When you form a business in Colorado, and register it with the Secretary of State, one piece of information you will need to provide to the Secretary’s office is the name of your “registered agent.” There is a lot of confusion about what a registered agent does, even among people who you would expect to know better.
In fact, the registered agent’s duties are quite simple: accept service of documents for the business and forward those documents to the business in a timely manner. That’s it. The registered agent does not make management decisions for the business, unless he’s also a manager. And while he could be an owner of the business, he doesn’t need to be. His signature is not required to authorize the business to take out loans or open bank accounts. If your bank tells you that it needs your registered agent’s authorization in order to open an account or conduct a transaction, politely inform them that they are wrong.
But although the tasks associated with being a registered agent are extremely limited and well-defined, they are also extremely important, and you should choose this person carefully. You don’t want to find out that a default judgment was entered against your business two months ago because your registered agent forgot to let you know that you had been served with a lawsuit. And there are certain statutory requirements that registered agents must fulfill. You will want to be sure that your registered agent fulfills those requirements, is organized, and appreciates the importance of responding to legal deadlines in a timely fashion.
The requirements for a registered agent
The requirements for registered agents can be found in Title 7, Article 90, Part VII of the Colorado Revised Statutes:
- You may name either a person or another business to serve as your registered agent.
- If you choose a business to serve as your registered agent, it must have a usual place of business here. And if it’s a business that was formed in another state, it must have received authority from Colorado’s Secretary of State to transact business here.
- If you choose an individual to serve as your registered agent, that person must be at least 18 and must have his or her primary residence here.
- Whoever you choose to serve as your registered agent must consent to being a registered agent.
- You may only have one registered agent at a time.
- If you meet the requirements above, you may appoint yourself to serve as your registered agent.
- The registered agent does not need to be otherwise employed by or associated with your business. If your registered agent is not otherwise associated with your business, however, it’s probably a good idea touch base every once in awhile to confirm that he remembers he has this responsibility.
If you need to change your registered agent, you can do that by filing a “Statement of Change Changing the Registered Agent Information” with the Secretary of State.
Appointing a registered agent is just one important decision that you will need to make when creating your business. If you need help navigating this process, please contact me for advice specific to your situation.