Resident Agent Maryland: Everything You Need to Know
You need to register as a "resident agent" in Maryland when you incorporate in the state and form either an LLC or corporation. 6 min read
You must designate a resident agent Maryland when you incorporate in the state and form either an LLC or corporation.
Resident Agent Maryland: What Is It?
According to the Maryland state code § 2-108, all limited liability companies and corporations need to designate a resident agent. This role is also referred to as the registered agent. The agent can be an organization that is authorized or registered to operate in Maryland or an adult individual. A business must include the name and address of the resident agent on its initial paperwork that is filed with the state. The main purpose of having a resident agent is to act on your behalf and be the point of contact when dealing with taxation and incorporation issues.
Businesses cannot form in the state of Maryland until they have designated a registered agent. The state will reject the articles of incorporation or articles of organization without a designated registered agent on the paperwork.
The details of your resident agent are required for filing the incorporation documents. Your appointed resident agent needs to:
- Be either an organization or individual
- Be authorized to operate in the state of Maryland
- Have a registered office address
- Be able to receive, forward, and accept notices and demands
The name and address of your appointed resident agent will be published online as a public company record.
Which Businesses Need a Resident Agent?
Several types of businesses need to have a resident agent, such as:
- Domestic and foreign corporations
- Close corporations
- Professional corporations
- Nonprofit corporations
These businesses need to hire a resident agent in Maryland before they would incorporate. The articles of organization or articles of incorporation need to include the name and details of the resident agent. An application without a resident agent is rejected by the Department of Assessments & Taxation.
Businesses that are conducted from home and don't have a physical office might also want to appoint a resident agent, as the cost of hiring one is lower than office leasing fees.
It is also possible that your corporation acts as a resident or registered agent, but it is important that you have a physical office address and normal business operating hours in Maryland.
According to Code, Title 2 § 2-108, every corporation and LLC in Maryland needs to appoint and maintain a resident agent to operate in the state. Official notices and legal documents are sent to the resident agent's address.
What Maryland Resident Agents Do
The main role of resident agents is to be available to deal with the taxation and legal matters of the company on their behalf. They need to receive and forward notices, as well as demands.
If the resident agent is an individual, they do not have to be a member of the LLC. They can be anyone who can be available to deal with official matters during business hours and is a resident of the state of Maryland. Regardless of who you choose as your resident agent, you will need to have them sign the formation documents of the LLC. The signature confirms their agreement to serve as the resident agent. The LLC formation documents will not be accepted without the information and signature of the resident agent.
The resident agent needs to accept the service of process on the behalf of the LLC or corporation. Service of process is a procedure that allows one party to give legal notice to another, typically the defendant in a case. These notices are often accompanied by other court documents, such as details about a lawsuit or a summons to court. Service of process is always delivered to the resident agent provided when the business was formed. Since legal documents have limited time periods for response, it is critical for a business to have a reliable resident agent who will get the information to the business as soon as possible.
Individuals acting as resident agents need to:
- Be over 18
- Reside in Maryland
- Sign the LLC formation documents
A resident agent will need to be available to accept tax notifications, reminders, and other business correspondence that they forward to their clients.
When a resident agent receives a legal notice, they generally scan and upload it to your online account. They have to notify you through email or phone. For more information about resident agents, contact the Maryland State Department of Assessment and Taxation (SDAT) at 888-246-5941 or PO Box 17052, Baltimore, Maryland. They are also available online or by email at firstname.lastname@example.org.
Responsibilities of Resident Agents
It is important to choose your resident agent carefully, because if they don't comply with the requirements of the position, your business will suffer. If you would like to find out how to find the right resident agent, ask a professional business legal advisor.
If the resident agent fails to perform his duties, you will face legal action for not complying with taxation or registration requirements. You cannot be excused from your legal obligations just because the resident agent didn't notify you of the important notice or official letter. If you receive a time-sensitive document through your resident agent, it counts as if you personally accepted it, and therefore you are legally responsible.
You can hire a commercial resident agent in Maryland who has the essential knowledge of how to communicate with your company and deal with tax authorities, state departments, legal firms, and other organizations on your behalf.
As an example, if your business receives a default notice, and your resident agent doesn't send it to you in time, you will miss the appeal deadline and cannot defend yourself. By default, you will need to pay the amount, whether or not you owe the money. At the same time, if you get a reminder to file your annual reports, and you don't get the letter from your resident agent, you will miss the deadline and receive a penalty. In extreme cases, choosing the wrong resident agent can lead to your business being dissolved.
The required annual tax report in Maryland is the Annual Personal Property Return. If your business doesn't own property, the report is more like a standard tax return. The resident agent service in the state includes regular email communication with reminders to ensure that your business remains in compliance with the MDAT, as well as tracking of the annual due date of the report.
A resident agent must also maintain regular business hours throughout all 12 months of the year so that the service of process delivery can take place. Many business owners have different hours, so this can be difficult if you serve as your own resident agent. You may want to consider hiring a commercial agent who will be available during business hours to meet this requirement. If your business operates in additional states, you will need to designate a resident agent in each state. Hiring a commercial agent in each state can make this process a bit easier.
Steps to Change the Resident Agent
If you need to change your company's resident agent, you will need to file the completed form, titled Resolution to Change Principal Office or Resident Agent. This can be filed by fax, mail, or in person and requires payment of a $25 filing fee. All business entities will use the same form. The resident agent must consent to the change by signing the form, but you can file a copy of the form as the office doesn't require the original.
Processing of the form by the state of Maryland takes about eight weeks. If you need to expedite the process, you can pay the $50 expedited processing fee and the change will take approximately a week. Should you choose this route, file the form by fax and include a request for expedited processing on the cover sheet.
What if the Resident Agent Fails to Perform their Responsibilities?
If your company's resident agent fails to perform their responsibilities, this could cause major problems. Failure to file your annual reports could result in the state of Maryland dissolving your business. Even worse, you may not know about the dissolution until action has already been taken. By using an experienced registered agent, you can avoid issues and get information right away, such as details about a pending lawsuit or a deadline for a required report that must be filed with the state.
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