If you’re forming a limited liability company or corporation in the state of Maryland, 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 Maryland?
In this guide, we will break down all the details you need to know about Maryland registered agents.
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What is a Maryland Registered Agent?
One of the most common questions we receive from entrepreneurs in Maryland 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 Maryland does not provide a recommended list of registered agent services, we reviewed the top options and compiled a list of the best Maryland registered agent services based on price and overall value.Who Can Be a Maryland Registered Agent?
According to the regulations set forth by the Maryland Secretary of State, a registered agent (sometimes referred to in the state as a “resident agent”) may be either an individual resident of Maryland or an organization maintaining both a physical street address and the authorization to perform business in the state.
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 Maryland Residents Get Served?
The most important part of a registered agent’s role is being served a summons.
In Maryland, in order for a summons to be processed a plaintiff must first file a claim stating a justification and a demand. After completing the claim, the plaintiff must deliver it (along with any fees and copies of exhibits or other necessary documents) to the appropriate clerk.
If these steps are all taken correctly, the state of Maryland will then allow the summons to be served to the defendant’s registered agent either through hiring the services of a sheriff or constable, using a private process, or sending it via certified mail. In most cases, service of the summons may incur a fee.
How to Designate a Maryland 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 establishing an LLC, you’ll be prompted to designate your registered agent in the fifth article of the Articles of Organization document. For formations of a corporation, you’ll need to designate your registered agent in the fifth article of the Articles of Incorporation.
It should be noted that in some documents (such as the Articles of Incorporation for the establishment of corporations) the Maryland Secretary of State uses the term “resident agent” to refer to a registered agent. There is no difference in meaning between these two terms; they both refer to the same position involving the same duties.
How Can I Change My Maryland Registered Agent?
If you would like to change your registered agent for any reason, the process is pretty simple.
The only document you need to complete and submit is the Resolution to Change Principal Office or Resident Agent form which can be found here along with its instructions. The document is appropriate for use with all entity types (LLC and corporations included) and costs $25.00 to file. Alternatively, you may file the form online using Maryland’s Business Express website.
How Does a Maryland Registered Agent Resign?
Sometimes, a registered agent may have to resign from their position.
In Maryland, there is no official resignation form; registered agents wishing to step down from their appointment must simply draft and submit a statement of resignation to the Maryland Department of Assessments and Taxation by mail or in-person. There is no fee to resign. Afterwards, the resigning agent must provide written notice to the business entity informing the appropriate individual of the resignation.
Why Should You Hire a Professional Maryland 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 Maryland. 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 Maryland 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 Maryland?
You need to have a registered agent to form your limited liability company or corporation in Maryland 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 Maryland, 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 Maryland 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 Maryland Secretary of State:
Maryland Secretary of State
State Department of Assessments and Taxation
Charter Division
301 W. Preston Street; 8th Floor
Baltimore, MD 21201-2395