What Is A Non-Commercial Registered Agent? (Explained)
If you're a business owner or a member of an LLC, you employ a registered agent for their essential role in your company's legal affairs.
You may hire the services of a non-commercial or commercial agent based on the needs of your business entity.
As a Mergers and Acquisitions specialist, I assisted several entrepreneurs in forming and maintaining their limited liability companies across all states.
Together with our team of business experts, we’ll share our insights on non-commercial registered agents to help you determine if it is the most suitable option for your company.
Quick Summary:
- A non-commercial registered agent performs the same duties but is not listed with the state’s filing office’s database.
- The Model Registered Agent Act of 2006 created two distinct classes of registered agents: commercial and non-commercial.
- According to the Small Business Administration (SBA), around 40% of startups and small businesses with less than 10 employees utilize non-commercial registered agents.
- In my experience, a non-commercial registered agent is suitable for a small business that operates in one state and does not require streamlined correspondence.
What Is A Non-Commercial Registered Agent?
A non-commercial registered agent is any individual or company that provides the same services of a registered agent but has not filed a listing statement with the Secretary of State.
Non-commercial agents are not officially registered with the state where they provide services and generally represent fewer clients.
According to the Small Business Administration (SBA), around 40% of startups and small businesses with less than 10 employees utilize non-commercial registered agents.
The primary responsibility of noncommercial registered agents is to accept the service of process documents like summons and complaints, in addition to official notices and correspondence from state and federal government agencies.
Appointing a noncommercial registered agent helps a company guarantee the prompt and reliable receipt of legal documents.
A noncommercial registered agent can assist in preserving the privacy of the company's owners and officers.
I advise clients and new business owners to hire a registered agent service in their first year of operations. This way, you can familiarize yourself with the responsibilities of the position.
According to the National Association of Secretaries of State (NASS) non-commercial registered agents represent around 30% of all registered agents in the United States. This suggests that a significant portion of LLCs and other businesses utilize individuals or smaller entities for this service.
"Choosing a non-commercial registered agent aligns with businesses aiming for cost-effectiveness without needing extra services. It’s essential for companies comfortable with managing their own compliance."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
What Is The Difference Between A Non-Commercial And A Commercial Registered Agent?
The difference between a non-commercial and a commercial registered agent can be referenced in the Model Registered Agents Act (MoRAA) of 2006.
Commercial agents register with the Secretary of State and file a special listing statement, for a fee, to streamline correspondence and communication with government agencies [1].
They are required to maintain their contact and address information with the state’s filing office.
In my experience, it is better to employ a commercial registered agent because their contact info is correct and updated on the state’s filing office records.
Businesses without a physical presence in the state where they are registered to conduct business need to employ a commercial registered agent that is authorized to provide service in different states.
Non-commercial agents on the other hand do not register, pay, or file a listing statement with the state office.
A noncommercial agent can be a company employee or a trusted individual who agrees to accept legal and official documents on the company's behalf.
What Is The Model Registered Agents Act?
The Model Registered Agent's Act is a model legislation created by the National Conference of Commissioners on Uniform State Laws to provide a consistent framework for regulating registered agents across various states in the United States.
The Model Registered Agent Act outlines the requirements for registered agents, encompassing their qualifications, duties, and responsibilities.
Additionally, it sets forth rules for the service of processes, notices, and other legal and official documents.
Although the Model Registered Agents Act is not a federal law, many states have adopted it, either entirely or partially, as a foundation for their own registered agent regulations.
The purpose of the Act is to encourage uniformity and transparency in the oversight of registered agents while offering a degree of protection for business entities that depend on registered agents to accept crucial legal and official documents.
Can Noncommercial Agents Have Multiple Clients?
Non-commercial registered agents can have multiple clients, provided they can fulfill their duties and obligations to each.
Some of my clients and colleagues from different companies employ the same non-commercial agent in the state.
Related articles:
- What is a Registered Agent For a Corporation
- What is a Non Profit Registered Agent
- How Much Does a Registered Agent Cost
FAQs
What are the Top-Rated Commercial Registered Agent Services in the US?
The top-rated commercial registered agent services in the US are ZenBusiness, Tailor Brands, and LegalZoom.
Can A Non-Commercial Registered Agent Refuse To Accept A Document?
A non-commercial registered agent can refuse to accept a document if it is not adequately addressed or does not pertain to the company that they represent.
References:
- https://www.sos.state.tx.us/corp/registeredagents.shtml
