When you form a corporation (or qualify a corporation to do business within a state), you are often required to have a registered agent in that state.
While the laws vary from state to state, a registered agent is basically someone who provides a legal address within the state during normal business hours to facilitate legal service of process in the event of legal action or lawsuit. In reality, they will charge you an excessive amount of money to simply forward a tax notice once or twice a year.
Quite frankly, these incorporation/registered agent services really don't add much value. Mostly, they charge for services you would otherwise get for free. Furthermore, contrary to what they would have you believe, you can act as your own registered agent (provided you reside in the jurisdiction).
When I originally incorporated my corporation, in Delaware, I used the services of the Company Corporation. In hindsight, I could have registered online directly with the state of Delaware and saved a pile of money. At the time I submitted my order to incorporate with them, I was to receive one year of registered free agent service.
However, six months after incorporation, I received a bill from the Company Corporation for a whopping $215 to act as my statutory representation in Delaware. After double checking my incorporation date, I fired off an email to the Company Corporation and received the following e-mail in response:
Mr. Turner,
That is correct. We do bill four months in advance to give you ample time to make changes if need be. We actually send out a series of ten invoices, it is not technically due until May. Sorry for the confusion.
Have a great day.
This week, I received another invoice prefaced with an important day-glow yellow "Payment Reminder," attached to an invoice which stated I was now 1-30 DAYS past due in forking over $215 (even though my service is free until May).
Had their rates been competitive, I would have simply paid the invoice. However, as you will see below, they are significantly more expensive than anyone else in the industry (that I could find), and as a matter of principle I won't allow myself to get ambushed that badly.
Shopping for a Registered Agent
The process of changing your registered agent is extremely simple: you pay a fee to the government and submit a simple form. Not surprisingly, most of the registered agents online will do everything for you and some will even pay for the fee themselves.
Below is a quick list of statutory representation that I was able to find online, with their rates. If a firm had a "fill in this form and we will call you back" quote sheet, I moved on. Those types of businesses tend to be brokers who are reselling the services of other statutory agents. It is best to simply ignore them.
The question I have to ask myself is-- given that all registered agents provide exactly the same service, why is there such a wide discrepancy in the pricing ($50-$320)? Some of the registered agents try to distinguish themselves by providing "compliance" solutions, which are basically a passive web site with a calendar. They are essentially totally worthless -- you are better off researching the dates and adding them to your outlook/Google calendar.
Labels: Business, Consulting
After being sick and unproductive for the last few weeks, I decided to refocus on getting a shrink wrapped product out the door. What I needed was a list of tasks, or better yet a schedule to keep me motivated (and maybe I could see tasks I could farm out to other coders).
The pointy haired manager in my head shrieked, "No. No. No. That won't do. We must ship sooner." I sighed and started editing to make the schedule more sane. At that moment, I became acutely aware of how much more productive a solitary developer can be when isolated from corporate bureaucracies and six sigma philosophies.
by Alex Martelli, and cut and paste a simple yet elegant script that would search and replace text in a file making a simple application that would generate classes, XML files from template files. 