You may have heard that other states require LLCs to have registered agents and wondered if this holds in Texas. The answer is yes! According to the Texas Business Organizations Code (“BOC”), all Texas LLCs must have registered agents and offices in Texas to remain compliant. Please read on for more information on what registered agents entail.
Defining Registered Agents
When you create an LLC, you create a legal entity that the law regards as separate from its owners. That means that any legal issues arising from business should fall on the business, not you. However, this separation, also often referred to as the corporate veil, only exists when the separation is clear. And one way of cementing this separation is ensuring that the business has a registered agent.
A registered agent is simply a person or a business service that accepts correspondence from the state on behalf of the business. As much as the business is a legal entity, it cannot meet this need without external help. And that’s where this agent comes into the picture!
The Role of the Registered Agent
Generally, a registered agent handles correspondence between you and the state. But let’s delve into the agent’s role a bit further. What exactly do they do?
- They accept government correspondence on behalf of the business. The state will often send official documents to your business to maintain your business records. Most of these contain information pertinent to the LLC’s operation.
- They accept service of process for the business. Businesses have a right to due process, ensuring they do not get the short end of the stick. However, you can only protect the business when you get legal notices on time. The agent should step into this role, ensuring you do not miss out on any deadlines. Moreover, the state requires that you have someone who can acknowledge the receipt of legal documents to ensure you get them on time.
- The agent accepts and processes compliance documents. Anyone who wants to maintain an LLC in Texas must ensure they file their reports and respond to deadlines promptly. Not doing so often results in fines and penalties and can even put a business in danger of dissolution. The agent exists to process these documents and alert you of any upcoming business obligations. Based on your relationship with the agent, they may also be responsible for filing such reports on your behalf.
An agent’s work revolves around ensuring a business remains compliant by processing important documents on time. As such, you must ensure that the person or company tasked with this obligation can handle it efficiently. The state allows you to take up this role or delegate it to another individual or company. Your choice should come down to who can best protect your LLC’s interests.
What Happens When You Don’t Hire a Registered Agent?
You may feel like starting your business without a registered agent and onboarding one once you start operating the company. However, that is not acceptable under Texas law. Per the Texas Business Organizations Code (“BOC”), you must have a registered agent to start an LLC. So, not only will you not have the chance to file the LLC creation paperwork nor be compliant in the eyes of the law. You cannot run a Texas LLC without a registered agent. Please keep this in mind as you run your business. If you are unsatisfied with your agent, the only way out is to hire another agent – it’s not a position you can leave unfilled. Doing so can result in fines, penalties, or worse!