.
While each trial court in Delaware has their own set of varying rules and necessary documents regarding service procedures, the general process is similar. In Delaware, for the service process to begin, the plaintiff must first submit a complaint and any necessary fees to the appropriate court.All forms can be obtained from the appropriate court along with the instructions on how to submit them, and what is required of the plaintiff after submission.
If these steps are all taken correctly, the state of Delaware will then serve a summons to the defendant’s registered agent.
How to Designate a Delaware Registered Agent
The answer to this question depends on what type of business you’re starting, but with either a corporation or an LLC, you’ll need to designate your registered agent when you form your company.
When forming a corporation in Delaware, you’ll need to designate your registered agent in your formation document. Those forming LLCs will designate their agent in article 2 of the Certificate of Formation of a Limited Liability Company document. For those forming a corporation, you’ll need to designate your registered agent in article 2 of either the Certificate of Incorporation for a Stock Corporation or the Certificate of Incorporation for a Non-Stock Corporation document, depending on your corporation type.
In designating your registered agent, you must include the business or individual’s Delaware street address, so the Delaware Secretary of State may contact the entity to accept responsibility of the registered agent position.
How Can I Change My Delaware Registered Agent?
If you would like to change your registered agent for any reason, the process is pretty simple.
Depending on whether the business entity is a corporation or an LLC, you’ll need to fill out either the Certificate of Change of Registered Agent for Corporation form or the Certificate of Amendment Changing Only the Registered Agent of Limited Liability Company form. Both forms are straightforward, single-page documents that can be printed, completed, and mailed to the Delaware Division of Corporations for filing.
The fee for changing your agent (whether for a corporation or LLC) is $50.00. Checks should be made payable to “Delaware Secretary of State”.
How Does a Delaware Registered Agent Resign?
Sometimes, a registered agent may have to resign from their position.
There is no specific form needed to resign as a registered agent in the state of Delaware. Instead, individuals or companies wishing to step down from their position must write and complete a Certificate of Resignation of Registered Agent to be sent to the Delaware Secretary of State. The document should include a cover sheet including your name, address, email, and fax/phone number. If you are appointing a successor, the fee to resign is $99.00; if you are not appointing a successor, the fee is $2.00 (as dictated by the Delaware Department of State’s Fee Schedule).
The resigning agent is required to give written notice to the business entity thirty days before filing the Certificate of Resignation.
Why Should You Hire a Professional Delaware Registered Agent Service?
Hiring a professional registered agent is basically the best of both worlds between serving as your own agent, and designating a lawyer or accountant.
The biggest benefit in our opinion is the privacy protection this allows, as you will be able to keep your personal address private. There’s also a major advantage compared to having an attorney or accountant serve as your agent, namely the fact that registered agent services are almost always much cheaper.
Another reason we like this option is that these companies specialize in providing quality registered agent service. They know exactly what’s expected of them, and there are rarely any issues to speak of.
The other major benefit of hiring a registered agent service is that most of them operate in all 50 states, so that if you ever want to expand your business into another state, you won’t need to hire an additional registered agent. Your same registered agent will be able to provide the coverage you need in your new state, while still providing the same service in Delaware. If you hired a lawyer or accountant, they would only be able to help you expand to a new state if they have another physical office in that state.
You Stay Compliant
Finally, most professional registered agents operating in Delaware offer some sort of compliance calendar. With this service, your registered agent helps you keep track of due dates for ongoing LLC maintenance requirements like annual reports, which is a valuable bonus.
The top registered agent service providers include some other appealing attributes, including access to their extensive customer support networks. Some of them include a full year of registered agent service with any business formation package, which can be a real money-saver. Another welcome attribute is that some registered agent services provide volume discounts if you require service in multiple states, or if you prepay for multiple years.
What Is the Penalty for Not Designating a Registered Agent in Delaware?
You need to have a registered agent to form your limited liability company or corporation in Delaware in the first place, but if you let your registered agent service lapse, there could be some serious consequences.
Failure to maintain a registered agent could lead to your business losing its good standing with the state of Delaware, and the state also has the right to officially dissolve your LLC if they choose to.
Another issue would be the difficulty of being served if your business is sued. If the state cannot get ahold of your registered agent, a court may decide to go ahead with the lawsuit without your knowledge, which could even lead to a judgment against you. This can happen not just if you fail to designate a registered agent, but also if your agent is not present during business hours to accept the document delivery.
As you can see, the task of designating a registered agent for your Delaware business isn’t quite as easy as just writing down your own name.
There are significant downsides to just about every option in our opinion, but we recommend hiring a professional registered agent service because that option has the fewest disadvantages. They charge affordable rates, and you never have to worry about losing your good standing, having your LLC or corporation dissolved, or having a lawsuit proceed in your absence.
If you have any further questions, you can contact the Delaware Secretary of State:
Division of Corporations
John G. Townsend Bldg.
401 Federal Street, – Suite 4
Dover, DE 19901
(302) 739-3073 (option 2)