A registered agent is the individual or business entity that receives legal documents from the state, and then forwards them to your business address. But why is this a requirement, and who should you designate as your registered agent in Alabama?
In this guide, we will break down all the details you need to know about Alabama registered agents.
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What is an Alabama Registered Agent?
One of the most common questions we receive from entrepreneurs in Alabama is why a registered agent is required to form an LLC or corporation. While it might seem like an unnecessary middle-man type of role, the registered agent fills a vital role.
The registered agent’s job is to provide a reliable way for the state to contact an official representative of your business at any time, which is especially important if your business is ever sued. If you didn’t have a registered agent, a lawsuit could progress through the courts without you even knowing about it, which is obviously far from ideal.While Alabama does not provide a recommended list of registered agent services, we reviewed the top options and compiled a list of the best Alabama registered agent services based on price and overall value.
Who Can Be an Alabama Registered Agent?
According to the Alabama Secretary of State, the registered agent can be an individual Alabama resident or a business located in Alabama. Regardless, a physical street address is necessary ― post office boxes are not sufficient.
Aside from the legal requirements, an important aspect to discuss is who should be your registered agent. You have the right to declare yourself as your own registered agent, which has its pros and cons.
On the positive side, you can save some money by not paying anyone to serve as your agent, but you’ll also likely need to make your home address a matter of public record, which is not ideal. Additionally, you’ll need to be physically present at your business during all standard operating hours (9-5, M-F).
Some entrepreneurs like to have a friend or family member serve as their registered agent, but if that person doesn’t have experience in this position, they might not know what is expected of them. In addition, designating your lawyer or accountant as a registered agent can work, but these options are usually quite expensive.
Our preference is to hire a professional registered agent service, which provides a combination of convenience, affordability, and peace of mind that is unrivaled by any of these other options.
How Do Alabama Residents Get Served?
The most important part of a registered agent’s role is being served a summons.
In the state of Alabama, this happens when an individual or lawyer fills out a complaint and submits it to the Clerk’s Office either by mail or in person. Once the Clerk’s Office receives the original complaint and filing fee, the case is given a case number and assigned to a judge. In cases where a filing fee cannot be paid, an Affidavit of Substantial Hardship may be filed to ask the judge to delay payment.
If these steps are all taken correctly, the state of Alabama will then serve a summons to the defendant’s registered agent.
How to Designate an Alabama Registered Agent
The answer to this question depends on what type of business you’re starting, but with either a corporation or an LLC, you’ll need to designate your registered agent when you form your company.
If you’re forming an Alabama corporation, you can designate your registered agent and office when you fill out the state of Alabama’s Domestic Business Corporation Certificate of Formation which can be found at this link. For LLC formations, you’ll do this in section 3 of the state of Alabama’s Domestic Limited Liability Company (LLC) Certificate of Formation which is found here.
Regardless of if you’re filing for an LLC or corporation, you’ll need to complete the form on the computer before printing it. Then, one signed original and two copies of the completed form with all appropriate filing fees must be mailed to the Office of the Judge of Probate in the county where the corporation’s registered office is/will be.
In both cases, the applicable fee is $100, and can be paid via credit card if the county you are filing in will accept that method of payment. However, if your credit card is not authorized, the LLC or corporation will not be indexed.
How Can I Change My Alabama Registered Agent?
If you would like to change your registered agent for any reason, the process is pretty simple.
All you must do is fill out the State of Alabama’s Change of Registered Agent form with the Alabama Secretary of state. This form can be completed on the computer via this link and then printed for mailing. Once printed, two copies of the form along with a $25.00 fee must be mailed to the Alabama Secretary of State, Business Services Division, PO Box 5616, Montgomery, Alabama 36103-5616.
The fee can be paid by check, money order or credit card. If you choose to pay by credit card, you may email your filing to firstname.lastname@example.org. However, if the credit card does not authorize, your change will not be indexed and you will be charged a $30 fee.
The form requires your Alabama Entity ID Number, the name of the entity, the name of the current registered agent and that agent’s address, and the name of the new registered agent.
How Does an Alabama Registered Agent Resign?
Sometimes, a registered agent may have to resign from their position.
To do so, they’ll need to fill out the state of Alabama’s Notice of Registered Agent Resignation. This is a very simple, one-page document that indicates the registered agent’s identity and the business entity they are resigning from. It should be completed on the computer, printed, and then mailed to the Alabama Secretary of State. Email and/or fax filings will be discarded immediately; the document is accepted by postal service only. There is no filing fee for this form.
Why Should You Hire a Professional Alabama Registered Agent Service?
Hiring a professional registered agent is basically the best of both worlds between serving as your own agent, and designating a lawyer or accountant.
The biggest benefit in our opinion is the privacy protection this allows, as you will be able to keep your personal address private. There’s also a major advantage compared to having an attorney or accountant serve as your agent, namely the fact that registered agent services are almost always much cheaper.
Another reason we like this option is that these companies specialize in providing quality registered agent service. They know exactly what’s expected of them, and there are rarely any issues to speak of.
The other major benefit of hiring a registered agent service is that most of them operate in all 50 states, so that if you ever want to expand your business into another state, you won’t need to hire an additional registered agent. Your same registered agent will be able to provide the coverage you need in your new state, while still providing the same service in Alabama. If you hired a lawyer or accountant, they would only be able to help you expand to a new state if they have another physical office in that state.
You Stay Compliant
Finally, most professional registered agents operating in Alabama offer some sort of compliance calendar. With this service, your registered agent helps you keep track of due dates for ongoing LLC maintenance requirements like annual reports, which is a valuable bonus.
The top registered agent service providers include some other appealing attributes, including access to their extensive customer support networks. Some of them include a full year of registered agent service with any business formation package, which can be a real money-saver. Another welcome attribute is that some registered agent services provide volume discounts if you require service in multiple states, or if you prepay for multiple years.
What Is the Penalty for Not Designating a Registered Agent in Alabama?
You need to have a registered agent to form your limited liability company or corporation in Alabama in the first place, but if you let your registered agent service lapse, there could be some serious consequences.
Failure to maintain a registered agent could lead to your business losing its good standing with the state of Alabama, and the state also has the right to officially dissolve your LLC if they choose to.
Another issue would be the difficulty of being served if your business is sued. If the state cannot get ahold of your registered agent, a court may decide to go ahead with the lawsuit without your knowledge, which could even lead to a judgment against you. This can happen not just if you fail to designate a registered agent, but also if your agent is not present during business hours to accept the document delivery.
As you can see, the task of designating a registered agent for your Alabama business isn’t quite as easy as just writing down your own name.
There are significant downsides to just about every option in our opinion, but we recommend hiring a professional registered agent service because that option has the fewest disadvantages. They charge affordable rates, and you never have to worry about losing your good standing, having your LLC or corporation dissolved, or having a lawsuit proceed in your absence.
If you have any further questions, you can contact the Alabama Secretary of State:
John H. Merrill
Office of the Alabama Secretary of State
P.O. Box 5616
Montgomery, AL 36103-5616