Last Updated on February 11, 2020
Starting a business as a corporation or LLC requires a Registered Agent in Illinois. Learn what the Registered Agent is, their job duties and the requirements to be one.
Who can be a Registered Agent in Illinois?
Starting a business as a corporation, LLC or Limited Partnership requires a registered agent in Illinois. Learn what the registered agent is, their job duties and the requirements to be one.
What is a Registered Agent?
A registered agent is an individual or company who is the central point of contact to receive important legal documents for a business.
A registered agent is required by the Illinois Secretary of State when filing for a business entity such as a corporation, Limited Liability Company and Limited Partnership. This appointment is first made in the entity formation documents (Articles of Organization, Articles of Incorporation, etc), but can be changed at any time.
Sole proprietorships and general partnerships do not need a registered agent.
Why is a Registered Agent Required in Illinois?
The requirements for an entity to have a Registered Agent are formed under Illinois Statutes 805 ILCS 180/1-35 (LLC) and 805 ILCS 5/5.05 (corporation) which states that registered entities will have and continuously maintain a registered agent.
The reason for having one makes sense. If a business is owned by a single-person, it’s easy to determine who should be notified in the event of a lawsuit. However, if a business has several owners, members or partners, it would be difficult to determine who the correct contact is. By requiring a central point of contact there is no question that time-sensitive documents are going to the right person, giving the business time to prepare a defense.
Who can be a Registered Agent in Illinois?
The requirements to be a registered agent in Illinois include:
- A resident of Illinois 18 years or older.
- Alternately, a registered business entity may also act as the registered agent.
- Have a physical address (often referred to as a registered office or principal office). This can be the actual address of the business, the home address of an owner or even the address of a friend or family member. PO Boxes are not acceptable. A private mail service or mailbox also does not fulfill the requirement.
- Be available to receive Service of Process on behalf of the business during normal business hours. Service of process refers to the delivery of legal documents, often a summons, subpoena or lawsuit filed against the business entity.
What Happens If You Don’t Have A Registered Agent?
For starters the Secretary of State won’t approve the formation of the entity without one.
Even after starting the business, a registered agent must be continuously maintained. Not having one can result in issues such as:
- Not Receiving Legal Notices – If the listed registered agent isn’t able to receive legal notices, this doesn’t mean a lawsuit can’t proceed. If a process server is unsuccessful in reaching the company’s registered agent because of a lawsuit (they’ll try a few times), the court can proceed with the case. This could result in a judgement being placed against the business without the owner(s) knowing.
- Administrative Dissolution – In Illinois, if the business doesn’t have a registered agent, the Secretary of State can dissolve the entity. This means the entity is no longer in good standing with the state and the owners have lost their liability protection.
- Penalties and Fees – By not maintaining a current registered agent, penalties and fees can be levied against the entities and in some cases the owners too.
Can I be my own Registered Agent in Illinois?
Yes! Any individual, owner, member, officer, director, etc of a business entity that meets the state requirements can be a registered agent.
Why use a Commercial Registered Agent Service?
Provided one of the members or officers live in Illinois, it’s more convenient and less expensive to act as your own agent rather than hiring a service. While this is the route most businesses take, there are a few reasons to consider hiring a service.
- Privacy – The address of the registered agent becomes public record and is available for anybody to see. This can be especially concerning if someone is doing business on the side and they don’t want their employer knowing about the business. Also, if the business is sued, the notice will be delivered to the address on file. This could mean employees, customers or even neighbors witnessing the event. There is always the remote possibility a vindictive litigant or upset customer coming to your home.
- Availability – Illinois requires the registered agent be available at the principal address during normal business hours. The biggest issue with availability is if the agent goes on vacation or is otherwise away for some period of time.
- If the Business Expands to Additional Locations – If your business will have a physical presence in multiple states (offices, warehouses, employees, etc.), a foreign entity registration will often need to be filed with the other states. A registered agent will need to be appointed with a physical address in each state.
- Annual Notices – Registered agent services provide reminders on the state requirements such as annual report filings.
How much does a Registered Agent cost?If you act as your own Registered Agent, there is no cost. Depending on the services provided, a commercial Registered Agent service typically costs between $100-$150 per year. Northwest Registered Agent’s service is $125 per year and offers several extras. Some entity formation companies like IncFile, include a Registered Agent at no cost for the first year when you register your corporation or LLC with them.
Can I change my Registered Agent?
A Registered Agent can be changed by submitting Form BCA 5.10/5.20 – Statement of Change of Registered Agent and/or Registered Office and paying a filing fee to the Secretary of State.