Beware the Ides of March: Effects of Losing Your Registered Agent
Posted by Gennine Cooper
March 27, 2019
The Ides of March was not always associated with an omen of death like we see in William Shakespeare’s Julius Caesar. “Ides” is a word for the middle of the month and historically lines up with dates in which bills became due. Although modern times have shifted in regards to due dates of different bills, not paying bills still have their consequences. An example today would be the due dates for Delaware Franchise Taxes. Not paying the tax in a timely fashion can result in a bad standing status, penalties, and the possibility of the entity going void. Similar ramifications happen when failing to maintain a relationship with your registered agent.
All entity types are required to have a registered agent on file if they do not have a physical presence in the state in which they conduct business. This requirement surfaces from a need for a physical location in order to serve service of process and deliver correspondence from the state and government including tax notices and IRS documents. As a company, keeping up with the requirements of the state is just as important as maintaining a working relationship with your registered agent company. If payments or communication ceases with your registered agent, they can take action to remove their name from your entity leaving your company at risk. Here are some ways in which your company could be at risk by not maintaining a registered agent.
Who’s In Your Ranks?
Not keeping your registered agent up-to-date with some of your company’s changes can negatively impact the future of your company. For example, if your growing office needs to change location, you need to notify your registered agent as soon as possible, so you are sure to receive state government mail, SOP, tax notices, etc.to your new address. Additionally, if there is a change in contact person, we also need to be made aware of that transition. Being able to deliver important documents quickly is a priority.
Don’t Lose Your Forum
If your company does not receive information about annual report notices, tax notices, license renewals, etc. because the registered agent does not have accurate contact information, due dates can be missed which ultimately could land your company a bad standing status. Bad standing statuses can prevent you from qualifying in other states, opening bank accounts, and even bringing a lawsuit in the state. It is imperative that your company be in a good standing status to ensure swift and accurate actions can be made.
Don’t Let Caesar Rule Your Empire
In many states, after so many reports/renewals/taxes have gone unpaid/unfiled, the state will take action to dissolve your company rendering it unable to legally operate. If the state forces your company into an “administrative dissolution/administrative revocation,” you can lose your limited liability protection and become personally responsible to creditors. Additionally, some states can give your company’s name away because it is not considered an active company anymore. Staying away from administrative dissolution is a top priority.
Don’t Battle the Tax Collector
Once your company falls out of compliance, you will be responsible for paying penalties, fines, and possibly having to fill out documentation to reinstate your company. Furthermore, some states will still leave you financially responsible for taxes on the entity because the company was not properly shut down.
Veni, Vidi, Vici!
Naturally, all of these risks can be avoided by keeping your relationship with your registered agent company healthy and thriving. Incorporating Services, Ltd. sends out an Entity Contact Update Form with our annual renewal bill each year so that clients can inform us of any internal changes that may affect the company receiving notices in a timely fashion. As always, we are also available by email, phone, and live chat five days a week. You can also visit our website for additional information and assistance to keep your company in compliance. With help from Incorporating Services, Ltd. (or your registered agent), having to “Beware the Ides of March,” or any month, will be a thing of the past.
Amanda Archambault, Registered Agent Associate