FreeRegisteredAgent.com Inaugurates Hall of Shame
I’ve run across another online incorporation / LLC formation service – FreeRegisteredAgent.com – with deficiencies that I must bring to readers’ attention. There now are enough of these companies that I have listed them on my new Hall of Shame page.
FreeRegisteredAgent.com’s claim to fame is that it provides registered-agent services at no charge for one year, and for $99 per year thereafter.
Their Free California Registered Agent Service page touts their service for California corporations, LLCs and other entities. The problem I have is that California does not require any entity to have a registered agent, so after the first year, companies are paying for a service that they don’t need!
That page states that “almost every jurisdiction requires by law that you must have a registered agent located in that jurisdiction” without stating that California is not such a jurisdiction. California, instead, allows individuals and corporations to be designated as agents for service of process, and they need not be paid – please see Incorporation: Not All (States’) Agents are Created Equal.
Talk about misleading….
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Follow-up: Since writing this post, I have had a lengthy, cordial e-mail exchange with the owner of FreeRegisteredAgent.com. I now know that he did not intend to mislead readers; the site is misleading because –
- He was not aware of how California and Delaware corporate practices differ, and
- He uses a standard template for all states’ pages on the website, so even though he now is aware of California’s differences, he cannot reflect them in the website’s text, anyway.
Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.
Business Entities, Startup
11/20/2010 | 5:54 pm Permalink
I am not a lawyer, but the CA Secretary of State website seems to clearly state ?Corporations, limited liability companies and limited partnerships are required by statute to designate an agent for service of process.? (ref: http://www.sos.ca.gov/business/be/service-of-process.htm). Am I missing something?
11/20/2010 | 9:10 pm Permalink
I believe you are confusing two similar, but different, terms.
Certain states (perhaps most notably, Delaware) require that each corporation that is formed in or otherwise registers with the state pick, from a list, and pay a registered agent to represent the corporation there.
California has a different requirement: Each such corporation must designate an agent for service of process; however, there is no requirement that the agent for service of process be picked off any state-approved list, or be paid, or be at a specified address during specified business hours. The agent can be the incorporator, or his attorney (I allow clients to designate me, and I do not charge for that service), or his brother-in-law, or any individual or other corporation located in CA.
7/26/2011 | 6:09 pm Permalink
Dana, that is assuming that the “brother in law” is home during the day to recieve service of process. To my knowledge anyone can act as a registered agent in a state. The question is, should they? And the answer to that is probably a resounding NO! Is it worth assigning your nephew as your registered agent to save $99 a year or whatever when you later have to pay a $500 late penalty to the state of Texas for an annual report notice that wasn’t forwarded to you by him? How about when your sister in law who you’re using as your registered agent goes to work and doesn’t receive service of process for your business and you have to spend thousands getting a default judgment vacated? Agreed that using an attorney is a preferable option especially for service of process getting to where it needs to go, but most attorneys in my experience don’t provide this service for free or even inexpensively.
Then there are the states that don’t send annual report notices at all anymore. Most legitimate registered agents offer automated notices of these reporting requirements (something even most attorneys acting as agents don’t do).
Sorry, but “agent for service of process” and “registered agent” are saltines and crackers – exact same thing. I believe you are mistaken.
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