Every Delaware LLC must appoint and continuously maintain a Delaware Registered Agent. This is a designated agent of the LLC and can be a person or business.
Getting To Know The Delaware Registered Agent Better
A Registered Agent (RA) is a liaison between the state and the business. As such, the agent receives communication from the state, including payment reminders. More importantly, the agent is also responsible for receiving service of process on behalf of the LLC.
Service of process includes legal documents like the notice of a lawsuit, summons, and subpoenas. These documents are delivered by process servers, who need a physical address for delivery. Therefore, the agent must maintain a physical street address where legal documents can be delivered. Certified mail for the LLC from the state may also be delivered at this address.
An LLC should appoint a registered agent before filing for its Certificate of Formation. The Delaware Division of Corporations will not accept these documents unless a registered agent has been appointed. Additionally, the state requires that a Delaware LLC maintain the agent continuously so that service of process can be delivered.
Failure to continuously maintain a registered agent can have legal as well as administrative consequences. Not having an agent doesn’t mean that the LLC can’t be sued. In fact, if process servers fail to deliver documents, a lawsuit against your LLC may proceed without you even knowing about it!
So it’s important to stay with the state’s requirements and appoint a responsible agent.
Requirements And Responsibilities Of A Registered Agent In Delaware
Legal Requirements For Qualification Of An Agent
As with other states, Delaware has a few requirements that define the qualifications of an RA. These are straightforward and leave the LLC with a lot of freedom in exercising its freedom to appoint a competent RA.
- An LLC’s registered agent must have a physical address in Delaware. The state doesn’t accept PO Box addresses.
- If the agent is a person, they must have a physical address in DE and be capable of accepting legal documents.
- If a business is appointed, it must be in good standing with the state and have permission to conduct business in DE.
While the business entity as an RA could technically be any competent business, it usually represents commercial registered agents. These are businesses that offer their services as registered agents for a fee.
The requirements are reasonable and useful, rather than being some sort of red tape. That said, the LLC must look beyond the legal requirements. You want a registered agent that’s competent and can handle the responsibilities of the job.
Responsibilities Of A Registered Agent
The registered agent is an important part of the process of legal and administrative working of the LLC, the state, and the court system. As such, you want an agent who can handle the responsibilities of this role.
A registered agent isn’t necessarily a full-time employee of the LLC. Instead, their job can be limited to receiving service of process and official communication. But that too can be time-sensitive.
Ideally, you want to know as soon as possible if your business gets served legal documents or a lawsuit. Similarly, any official mail from the state or your business obligations (e.g. the Franchise Tax) should be brought to your notice immediately. Or you could receive a reminder from the agent.
At the minimum, you should expect the following services from the RA.
- Maintain a physical address. This is the registered office of the LLC, and where service of process and certified mail is delivered.
- Be available at the registered office during normal business hours (9 am to 5 pm).
- Receive service of process if/when it arrives, and inform the LLC immediately.
- Inform the LLC of any communication from the state.
Who Can Be Your Delaware LLC Registered Agent?
Now that we have an understanding of the role, requirements, and responsibilities of an RA, we can take a better look at who to pick for the role. As we know, there are plenty of options available. However, for practical purposes, most LLCs choose to go with the following options:
- You can be your own Registered Agent.
- It’s possible to appoint family members or friends.
- Hiring a commercial registered agent is possible.
The first two options are excellent in terms of monetary considerations. You can be your LLC’s registered agent for $0. Similarly, family/friends can take on this role. And yet, there’s still the option to hire a business, which many domestic LLCs take even if they could save that money.
Things get a little different if you’re setting up a foreign LLC (non-native to Delaware). In this case, it might not be possible to be your own agent, and you may not know anyone trustworthy enough to be the RA. In this case, a commercial agent becomes the most plausible choice.
Popular as Delaware is with businesses, many choose to go the route of commercial agents. And indeed, many foreign, as well as domestic LLCs, rely on quality commercial agents.
Additional Considerations Before Making An Appointment
Making the choice of appointment of a registered agent shouldn’t be a purely monetary decision. Sure, you (or family/friends) could take on that role for no expense, but it’s important not to forget the responsibilities and rigors this position requires.
There are several points to consider, but privacy and reliability are the highlights.
As we know, the agent should be available at the office during normal working hours. Seems simple enough, but it can turn out to be difficult for most regular individuals.
You might be away on a vacation, running errands, or have something else that requires you to step away from the registered office. If service of process were to arrive during these times, things could get difficult. Sure, the chances of this happening are slim, but they’re real.
Privacy forms another part of the equation. Details of the RA like name and address become part of the public record. That means they’re easily accessible to anyone who wants them or looks for them. Many people may not be comfortable with the idea of their name and address being so freely available.
If you’re unfazed by these issues or can handle them, being your own agent should be okay. For most LLCs, it’s preferable to pick a commercial option over choosing the DIY route.
Hiring A Commercial Registered Agent In Delaware
Given that Delaware is a popular destination for businesses (especially corporations but several LLCs as well) there are several companies in the state offering registered agent services. The pricing for hiring these businesses varies depending on the company and the services offered. But, most of the businesses fall in the range of $50 to $300 annually.
To pick an agent, you could do a registered agent search using the web or other means. The Delaware Division of Corporations maintains a list of registered agents in the state. Before taking the step of hiring one, the business should do its own due diligence to ensure the suitability of the agent.
At the very least, you should expect a commercial registered agent to offer the following:
- Professional Service
- Discreet Service
Best Delaware Registered Agent And Delaware Registered Agent Review
If you’re hiring an agent, it makes sense to look for the best Delaware registered agent. Of course, that is easier said than done since there are no objective parameters to declare a particular agent as the “best”.
It would perhaps be better to put focus on finding an agent that is the best for your LLC’s needs. As the needs of the companies vary, so does their choice of a registered agent. From offering value to focusing on greater services, commercial agents offer a lot of options.
Additionally, you’ll find local as well as national businesses in the mix. Both of these have their own benefits. A national company can make things easier if your LLC has a presence in multiple states. Domestic businesses may have greater flexibility and could even offer customized plans.
Whatever choice you make, it’s best to do some research and look for Delaware registered agent reviews before hiring one. Apart from checking reviews on the internet, also see if it’s possible to speak to previous or existing clients of the business.
Three very popular national services in Delaware for registered agents are:
- Northwest Registered Agent
How To Change Your DE Registered Agent
Changing an LLC’s Delaware Registered Agent requires filing the appropriate forms with the state’s Division of Corporations.
For domestic LLCs, this form is Change of Agent. The filing fee for this form/certificate is $50. Foreign LLC will need to file the Foreign Change of Agent form. This form/certificate can be filed for $50. You can submit these forms through mail, fax, or in-person. As with most forms/filings in Delaware, these forms too should be accompanied with a Cover Memo.