By: David Thierer, Public Relations Representative
Designating a Registered Agent for your Association is a requirement of Florida’s Not-For-Profit Corporation Law. If you do not designate a Registered Agent, your corporate status will be in jeopardy of being dissolved and your Association will lose all protection that is afforded to you as a Not-For-Profit Corporation. So, what does that mean? You may have heard the phrase “piercing the corporate veil.” No Registered Agent? Consider your corporate veil torpedoed! Board Members and Officers may now be personally exposed to liability for matters that should be your Association’s responsibility and your personal assets could be at risk.
What is a Registered Agent?
A Registered Agent is the person or entity who is designated by law to receive and to be served with legal process, government notices and other legal documents as the representative of the Association. You may ask, “Who can be a Registered Agent for our Association?” The Florida Statutes, Section 607.0501, provides that a Registered Agent may be:
- An individual who resides in the State of Florida whose business office is identical with the Registered Office;
- Another Corporation or Not-For-Profit Corporation as defined in Chapter 617, authorized to transact business or conduct its affairs in this state, having a business office identical with the Registered Office; or
- A Foreign Corporation or Not-For-Profit Foreign Corporation authorized pursuant to Chapter 607 or pursuant to Chapter 617, to transact business or conduct its affairs in this state, having a business office identical with the Registered Office.
The Registered Agent’s name and address will appear on the annual report that the Association is required to file by the 1st day of May each year with the Florida Division of Corporations in the Florida Department of State.
Responsibilities of a Registered Agent
The primary duty of the Registered Agent is to receive Service of Process of lawsuits and other legal documentation against the Association. For this reason, you want to carefully consider who you select for this responsibility.
The Registered Agent must also be available during normal business hours, usually 9 a.m. – 5:00 p.m. to accept Service of Process which includes delivery of documents such as complaints, summons, and/or subpoenas. If a process server is unsuccessful in reaching your Registered Agent about a lawsuit, the court case may be able to proceed in your absence and without you even knowing about it! Worse, the court may enter a judgment against your Association even if you are not there to defend yourself. For this reason, the Registered Agent must have an actual street address; PO Boxes are not allowed.
Why a Board Member Should Not be your Registered Agent
Your home is your castle and not a business. Being your Association’s Registered Agent means process servers will be knocking at your residence to serve you on behalf of your Association. You are legally required to make yourself available during business hours to accept service. You probably have a life outside of serving on the Board and may not necessarily want to spend business hours at your home. Some process servers may arrive at an inopportune time and may not be professional or courteous when they serve you with process on behalf of your Association.
Designating a Board Member as your Registered Agent may also open your Association to liability due to such person not knowing what should be done with the legal document with which they are served. For instance, whether your Registered Agent is a current or a former Board Member, he or she may accidentally or negligently fail to forward an important document to the right party in a timely basis. This unfortunate delay may result in severe adverse consequences to the Association and even to the Board Member. Sometimes a former Board Member (or even a current one) may become vindictive and deliberately not forward the document to the right person(s) in the proper time frame for handling, thereby resulting in liability or at least unnecessary expense for the Association.
Who Should be Your Registered Agent?
We encourage you to select a professional with an active business address to serve as your Registered Agent. This law firm acts as the Registered Agent for many of our Association clients. Most management companies offer this service as well. However, there are advantages to having your legal counsel serve as your Registered Agent since generally it is a legal document that is being served upon the Registered Agent and such will normally need to be forwarded to your attorney for review and handling. Having your law firm be served directly as your Registered Agent eliminates the “middle man” so to speak. This also reduces the possibility of inadvertent or negligent delay in forwarding time-sensitive legal papers to your attorney who most likely is the appropriate person to be advising the Association regarding such a matter.
If you select or change your Registered Agent when you file your Annual Corporate Report each year, there is no additional fee. However, if you select a new Registered Agent at any other time of the year, there is an additional minimal filing fee of $35. Nevertheless is well worth the fee for your Association to have the appropriate choice of Registered Agent on file with the State when you balance that against the possible consequences of not selecting the right Registered Agent.
If you have any questions or would like to have Clayton & McCulloh serve as your Registered Agent, please feel free to contact our Public Relations Department.