If you’re forming a limited liability company or corporation in the state of Hawaii, you’ll need to designate a registered agent.
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 Hawaii?
In this guide, we will break down all the details you need to know about Hawaii registered agents.
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What is a Hawaii Registered Agent?
One of the most common questions we receive from entrepreneurs in Hawaii 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 Hawaii does not provide a recommended list of registered agent services, we reviewed the top options and compiled a list of the best Hawaii registered agent services based on price and overall value.Who Can Be a Hawaii Registered Agent?
As determined by the State of Hawaii Department of Commerce and Consumer Affairs, a registered agent must be either an adult individual residing in Hawaii or a business entity (either domestic or foreign) that is authorized to do business in the state. Whether a company or an individual, the registered agent is required to have a physical street address in Hawaii rather than a post office box.
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 Hawaii Residents Get Served?
The most important part of a registered agent’s role is being served a summons.
In order for a summons to be processed in the state of Hawaii, a plaintiff must first complete a complaint outlining his/her case and demands and submit it to the clerk of the Court. After submitting a complaint accompanied by any necessary fees (as dictated by the specific court), the clerk will issue a signed summons.
If these steps are all taken correctly, the state of Hawaii will then permit either the chief of police, the sheriff, the sheriff’s deputy, a specially appointed individual, or any adult who is not a party in the lawsuit serve the summons to the defendant’s registered agent.
How to Designate a Hawaii 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.
When forming an LLC, you’ll need to designate your registered agent in article III of the Articles of Organization for Limited Liability Company (form LLC-1). Alternatively, when forming a corporation, you must designate your registered agent in article III of the Articles of Incorporation. Either form can be completed and submitted by mail, or you may use the Department’s online filing system to submit them digitally.
How Can I Change My Hawaii Registered Agent?
If you would like to change your registered agent for any reason, the process is pretty simple.
The form that’s needed for a registered agent to step down from an appointment is the Statement of Change of Registered Agent by Entity document (Form X-7). It must be completed, printed, and mailed to the State of Hawaii Department of Commerce and Consumer Affairs. The fee for filing the document is only $25.00. Checks should be made payable to “Department of Commerce and Consumer Affairs”.
How Does a Hawaii Registered Agent Resign?
Sometimes, a registered agent may have to resign from their position.
To end an appointment, a registered agent must simply complete a Statement of Change of Registered Agent by Entity (form X-7). This form may be used by registered agents resigning from serving corporations and LLCs alike.
This single-page document requires the name of the LLC or corporation, the resigning agent’s name and address, the confirmation that written notice has been given to the business entity regarding the resignation, and a signature.
Why Should You Hire a Professional Hawaii 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.
Privacy
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.
Professional Service
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.
Nationwide
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 Hawaii. 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 Hawaii 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 Hawaii?
You need to have a registered agent to form your limited liability company or corporation in Hawaii 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 Hawaii, 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.
Conclusion
As you can see, the task of designating a registered agent for your Hawaii 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 Hawaii Secretary of State:
Department of Commerce and Consumer Affairs
Business Registration Division
P.O. Box 40
Honolulu, Hawaii 96810
(808) 586-2727