When forming business entities, the term “registered agent” is frequently used, and there are many registered agent services available for hire in each state. So what does a registered agent do? In California, the term generally refers to the “registered agent for service of process.” According to the California Secretary of State, the term “agent for service of process” is “an individual who resides in California, or a corporation, designated to accept service of process (court papers) if the business entity is sued.” SeeFrequently Asked Questions, Agent for Service of Process, California Secretary of State(2014). The registered agent for service of process” is that person (whether a natural person or corporation) designated by a business to act as its agent to receive process.

Every business in California, other than a sole proprietorship, is required under California law to designate an agent for service of process. For instance, corporations are required to include the initial agent for service of process in its articles of incorporation (See California Corporations Code Section 202(c)) and limited liability companies are required to designate an agent for service of process in its articles of organization (See California Corporations Code Section 17701(a)(2)). In both cases an agent for service of process is required to be reported on each statement of information that is filed for the corporation or LLC.

Who the agent for service of process is, and the name and address of the agent designated to act as the agent for service of process becomes important when business entities are the subject of a lawsuit. Generally, once a plaintiff has filed its lawsuit in a California court, documents known as the Summons and Complaint (at a minimum) must be served upon the defendant. Where the defendant is a corporation, California Code of Civil Procedure Section 416(a) generally requires the corporation’s agent for service of process be served with those documents. Similarly, pursuant to California Code of Civil Procedure Section 416.40(a), unincorporated associations, including partnerships, may be served by serving the agents for service of process.

Although entrepreneurs seldom give much thought to who should be designated as the registered agent for an entity, failing to take this designation seriously can have dire consequences. It is extremely important to ensure that whomever is designated is reliable and will take the designation seriously, because if the entity is ever sued, the designated agent is likely to be the first person to know that the entity has been sued. The agent will also likely be the only person, outside of the entity, who knows to whom legal process should be directed.

To understand the laws, rules and regulations which will enable you to make informed decisions about your company, and how best to do business in California, you need the services of an attorney uniquely qualified to give you that advice. Michael Leonard, Esq. of San Diego Corporate Law, named “Best of the Bar” for 2016 by the San Diego Business Journal, is that attorney. To schedule a consultation with Mr. Leonard to discuss any business-related matter, you can contact him by visiting San Diego Corporate Law or by telephone at (858) 483‑9200.