Looking to start a business in the Lone Star State and can’t figure out why you need a Texas registered agent? Nothing to worry about, you’re not the only one who’s a bit confused about this. Signing up with a registered agent is one of the first steps you need to take as you begin your business journey.
Legal compliance is very important for businesses and since your registered agent will be handling that for you, you must take a moment to understand the roles and responsibilities of these professionals. Consider this necessary due diligence before embarking on a fulfilling and lucrative business journey.
What Is a Texas Registered Agent?
A Texas registered agent is an individual or company that serves as the designated contact for your business in Texas. They’ll be the contact for the service of process and official notices. The registered agent can also receive official and legal documents meant for your business. This may include tax documents, lawsuits, summons from court, compliance notices, and more.
Think of the registered agent as a liaison between your company and the Secretary of State as well as other legal and regulatory bodies. They receive all processes and documentation on behalf of the company and forward them to you for necessary action.
What Is a Registered Office in Texas?
Registered agents are required to have a physical place of business. This is called a registered office. It’s the location where registered agents can accept legal documents and official mail on behalf of your business. The registered office also fulfills the nexus for determining the legal jurisdiction.
What Are the Legal Duties of a Texas Registered Agent?
There are several legal duties that a registered agent must perform, chief among them is ensuring that the business entity remains compliant and makes its annual filings with the relevant state bodies. This is in addition to protecting your privacy as a business owner. The other main duties of a Texas registered agent include:
- Acting as the official liaison between the business and the Secretary of State
- Facilitating correspondence between the business and regulatory authorities
- Receiving and forwarding legal and tax documents
- Assisting with compliance matters
- Protecting the privacy of business owners
Why Is a Registered Agent Required in Texas?
According to Texas’ Business Organizations Code Title 1 Sec. 5.201, businesses are required to designate and continuously maintain a registered agent on whom any process, notice, or demand required can be served. This is to ensure that the business entities operating in the state, such as a Texas LLC, have an official and reliable point of contact with the state.
Does Texas Require Registered Agent Consents?
Texas requires explicit consent when designating someone as the registered agent for an entity like a limited liability company (LLC). The individual or organization designated for this purpose must have consented to continue to serve in that capacity. Texas imposes penalties if you designate someone as the registered agent without their consent.
The requirement to obtain consent has been kept to ensure that the registered agent is cognizant of their duties and responsibilities so that they may carry them out effectively.
When Do You Need a Texas Registered Agent?
There are several instances where you’ll require a registered agent in Texas. It goes beyond their basic function of liaising with authorities on your behalf and receiving important legal documents. Some of these instances include:
- Business formation: You’ll need to designate a registered agent when registering a business structure such as an LLC or a corporation in Texas.
- Foreign qualification: If you want to expand your business that’s registered in another state to Texas, you’ll need to designate a registered agent in the Lone Star State before operations commence.
- Annual regulatory filings: Business entities are required to file their annual reports and other documents. A registered agent will ensure that those filings are done timely.
- Change of address: When the address of an entity is changed, it must be updated accordingly by the registered agent to ensure the timely delivery of important communications.
- Service of process: The service of process is carried out by the registered agent. This includes lawsuits, court summons, and other documents served on the entity.
- Compliance: As part of its services, the registered agent makes sure that all documentation necessary for the business to remain compliant is forwarded. This can include administrative correspondence, legal and regulatory documents, and more.
Who Can Be a Registered Agent in Texas?
The State of Texas has defined who can or can’t be designated as a registered agent. The classifications are quite simple. An individual registered agent can be a person who is a resident of Texas, is at least 18 years old, and is a citizen of the United States. A business entity can also act as a registered agent if it’s authorized to conduct business in Texas.
An entity can’t be its own registered agent. It must designate someone else to carry this responsibility on its behalf. Furthermore, there may also be some restrictions on certain office holders of an entity, such as its directors, from serving as the registered agent.
How to Choose a Registered Agent Service in Texas?
Registered agent service providers are a dime a dozen. If you follow these simple tips, you’ll be able to choose the right Texas registered agent who will go the distance with you.
All the service providers will have different pricing structures. You should take quotes from a few providers and compare them to find out where you can get the best deal. Make sure to be clear if their charges are one-time or recurring. Be mindful of any additional fees charged for extra services, you wouldn’t want to end up having to spend more money than you need to.
The registered agent should make it easier for you to carry out compliance tasks. At the very least, the one you choose should offer an online account where you can easily view all the documents. Some may offer additional services such as mail forwarding, online entity formations, virtual offices, etc.
Look up the reviews of the agent you’ve chosen online. See what others are saying about their services and if there are any issues or complaints that they’re consistently ignoring. This will help you understand what their reputation is and if you should consider working with them. A service provider with great feedback will be your best bet.
What Happens if You Don’t Have a Texas Registered Agent?
It’s not recommended to conduct business in Texas without a registered agent as you’d be opening up the business to considerable liability. This will also lead to other challenges, including but not limited to:
- Default judgments: If there’s a lawsuit against your entity and you don’t respond to the legal notice because there was no registered agent to receive it on your behalf, this may result in a default judgment against your business, where the court will rule in favor of the other party without providing an opportunity to make your case.
- Non-compliance: Not complying with state regulations regarding the designation of a registered agent could make your business liable to penalties and fines. There may also be additional consequences depending on the severity of the action against you.
- Reputation hit: It would be a major hit to the reputation of your business if it’s found to be conducting business in the absence of a registered agent. A company that willingly skirts rules and regulations doesn’t tend to win any favors in the eyes of the public or the regulators.
You can avoid all these problems and prevent any decline in your reputation by ensuring that a registered agent is designated well in advance.
How to Change Registered Agents in Texas?
You’re never stuck with the same registered agent. You can switch the agent at any time. Just be sure to follow the right process so that you don’t run into any problems later on.
- Once you’ve picked the new agent, pay their fees so that they’ll consent to serve as the agent for your business. Then complete and sign any documents they need to formalize the arrangement.
- You’ll need to notify the state about the change of registered agent. Complete and file the Change of Registered Agent form with the Texas Secretary of State. This is one of the most important steps of this entire process.
- Pay the required fee, currently $15, to the state for the process to be initiated. It usually takes around 3-5 days to be completed.
- Update the internal documentation for your business to reflect the change of registered agent. Make sure you keep a copy of all the filings for your records.
A Trusted Registered Agent Will Make Your Life Easier
Running a business is stressful enough, you don’t need the added pressure of staying on top of these matters as well. That’s why a trusted registered agent can make your life so much easier.
While a registered agent will handle all the paperwork and compliance, doola will manage your books and taxes so that you focus on growing the business.
How long does a Texas Registered Agent’s appointment last?
The appointment of a registered agent in Texas lasts for as long as you want. You always have the option to change the agent whenever you desire. The appointment also ends if your agent decides to revoke their consent.
Can you appoint an out-of-state Registered Agent for your Texas business?
Business entities are required to continuously have a registered agent in Texas, one that has a physical street address located in the state, so an out-of-state agent can’t be utilized for your Texas business.
How much does it cost to hire a professional Registered Agent in Texas?
All the service providers have different pricing structures for their registered agent services, but you can expect to pay anything from a few hundred dollars or more for a professional registered agent in Texas.
Are Texas Registered Agents responsible for any fees or taxes?
Texas registered agents are only responsible for the paperwork aspect, they won’t pay any fees or taxes on behalf of your business directly, so that’s something that you’ll have to be mindful of yourself.
Is a Registered Agent’s address public?
The registered agent’s address is always a part of the public record, which means that it can be accessed by anyone who wants to look at it. It’s not possible to have a private registered agent’s address since that would defeat the purpose entirely.