Commercial registered agents are certain types of registered agents who are legally designated recipients of service of process in a state. Twelve states appoint commercial and non-commercial registered agents. Similar concepts or terms are used in many other countries. Commercial Registered Agent? Want to know more about it? Continue reading our article.
What Does a Commercial Registered Agent Mean?
Each entity needs a representative, who will take care of handling official correspondence on its behalf. To avoid rejection of the application, the owner has to select and nominate a registered agent, also known as a resident agent, statutory agent, or agent for service of process (SOP), already at the stage of preparation for the launch of the new enterprise. This role can be performed by either an individual or a legal entity fulfilling the state’s standards and providing their written consent.
Many states divide them into two basic groups: commercial and noncommercial. Traditionally, a noncommercial agent caters to one or several firms, while a commercial agent is usually a spokesperson of several hundred ventures.
Under the law, a registered agent is regarded as commercial if a listing statement is submitted to the Secretary of State. This paper is intended to simplify the interaction between the company representative and the state. You should provide details such as the name and type of venture delivering the service and the address to receive the service of process.
Today, most national statutory agencies have incorporated as commercial in the States admitting this disparity.
Understanding of the Model Registered Agents Act
A meeting of the International Association of Commercial Administrators in 2004 led to the adoption of the Model Registered Agents Act (MoRAA). That was the reason for introducing some changes. In particular, the interaction of state bodies with registered agents became easier, and they were divided into two categories: commercial and noncommercial.
Overall, the status and obligations of both noncommercial and commercial representatives are the same. As an owner of an organization, you can select any of these options for your organization and get to work without violating the statute. The fundamental eligibility rules and appointment process are similar. Make sure your agent for SOP has a physical address located in the state and secure their written approval.
Notwithstanding, unlike noncommercial agents, commercial ones can more effectively communicate with the state. For example, to refresh their data in official databases or to apply for resignation. Besides, based on MoRAA, some states have simplified the rules concerning their physical signature confirming their consent to be appointed.
States and Commercial Registered Agents
Not every state currently supports the concept of commercial resident agents. Only 11 of them, including the following states, have recognized the Model Registered Agents Act governing their activities:
- South Dakota;
- North Dakota;
- Washington D.C.;
Among the states, which have refused to enact the law, there are 7 with rules similar to the MoRAA. These include the following:
Let’s take a look at how commercial agents work in states, which partially apply the MoRAA guidelines, in a little more detail.
California has in some ways inspired lawmakers to draw up the Model Registered Agents Act. As such, when an agent for SOP is an individual, one has to specify their address to appoint them. However, when a corporation functions as a registered agent, it is to submit a certificate listing indicating its class and address. Therefore, the address of such an agent cannot be duplicated when filing the formation documentation. Note that, unlike some other states, California does not allow limited partnerships, as well as LLCs, to act as registered agents.
Delaware, in turn, has a special approach. For instance, there are disparities in terms. While most of the states set the filing of a listing statement as a condition for becoming a commercial agent, an alternative factor applies here. Under Delaware law, a statutory agent is perceived to be a commercial one if they represent at least 50 firms. Of course, the MoRAA method also assumes that a commercial registered agent serves many organizations at the same time, but that distinction is quite significant.
Pennsylvania is unique because it does not demand the assignment of a particular registered agent to commence a venture. There is not even the term “commercial registered agent”. Rather than providing the name of an agent for SOP, you are to mention the physical address of the office in Pennsylvania by entering it into the official papers. Meanwhile, the state offers organizations two options. You may specify the address of the company’s office or the one of a Commercial Registered Office Provider (CROP).
Benefits of Hiring a Commercial Registered Agent
Appointment and maintenance of the active agent is an indispensable aspect of setting up a venture and a prerequisite for its normal operation. Nevertheless, selecting the right person is up to the preferences of the owner. Thus, you may want to work with a commercial statutory agent when you are interested in the following virtues:
- Facilitating the procedure for business expansion. Since most commercial registered agents serve multiple companies at the same time, they usually work in all 50 states. That way, if you decide to expand to another state, you won’t have to spend time searching for a new, faithful representative;
- The states that joined the MoRAA, require only the name of the nominated agent when submitting the documents. Their current address is already kept in the Secretary of State’s database. This prevents mistakes, which put you at risk of missing the official mail delivery. That way, you will always be aware of the status of your firm and won’t miss anything significant;
- Normally, when opening a new enterprise, the written approval of your mediator should be attached to the official formation documents. It serves as proof of their willingness to deal with state correspondence addressed to the foundation and deliver it to the owner. Nonetheless, if it is a matter of designating a commercial agent, securing their physical signature is not required. A listing statement is the proof of the registered agent’s consent to act as an agent.