What Is the Liability of a Resident Agent for an LLC Company?

by William Pirraglia
LLCs must have a registered agent on file with the state.

LLCs must have a registered agent on file with the state.

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LLCs must have a registered agent -- sometimes called a resident agent, statutory agent or corporate agent -- that must remain in good standing. While an LLC could serve as its own registered agent, it is usually better to name a third party. As the official party named to receive legal documents -- such as notice of pending lawsuits and official state notifications -- the registered agent has important legal responsibilities and corresponding liability.

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Identity

Your LLC must submit the registered agent's name and physical address when filing its articles of organization with the state where it is being formed. You can change your resident agent by filing the proper form for your state and paying a small fee, usually around $25 to $50. In most cases, you can name your LLC's attorney or a resident agent company, if you state permits this type of business.

Responsibilities

Resident agents are the official LLC address for receiving service of process from entities that are suing your company, or for receiving documents generated by the court system for other legal actions. Your registered agent also receives official state documents, like annual tax forms and LLC renewal forms. These documents typically include important response dates that cannot be missed. Your resident agent must inform the LLC and ensure a response before these deadlines.

Liability

Missing a response date creates liability for the LLC and, be extension, its registered agent. For example, if a creditor sues your LLC to collect unpaid monies and your registered agent neglects to notify you of the action and the response date, and if this date is missed, the court may award the plaintiff -- your creditor in this example -- the full amount requested plus court costs and, possibly, punitive damages. In this example, your registered agent has incurred liability for failure to fulfill his responsibility.

Considerations

It can be dangerous to name your LLC as its own registered agent. For example, if you are on vacation, on a business trip or suffering an illness when legal or official state documents arrive, you may be unable to respond properly or may not even be aware that legal and dated documents have arrived. With no response, your LLC can incur expense, image damage, credit ruin or even non-renewal, making your company unable to operate at all. Having a registered agent who is your attorney or a registered agent company places the burden of action on them to notify you and help you respond appropriately and on time.