If you’ve formed
a company in North Carolina, you’ve seen the required field “Registered Agent” on the form, but what does this person do, and why do you need one?
Registered Agent
The Registered Agent is required under the North Carolina Corporations Act, North Carolina Limited Liability Company Act, and North Carolina Nonprofits Act for each of those types of companies for the sole purpose of being the person who accepts service on behalf of the company. What this means is that there is a person or entity in this state who can accept lawsuits on behalf of the company and make it easier for the citizens of North Carolina to be able to find and sue a company that wrongs them.
Having a required Registered Agent is actually a very common, and very good, thing for all of us. Imagine a world where companies could take your money, not perform the agreed upon service, and then you can never find them to be able to sue them. That would be terrible for all of us.
Personal Note: Lots of people have approached our firm about setting up companies that are essentially hidden and cannot be sued. There are ways to somewhat set this up, but we believe this to be immoral, unethical, and all around shady business practices.
Upon Formation
If you don’t include a registered agent, or a valid registered agent, in your Articles, the Department of the Secretary of State’s office will reject your Articles outright. In North Carolina, we’re fortunate that we have very few requirements to form a company; however, having a registered agent is one of the requirements and is as important as the company’s name.
Any Other Time
If, at any time, your registered agent cannot be reached during a lawsuit, the suing party may serve the Secretary of State’s office as an alternative to serving your registered agent. Once the Secretary of State’s office has received this service, they will try to contact the registered agent and principal office location to let the company know they’ve been sued.
Note: Even if they cannot reach the company, service has been completed and the court has jurisdiction. You only have a limited time to respond after a lawsuit is served to respond, or you’ll lose by default. This is called Default Judgment.
If the NC Secretary of State’s office cannot reach anyone at the company, they will dissolve the company, meaning you will no longer have the liability protection unless you get reinstated for a fee.
Moral of the story is that your registered agent does very little until you actually need them. If you’ve let it lapse or haven’t updated your address, you could have very serious consequences.
If you’d like to learn more about registered agents, or speak with us about becoming your registered agent, feel free to reach out to us at richard@lawplusplus.com or by calling 919-912-9640.