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Please, I Would Like Answer

May 31, 2006, 1:55 pm

States all require that you register your corporation to do business in that state.  Most all states require that you have a registered agent in that state.  Sometimes this can be an employee, but since we are a seasonal business we have no full-time employees in many states to nominate.  This means that we have to pay an outsider a fee every year just to be this named agent.

And in my experience this person does ... NOTHING.  Zero.  Nada.  Bupkis.  But it is worse than that.  In many states like Minnesota, the secretary of state (who generally manages corporate registrations) absolutely insists that they will send no mail to your corporate headquarters, they will only send mail to your in-state registered agent.  Its like they don't have mail service or phone service that goes out of state in Minnesota.  Unfortunately, many of my agents repeatedly fail to forward this mail to me.  I just paid a $300 fine to Minnesota because I did not respond to an annual renewal notice that was sent to my local agent and never forwarded.

I have asked this question of my readers before but never gotten an answer.  My question is simple:

In this day of modern communications, what is the justification for requiring a corporation to have a registered agent in that state?

Is there any justification?  Or is this just a holdover from some past era when communication was by horse and telegraph.

Tags:
Category: Regulation
  • http://www.voluntarytrade.org Skip Oliva

    If there is a justification, it's that a physical presence is necessary within the state to ensure the local courts have personal jurisdiction. An out-of-state mailing address, such as a corporate office, may be inadequate to satisfy jurisdiction.

    On the other hand, some states use registered agent statutes to generate revenue for the local bar. In Virginia, for example, the registered agent must be either a corporate director or a member of that state's bar. Other professionals and citizens are ineligible.

  • http://politics.lel-hosting.com/ Matt

    The registered agent is the person the sherriff serves papers on when someone sues your company. His presence in the state means that local sherriffs in Minnesota don't have to drive to Arizona when some nutjob Minnesotan decides you're his new favorite deep pocket.

    Which is, at least arguably, a legitimate state interest.

  • Garble

    Since the agent works for you, and we can assume wants the revenue, can't you fire/back charge them for the fine?

  • Rob

    Fire or back charge the fine?

    Heck, I'd almost bet the gov't protects these guys from having any responsibility.

  • http://www.halfsigma.com Half Sigma

    Yes, the laws are dumb.

    In Arizona, all certain corporate filings had to be "published," which seemed like me nothing but a subsidy to the Arizona Business Gazette which no one read anyway.

    I saved money by making my articles of incorporation as short as possible!

  • Texasyankee

    Federalism, which many of us agree with, is the reason. State courts cannot compel the appearance of someone in another state and state laws cannot be enforced against people in other states. If you truly support Federalism then this is not a burden.

  • Debbie

    Yes, but what good does it actually do? Getting the agent into court is pretty useless in this case. Also delivering a subpoena to a less than responsive agent can actually hinder the delivery of the subpoena to the responsible business owner.

    A better solution may be a semi-binding subpoena. I know I cannot compel you to court since you are out of state, but as a state agency, I can suspend your right to do business in my state if you refuse to comply.

    That seems to make a lot more sense as it delivers important information to the person who is most able to repond and has the most at stake to comply.

  • Kuntal

    Isn't notary service like this too? what do they do give to you to get money in return?

  • http://noumignon.livejournal.com/ Noumenon

    I'm no lawyer but you know with the commerce clause in the Constitution there might be a lot of laws and interstate treaties that are different for business conducted across state lines. Hence the fiction of the registered agent.

  • ted

    Debbie stated "Getting the agent into court is pretty useless in this case." As stated by others, the agent subjects you to the jurisdiction of the state court. If you are sued, your agent will be served and since he is your agent, you will have been served. If you do not appear in court to contest the claim, a default judgment will be entered against you. This can then be domesticated in your state of residence and collection proceedings brought against your assets there. A much simpler procedure from the plaintiff's point of view than travelling to your state to sue you.