Why Your Company Needs a Registered Agent
Too often when a person or their accountant form a new business, some of the legal issues are ignored. In particular, the need for a independent, unaffiliated registered agent (or "RA") is too often overlooked!
If you serve as your own registered agent, you may save some money, but you put your business at risk!
If you serve as your own RA, you may save some money, but you put your business at risk. You risk having a summons being served without your knowledge and a critical deadline may pass before the summons reaches the appropriate party. Without an independent, affiliated registered agent, a summons is generally permitted to be served on any (adult) person at your principle place of business - and you have no assurance that the summons may wind up sitting in someone's inbox for days. Worse yet, you may suffer the embarrassment of having a summons served at your home, since some jurisdictions permit a summons to be served on any adult at the home of any officer of a company. Additionally, the RA typically receives the annual report or corporate franchise tax return for your company. So, an RA should not only handle and notify you when your company is served with a notice of a legal proceeding, but should also be familiar with and understand how to comply with the statutory requirements and recommended corporate formalities that may apply in your state.
In contrast, having a law firm serve as your independent, unaffiliated registered agent can eliminate these risks With a law firm serving as the RA for your business, you will have the peace of mind that the service of any legal proceedings taken against your company will be addressed promptly and professionally. Most law firms charge a flat fee to serve as a corporation's or LLC's RA, and you can have your law firm can serve in the dual capacity as your company's RA and your business lawyers. Your company will benefit from having timely notice of a summons and immediate access to legal counsel about the proceedings involving your company. As your business lawyers, your RA will be able to to review and assess the summons and the merits of the lawsuit and provide you with legal advice on how to answer the summons. Finally, having a law firm involved should help you protect your business by maintaining your company's limited liability, corporate shield and its separate legal identity.
A company (whether operating as a corporation, limited liability company or other corporate entity) must comply with the statutory requirements regulating the company, including, but not limited to filing an annual report and/or corporate franchise tax return. However, you should also address any recommended corporate formalities (which are certain legal principles generally recognized in your jurisdiction) that may help a business maintain its corporate shield and separate legal identity for liability and tax purposes. One such important - but often overlooked - corporate formality is the creation and maintenance of corporate minutes (or "resolutions") for the annual (and special) meetings of a company's governing board and stakeholders (i.e. shareholders or members). When you your company's RA is also your business lawyers, your RA will have the knowledge and experience to address the statutory compliance requirements and recommended corporate formalities. When serving in these two capacities, most law firms will charge a flat annual fee to prepare a corporate minute book for your company and ensure that the recommended annual corporate minutes are completed and maintained in your corporate minute book.
For these reasons, we recommend you have a law firm serve as the registered agent for your business.
At Griffith & Jacobson, LLC, our business lawyers can help you maximize your business' profitability by finding effective, affordable solutions for all your legal issues. For a free, initial consultation with one of our business lawyers, go to http://www.gjlaw.com/CM/Custom/Contact.aspor call us at (312)-236-8110 or visit our website at http://www.gjlaw.com
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Griffith & Jacobson, LLC - Chicago's Business Lawyers.
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