Selecting a registered agent is part of setting up a business in Delaware. For those interested in establishing a corporation, Inc., or a limited liability company, LLC, in The First State, it’s a requirement.
What is a registered agent? A registered agent serves as a connection between a company’s owner and the state. To help with business planning, we’ll provide a deeper explanation of a registered agent, answer frequently asked questions on the topic, and provide a list of registered agent services that are available in the state.
How is an LLC formed in Delaware?
To understand what a registered agent is, we must first explore how an LLC is set up in Delaware. Here’s what the process looks like and where a registered agent fits in.
1. Select a company name
Every LLC or corporation needs a name, which must be unique. No two businesses in Delaware can have the same name. The name must include the words “limited liability company” or LLC, and can’t include any government references like FBI.
2. Select a registered agent
Selecting a registered agent is the second step of forming an LLC. Think of the registered agent as the point of contact between the Delaware Division of Corporations (state of Delaware) and your company. Important paperwork (such as legal notices and tax notices) will be sent to the registered agent.
The person, agency, or business entity that’s selected as the LLC’s registered agent must be specified on the LLC formation papers known as the Certification of Formation.
3. File paperwork with the state
Forming a Delaware LLC and naming a registered agent can all be done online. Once the paperwork is completed, it’s submitted to the state for approval.
4. Pay to file the paperwork
Creating an LLC in Delaware isn’t free. There are state fees that apply, specifically to file the paperwork. Expect to pay a $90 filing fee. Plus, the LLC owner will be responsible for paying an annual LLC tax of $300.
That’s it. Once you’ve filed the paperwork, paid the fees, and been approved by the state, you’ve formed an LLC in Delaware.
While these simple steps are all that’s required by the state, there are several additional tasks most entrepreneurs do at this time.
5. Create an LLC operating agreement
Creating an operating agreement isn’t required by Delaware state law to form an LLC, however, it’s a helpful document for a company to have. The operating agreement, as the name suggests, explains how the company will operate and details things like who’s in charge, who are the shareholders, and how the profits (or losses) are distributed.
6. Get an EIN
While forming an LLC, it’s a good idea to get an EIN or an employer identification number. You’ll need this number before moving forward with other business-related tasks like filing taxes, hiring employees, and opening a bank account.
Obtaining an EIN can be done in a few minutes through the IRS website.
What is a Delaware registered agent?
A Delaware registered agent serves as a company’s primary point of contact for the state. The registered agent accepts formal documentation on the company’s behalf, like tax notifications, reminders to submit your annual franchise tax report, other annual reports, or legal documents like service of processes, which are papers filed during a lawsuit.
Do I really need a registered agent in Delaware?
Yes. Delaware law and bylaws require a registered agent to be assigned to every LLC formation.
If you don’t select a registered agent and file it with the state, a company won’t be considered in “good standing” with the state, which can result in penalties and fines.
Can I be my own registered agent in Delaware?
Yes. A business owner can serve as their own registered agent in Delaware, as long as he or she is 18-years-old and available at a Delaware address during regular business hours.
Who can be a registered agent in Delaware?
As mentioned, an owner can be a registered agent, but there are other options.
Entrepreneurs can also select another person from the company or a trusted friend or business entity for this role, but the state of Delaware has a few requirements. This person must:
- Be 18 years old or older
- Have a physical street address in Delaware
- Be available to receive documents during normal business hours on your behalf
A company can also work with a registered agent service. These services are set up to be the point-person for several companies, which could include yours.
Why would a company choose to work with a registered agent service?
Many entrepreneurs are their own registered agents, but there are some benefits to working with a Delaware registered agent. Here’s why people opt for a service company:
- Convenience. Entrepreneurs are busy people. Working with a service company provides ease of operation.
- Multi-state company. Entrepreneurs with multiple companies in multiple states may need an agent service to be their point-person to ensure pieces of mail aren’t missed.
- Privacy. A service provides a layer of privacy for owners. If a company is sued, for example, the papers are served to the registered office address (also the address on public record), not the owner or actual business address. While the service will reach out discreetly to the owner about the documentation, the papers aren’t served to an owner in front of their employees or customers.
How much does a registered agent service cost in Delaware?
The cost of one of the best registered agent services in the state ranges between $60-300 per year.
Many of the services offer add-ons as well. For example, entrepreneurs can take advantage of a business formation service, which provides assistance filing the paperwork to create an LLC.
How does an owner select a registered agent in Delaware?
A registered agent must be selected when a business is formed in the state, but how do you declare a registered agent?
When an entrepreneur is filling out the paperwork to form an LLC, there is a form called a Certificate of Formation. This document will ask you to declare the company’s registered agent. If the registered agent is a friend or a service, a signature is required on the paperwork so everyone acknowledges their role.
List of Delaware registered agent services
Delaware has many registered agent services available. Entrepreneurs can run a quick Google search for available services or find a full list of agencies on the state of Delaware’s website. To help expedite the selection process, here are several of the best Delaware registered agent services:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, the agent fee is $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services and other incorporation services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online account/dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
As you likely noticed, many of the registered agent services offer additional services or features that business owners can benefit from. While conducting research, the ability to access additional services should weigh into your decision.
Can a company change its registered agent?
Yes. It’s possible to change a registered agent at any time. In Delaware, companies make the change through the Delaware Secretary of State website. In addition to filing new contact information, a signature is also required.
There is a $50 fee to file this change of agent.
It’s important to note that Delaware businesses not in good standing with the Delaware Division of Corporations cannot make this change.
What’s a statutory agent?
Entrepreneurs may have come across the term “statutory agent” during their research. A statutory agent is the same as a registered agent. The name changes by state. A registered agent is also referred to as a resident agent or a service of process agent.
What’s a commercial registered agent?
When a Delaware corporation or LLC is formed and a registered agent is selected, the company owner might be asked if the agent is commercial or non-commercial. A commercial agent is any registered agent service. A non-commercial agent is any one person, be it the owner, a friend, or a coworker, who serves as the agent.