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What Does “Service of Process” Mean?
When someone sues your business, they must properly provide service of process to the business. The term “service of process” refers to the legal process of notifying a party about relevant legal action pending in court. Documents that can be “served” also include a court summons, writ, or subpoena.
When a business is named in a lawsuit, the party initiating the suit must provide proper legal notice regarding the litigation or demonstrate that they exercised due diligence in attempting to notify the party.
The particular requirements of serving process differ by state, but most state laws require hand-delivery of the petition filed in the suit. This action of service is usually conducted by a private process server or a law enforcement officer (such as a sheriff or constable). Some states only require that the court clerk mail notice.
The process server makes and files an affidavit certifying their attempted or actual date of service to the business. This date is important because it affects the deadline for filing an answer in the lawsuit.
Why Does a Corporation or LLC Need an Agent for Service of Process?
All states require that a company conducting business within the state must have a registered agent that can accept service of process on its behalf. This is important to parties bringing legal action against companies operating within the state, but it is also a necessary requirement so that business owners are well-informed about any legal actions taken against their company. If there is a suit filed against a business but the owner is never properly served, this can lead to an unfair judgment or verdict in court. In this instance, a business owner probably won’t discover the outcome of the suit until much later when attempts to collect on the judgment have already been initiated.
A case can be dramatically affected by improper or insufficient service of process. Because of this, it is important to ensure you have a system in place for accepting service on behalf of your business.
What Does a Registered Agent Do?
A registered agent accepts all official legal documents on behalf of the company, including petitions for lawsuits. The agent’s name and address are listed in the public records of the state so that any interested parties know who to serve in a legal cause of action. If your business operates in any other state, you will need an appointed registered agent there as well.
The basic qualifications for acting as a registered agent require that the agent be present at their listed address during normal business hours Monday-Friday. Business owners who do not have a brick-and-mortar presence or who are out of the office constantly may want to opt for a professional registered agent to accept important legal documents for their business.
Privacy is another important consideration for business owners without a designated business location. If you elect to act as your own registered agent without a business address, you will need to list your home address and this will be easily accessible through the state’s public records whenever someone searches for your business entity.