If you’re forming a limited liability company or corporation in the state of Texas, 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 Texas?
In this guide, we will break down all the details you need to know about Texas registered agents.
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What is a Texas Registered Agent?
One of the most common questions we receive from entrepreneurs in Texas 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 Texas does not provide a recommended list of registered agent services, we reviewed the top options and compiled a list of the best Texas registered agent services based on price and overall value.Who Can Be a Texas Registered Agent?
As dictated by the Secretary of State, a Texas registered agent may be either an individual adult resident or a business entity that is registered and authorized to do business in the state. While an entity is never permitted to serve as its own registered agent, Texas does permit individuals such as owners, employees, and managers to serve if they reside within the state. In all cases, Texas registered agents are required to have a physical street address, should in-person delivery of documents be necessary at any time.
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 Texas Residents Get Served?
The most important part of a registered agent’s role is being served a summons.
In Texas, before a summons is processed the plaintiff is required to first send a demand letter attempting to settle the dispute outside of court. If no agreement is reached, the plaintiff may move forward with a lawsuit by completing a petition form and submitting it to the Clerk of the county in which the defendant’s registered office is located. Depending on the county, the plaintiff will be required to pay a filing fee of between $30 and $75.
If these steps are all taken correctly, the state of Texas will then serve a summons to the defendant’s registered agent.
How to Designate a Texas 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.
In either case, you’ll need to designate your initial registered agent when you fill out the formation documents for your business. If you are establishing an LLC, this will be done in the Certificate of Formation for a Limited Liability Company (form 205). If you’re forming a corporation, you’ll be prompted to designate your registered agent when completing the Certificate of Formation for a For-Profit Corporation (form 201). Both forms may be completed either online or submitted by mail.
For good measure, it is also best to have your new registered agent complete the Acceptance of Appointment and Consent to Serve as Registered Agent document. While it is not necessary to file this document with the Texas Secretary of State, it is advisable that you have it completed for your own record keeping in case any dispute should arise regarding the registered agent’s appointment.
How Can I Change My Texas Registered Agent?
If you would like to change your registered agent for any reason, the process is pretty simple.
The simplest and most affordable way to change your registered agent in the state of Texas is to complete the Change of Registered Agent and/or Registered Office document (form 401). It can be completed here as a PDF and then mailed to the Texas Secretary of State or you may choose to submit it online.
The fee for making the change using the Change of Registered Agent and/or Registered Office document is only $15.00. The change usually becomes effective on the same day you file the document with the Texas Secretary of State, making the switch easy and affordable.
How Does a Texas Registered Agent Resign?
Sometimes, a registered agent may have to resign from their position.
In Texas, registered agents wishing to resign are required to submit a Statement of Resignation of Registered Agent (form 402). The document may be completed here as a PDF and mailed, faxed, or submitted in-person to the Texas Secretary of State. Conveniently, the form has no filing fee.
Why Should You Hire a Professional Texas 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 Texas. 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 Texas 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 Texas?
You need to have a registered agent to form your limited liability company or corporation in Texas 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 Texas, 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 Texas 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 Texas Secretary of State:
Corporations Section
James E. Rudder Building
1019 Brazos
Austin, Texas 78701