The Vital Roles of a Statutory Agent

2007-03-08 10:33:40

( Education )



What is a Statutory Agent?

Before you can incorporate your business, you need to appoint not only your company board officers but also a person or company to serve as your statutory agent.

Also known as registered or resident agent, the statutory agent acts as the official representative of your corporation or LLC in court case appointments or other public legal matters. The statutory agent is like a shield which protects the firm's privacy and minimizes unnecessary communication.

A statutory agent can be an individual or a business entity. If an individual, he or she should preferably be a lawyer or professional registered agent. If it is a business entity, it should be a law firm or professional service company that specializes in such a function.

What are the Requirements for Appointing a Statutory Agent?

You are free to appoint anyone or any service company to serve as your firm's statutory agent. You can even appoint more than one party to be your agent. But the main qualification is that the statutory agent must be a resident of the state where you have incorporated your business. Some states allow your own business entity to act as your own statutory agent, though this is not advisable as you will risk overexposing your firm.

You need to state in your company's articles of incorporation the identity and official address of your statutory agent. The agent's address must be a street address and not just a P.O. box number. Some states require your statutory agent's signature in your incorporation documents, while other states allow your statutory agent to sign a separate agent's acceptance form.

Fees of statutory agents may vary, usually averaging several hundred dollars a year. Some agents give discounts if they are representing two or more firms.
Law firms generally charge more than commercial resident agencies.

If you need to replace your statutory agent or if he moves to another address, you still need to indicate this in your incorporation papers as an amendment.

What are the Functions of the Statutory or Resident Agent?

A statutory agent not only acts as your legal representative. He also needs to keep track of any external notifications or communications coming from the court or the government. He needs to respond on behalf of the corporation to any government inquiry or required filing for taxes or other reasons. He needs to respond to any court summons and subpoenas.

If he fails to comply with any government or court requirements, the corporation he is representing becomes doubly liable. Failure to heed any court summons due to a lawsuit will automatically allow the other party to win the case by default.


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