Is a Massachusetts Resident Agent Required?
A Massachusetts resident agent (called a registered agent in many states), is an individual or company that has a physical address in Massachusetts and is willing to accept legal documents on behalf of a business. Declaring a resident agent is legally required under Massachusetts Statutes Chapter 156C, Section 5 (Limited Liability Company) and Chapter 156B, Section 49 (corporation).
Here we will go over who the resident agent is, their job duties, the requirements to be one, and more.
Resident Agent Overview
A resident agent is a person or company that is designated to be the official point of contact between the government and your business entity.
A resident agent is required by the Massachusetts Secretary of the Commonwealth when forming a Massachusetts LLC, LP, LLP, or corporation. Â This appointment is first made in the entity formation documents, but it can be changed at any time.
Not only is a resident agent required, but if you don’t constantly maintain a resident agent, your business may face penalties. A few of these include:
- Not Receiving Legal Notices – If the listed resident agent cannot receive legal notices, this lawsuit will still proceed. If a process server is unsuccessful in reaching the company’s Resident Agent, the court can proceed with the case. This could result in a judgment being placed against the business without the owners knowing.
- Penalties and Fees – By not maintaining a current resident agent, penalties and state fees can be levied against the entity and, in some cases, the owners too. Once an entity is no longer in good standing with the state, the business owners may lose their liability protection and are at risk personally.
- Entity Closure – Waiting too long to remedy the lack of a resident agent may result in the administrative closure or dissolving the entity.
Common Questions About Massachusetts Resident Agents
Is a resident agent required in Massachusetts?
The requirements to have a resident agent are found under Massachusetts Statutes Chapter 156C, Section 5 (LLC) and Chapter 156B, Section 49 (corporation).
These requirements say that registered entities will have and will continuously maintain a resident agent and registered office within the state of Massachusetts. Â The state law also notes that the agent must also be available during normal business hours to forward any service of process, legal notice, notice, or demand pertaining to the entity to the appropriate individuals in the company.
What is required of a resident agent in Massachusetts?
The primary responsibility of a Massachusetts resident agent is to accept important legal notices and tax documents and then forward them to the appropriate person in the business.
The reason for having one makes sense. If a business is owned by one individual, it’s easy to determine who should be notified in the event of an annual report renewal, lawsuit, or tax notice. However, if a business has several owners, members, or partners, it could 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 in a timely manner.
How do you appoint someone as the resident agent in Massachusetts?
This appointment of a resident agent is first made in the entity formation documents, Certificate of Organization (LLC) or Articles of Incorporation (corporation) but can be revised later by submitting the Statement of Change of Resident Agent / Registered Office
Who can be a resident agent in Massachusetts?
A resident agent in Massachusetts can be any resident of the state who is 18 years or older, a registered Massachusetts domestic business entity, or a foreign business entity authorized to do business in the state. An entity may not be its own agent.
The resident agent needs to have a physical street address (often referred to as a registered office or principal office) in the state of Massachusetts. This can be your home address, the address of a family member, an accountant or attorney, the address of the business, or a Commercial Registered Agent service. Any physical address in the state may be used, but PO Boxes and mail drop services are not acceptable since someone has to be available to sign for documents.
The agent will also need to 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 a business entity.
Should you be your own resident agent?
Provided one of the members or officers lives in Massachusetts and is available during normal business hours, it is less expensive to act as your own agent rather than hiring a service. While this is the route many businesses take, there are a few reasons to consider hiring a service.
Privacy – The address of the resident 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 to know 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 also the remote possibility of a vindictive litigant or upset customer showing up at your house.
Availability – Massachusetts requires the resident agent to be available at the principal address during regular business hours. The biggest issue with availability, especially if a home address is used, is if the agent goes on vacation or is otherwise away for some period of time and can’t be reached.
If the Business Expands to Additional Locations – If the business has a physical presence in multiple states (offices, warehouses, employees, etc.), a foreign entity registration will often need to be filed with those states. A resident agent will need to be appointed with a physical address in each state.
Due Date Reminders – Resident Agent services provide annual report reminders and updates on any state requirements.
How much does a Massachusetts resident agent service cost?
Depending on the services provided, a commercial registered agent service typically costs between $100-$150 per year. Northwest Registered Agent is a popular service that charges $125 per year and offers several extras such as document scanning and mail forwarding and Harbor Compliance has a basic service starting at $99.
Some entity formation companies, like IncFile, includes registered agent service at no cost for the first year when you register your corporation or LLC with them.
Can a resident agent be changed in Massachusetts?
If the resident agent changes, the entity is required to file a change of registered agent.
A resident agent can be changed at any time by logging into the Massachusetts Secretary of the Commonwealth.
Is a resident agent liable for the actions of the business?
The only liability a resident agent faces is due to a lack of timely transmission of correspondence. If the resident agent is negligent in sending documents promptly and the entity suffers a financial loss, the registered agent is responsible for paying those damages.
