Avoiding the Registered Agent Trap (Part 3): Keeping Things Current

[This is a continuation of Avoiding the Registered Agent Trap (Part 2): How Can I Be My Own Registered Agent?]

As your company evolves, the business address you’ve provided for your registered agent may change or the employee or officer who was once your registered agent may leave the company.  Cal. Corp. Code § 1502(e), § 1504, and § 17701.13(c), require that you promptly update the registered agent’s address in these circumstances or designate a new registered agent if the previous registered agent is no longer willing or able to act as such for your company.  In order to do so, you can just file a new Statement of Information for your company as explained in my previous post, Avoiding the Registered Agent Trap (Part 2): How Can I Be My Own Registered Agent?

‍ ‍It is critical that your company keep its registered agent information up-to-date.  A company’s failure to update its registered agent can cause it to miss service of process for a lawsuit or other critical communications.  Missing service of process, which is the typical result of maintaining out-of-date information for a registered agent with the California Secretary of State, can result in a scenario in which a lawsuit is properly served on the publicly designated registered agent only for the paperwork to disappear into a black hole.  The company may only discover much later that it has been sued after a default judgment has been rendered against it.  Running a new business is hard enough!  You don’t want to have to face a million-dollar default judgment because your company failed to keep its registered agent information up-to-date.

In sum, most small businesses and startups can save money and avoid the “registered agent trap” if the founder simply designates themselves as the registered agent for the business, provided  they reside in California.  The process is simple and can be accomplished online through the California Secretary of State’s website.  Just be sure to keep the new registered agent’s information up-to-date.  Also, once you’ve properly filed a Statement of Information online appointing yourself (or a trusted third party) as the registered agent for your California business, don’t forget to cancel the service of the previous registered agent if you are no longer using it.  Then you can truly start to enjoy the cost savings.

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