A Registered Agent for a non-profit is an individual or business that accepts vital information, official documents, and correspondence from the government and other agencies on behalf of a non-profit organization, then forward that information to the non-profit to enable them to respond to it appropriately.
Note that different states have different requirements in terms of incorporating new nonprofits, however, across all 50 states and Washington D.C., one requirement is general: all nonprofits are expected to have a registered agent.
Your registered agent is tasked with receiving information concerning crucial business filings and other issues relating to your non-profit from the state and IRS. Every state mandates you to appoint a non-profit registered agent when you incorporate, and without a registered agent, your articles of incorporation will be rejected.
Most often, non-profit organizations use a member of the board of directors as a registered agent, but that isn’t the same for every non-profit organization. Note that anyone (18 or older) who is a resident of the state where the non-profit is established could function as its registered agent.
Practically, anyone with an office that is situated within the state and is willing to collect deliveries during business hours may serve. However, your registered agent is much more than a legal formality, with responsibilities that go far beyond accepting your mail.
The registered agent is the recipient of state, federal, and any legal notices. Note that these are issues and information that have to be handled without delay since they are very important and time-sensitive. Correspondence should be sent to an address that is well monitored and processed every day. Owing to that, corporations of all types—not just nonprofits—tend to use an attorney as a registered agent.
Indeed, a good number of attorneys will agree to serve as a registered agent for your non-profit in exchange for an annual fee. But you can find an attorney to be your registered agent for free if you find one who has sympathy or interest in your cause. They just have to be available during business hours to receive service of process.
Your non-profit will also be expected to keep its registered agent information in public records. Note that this is called maintaining a non-profit registered agent. If your registered agent’s information changes, a change of registered agent filing is essential to ensure you continue to get your legal documents.
Who Can Be a Registered Agent for a Nonprofit?
In the United States, anyone older than 18 years can be a registered agent for a non-profit. Most often, nonprofits choose to appoint a board member or employee as their registered agent. Although this approach may work in some cases, it can have certain disadvantages.
Appointing an individual registered agent can be more expensive than hiring a registered agent provider. Even though appointing a board member or employee seems a good deal in the short term, the risks and long-term costs are often making it discouraging.
Have it in mind that board and personnel turnover amplifies the ongoing cost of maintaining non-profit registered agents. Note that every time a registered agent is no longer able to function in that capacity, the non-profit is expected to file an update with the state.
In the United States, most states also request a fee, which averages $25 per filing. Not remembering to initiate this change heightens your non-profit’s chances of missing service of process delivery. Notably, your secretary of state or division of corporations has certain requirements that apply to Registered Agents. They are:
- If the Registered Agent is an individual, they are expected to reside in the same state where your organization conducts business.
- If the Registered Agent is a business, they are expected to be legally able to conduct business in the same state where your organization conducts business.
- The Registered Agent is expected to have a physical street address in the state (not a P.O. Box).
- Your Registered Agent is expected to be available during normal business hours to receive and sign for any correspondence.
Top Factors to Consider When Choosing a Registered Agent for a Nonprofit
Always remember that your registered agent is a vital legal outpost for your non-profit organization. To make sure you make the right choice, here are a few factors you should consider when choosing a registered agent for your non-profit.
Choose A Professional Service
A good number of people believe that the job of a registered agent is very simple. Owing to that, they are most times tempted to recruit an employee, owner, or officer to function as a registered agent. However, this is not always ideal and can more or less backfire in certain circumstances.
If, for instance, the person you recruit is away on vacation, or maybe not around to receive a notification when the state attempts delivery, you will more or less be held legally responsible for the contents anyway. If the notice involves a legal action, you may have a judgment entered against you by default even before getting wind of it.
Also, note that having a professional registered agent entails you don’t have to bother or stress about filing an update with the state each time your office location or contact information alters. With a professional service, you can be certain that you’ll receive the necessary correspondence promptly.
Forget Cost, Consider Value
Agreeably, the cost is a very vital factor, but only when you are getting the value for your money. Therefore, endeavor to go for a registered agent who can provide foolproof, prompt document delivery and well-tailored electronic notifications.
Additionally, always opt for a registered agent that fortifies you with additional compliance tools to help you maneuver the requirements of each state. For instance, your right to function within a state tends to depend on filing annual reports in a detailed fashion. Note that by missing a filing, you risk forfeiting your good standing with the secretary of state.
Therefore, a high-value registered agent service will offer you annual report reminders, state forms and filing instructions, and software to boost the confidence of your staff and management.
Choose A Nationwide Provider
Notably, registered agents are state-specific appointments. Therefore, as your organization expands into new states, you will be expected to recruit a registered agent with an address in each. Without doubts, managing a mishmash of registered agents entails additional paperwork for you and heightens the risk of renewal or other documents falling through the cracks.
However, by choosing a nationwide registered agent service, you can comply with each state’s requirement and handle all of those annual filings through a single provider. Always remember that the right registered agent will support your organization as it grows, resulting in time savings, efficiency, and peace of mind.
Evaluate Service Levels And Software
Have it in mind that a good and reliable registered agent should provide you with same-day electronic uploading of all documents with no extra or hidden fees. They will also have to provide personal courtesy notices whenever a document has been forwarded. By promptly alerting you of any activity, they provide you with enough time to respond to very important notices.
Note that when it comes to legal matters, every day is paramount, which is why mediocre service from a registered agent just won’t do. Your registered agent service should also provide reliable software that ensures quick and reliable transmission of documents in the format of your choice.
Your non-profit will ideally need a registered agent in the United States. The function of the registered agent is to collect legal documents and other official notices for your organization. If you do not assign or provide details of your organization’s Registered Agent to the secretary of state, you could face massive problems. Nonetheless, now that you understand what a registered agent should offer, you can analyze the true value to your organization.