What is a registered agent in Delaware? What they do, how much they cost, and when to get one
A registered agent is a designated person or business that receives official government documents and legal notices on behalf of a business. Registered agents help businesses comply with legal requirements such as staying informed about lawsuits or other legal actions. The agent must have a physical address (not a PO box) in the US state where the business is registered and must be available during normal business hours to receive documents. This position facilitates communication between the government and the business, making sure the business is aware of and responds to legal matters appropriately.
Below is an overview of what businesses need to know about registered agents, including what they do, when you might need one, and how to pick one. Here’s what you should know.
What’s in this article?
- What do registered agents do?
- Who needs a registered agent?
- How do registered agents operate in Delaware?
- How to choose a registered agent
- When should you get a registered agent?
- How to change your registered agent
- How much do registered agents cost?
Registered agents accept legal documents and government correspondence on behalf of businesses, helping business owners maintain privacy by letting them keep their personal address out of public records. Registered agents must be available at their designated address during standard business hours to accept documents in person, ensuring the business does not miss important information because of unavailability. In addition to receiving documents and passing them along to the business, registered agents might take on responsibilities such as reminding the business of important filing dates (e.g. business registration renewal dates, tax filing dates).
- Legal documents: Registered agents accept service of process, which means they receive legal documents on behalf of the business in the event of a lawsuit.
- Government correspondence: Registered agents receive official government communications including tax forms, compliance documents, and notices of legal requirements or changes in laws that could affect the business.
Who needs a registered agent?
Most formally registered businesses need a registered agent to fulfil legal requirements and ensure they receive important communications. Businesses must keep their registered agent’s information up to date and inform the state promptly if their registered agent changes.
- Corporations: S corporations and C corporations must have a registered agent.
- Limited liability companies (LLCs): LLCs must have a registered agent.
- Partnerships: Many states, including Delaware and California, require limited partnerships (LPs) and limited liability partnerships (LLPs) to have a registered agent.
- Non-profits: Non-profit entities must have registered agents.
- Businesses registered in multiple US states: Businesses that operate in multiple states typically must have a registered agent in each of those states.
Delaware is popular for business registration because of its business-friendly laws and courts. About 79% of all US initial public offerings in 2022 were registered in Delaware. Registered agents function the same way in Delaware as in other states: they receive legal documents and government correspondence on behalf of the business and forward those items promptly, enabling the business to keep up with its legal obligations. Registered agents in Delaware are also required to maintain current contact information for the business, ensuring the state has a reliable way to communicate with the business. Registered agents might also assist businesses with Delaware’s annual report filing and franchise tax requirements, by reminding the business about these obligations or facilitating their completion.
How to choose a registered agent
Consider these factors to help you choose the right registered agent or service for your business:
- Requirements: Learn your state’s requirements for registered agents. In Delaware, as in many other states, the agent must have a physical address (not a PO box) and be available during normal business hours.
- Reliability: Your agent or service should have a reputation for reliability and professionalism because they will handle important legal and tax documents. Look at reviews and testimonials from other businesses or ask for recommendations from your business network, attorneys, or accountants.
- Accessibility: Your registered agent should be easily accessible and prompt in communicating with you. Timely access to legal documents is important, especially if they are time-sensitive.
- Specific experience: Your agent or service should be familiar with the needs and compliance requirements of your business type, whether it’s an LLC, corporation, non-profit, or partnership.
- Compliance: Your agent should have a good track record of keeping their clients compliant with state regulations. This includes timely forwarding of all documents and notifications of any compliance changes.
- Confidentiality: Your registered agent should have measures in place to protect the confidentiality and security of your documents.
- Services: Some registered agents offer additional services such as compliance support, annual report filing reminders, and document organisation. Determine which additional services might be beneficial for your business.
- Cost: Costs vary between agents and services. Fees are typically $100 to $200 per year in Delaware. Compare pricing, but be wary of extremely low prices that might indicate a lack of service quality or hidden fees.
- National coverage: If you plan to operate your business in multiple states, consider whether the agent or service can provide registered agent services in all the states where your business will be active.
- Switching costs: Understand the process and any fees associated with changing registered agents if you decide to switch services.
When should you get a registered agent?
These scenarios require choosing a registered agent to receive official documents:
- Starting a business: You need to choose a registered agent when registering a formal business such as a corporation or an LLC.
- Doing business in a new state: If you’re expanding your business to operate in a new state, you need to pick a registered agent in that state.
- Changing your business type: If you decide to change how your business is set up, such as going from a solo operation to an LLC, you’ll need a registered agent.
- Needing more availability: If you’re not always at your business to receive important mail during normal hours, having a registered agent can help make sure you don’t miss any important documents.
How to change your registered agent
- Select a new agent: Before making any changes to your existing agent, choose your new registered agent. Ensure the new agent agrees to the role and meets your state’s requirements, such as having a physical address in the state and being available during business hours.
- Check state procedures: Each state has its own process for changing a registered agent. Visit your state’s secretary of state website or contact their office to get the specific forms and instructions for your state.
- Fill in the required forms: You’ll usually need to complete a “Change of Registered Agent” form or similar document, providing details about your business and the information for the old and new agents.
- Submit the form: Submit the completed form and any necessary payment (some might come with fees) to the state office.
- Notify your former agent: Inform your current agent that you’re changing to a new one and that they’ll no longer receive documents for your business.
- Update your records: Once the change is official, update any business records that list your registered agent. This might include bank records, licences, or contracts.
- Confirm the change: Check with your state’s office that the change has been processed. Some states provide confirmation or a new certificate of status reflecting the change.
How much do registered agents cost?
Registered agent fees vary based on the state and whether you choose an individual or a professional service.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.
