If you’re considering starting a nonprofit or just recently founded one, you likely have a lot on your plate.
From financial challenges to meeting all your goals, you’ll inevitably need some help in the form of staff members and volunteers. One thing you’ll need to consider is hiring or appointing a registered agent.
A registered agent for a nonprofit serves a crucial purpose, and it’s a mandatory part of establishing a nonprofit in every state.
What’s a Registered Agent?
A registered agent will be responsible for keeping in touch with the state for legal purposes. You can identify an individual to fill this role, or you could hire a commercial agent service to fulfill the role. Either way, this agent needs to be able to act as a representative for your nonprofit organization. They also need to be able to fulfill several responsibilities, which will outline below.
Responsibilities of a Registered Agent for Nonprofits
The main role and responsibility of a registered agent is to keep your nonprofit organization in good legal standing with your state. Your registered agent should be available during regular business hours because he or she will be in charge of receiving any and all legal documents that get sent over to your nonprofit. These documents might include tax updates, compliance notices, or other information from the state.
Once the registered agent gets these documents, he or she will need to quickly forward them to your organization’s leadership to ensure that they get addressed in a timely manner. The registered agent should also create a copy of these documents.
The registered agent will also need to hold regular business hours because they’ll be your representative if a third party, the government, or a state agency attempts to contact your nonprofit. You want your registered agent to be available at all times during business hours (within reason) to ensure that your nonprofit is well represented when it needs to be.
Imagine your nonprofit got into a sticky situation and is now facing a lawsuit. If your nonprofit receives a summons, it will go directly to the registered agent. If you don’t have a good registered agent, you could miss out on an extremely important and time-sensitive document like the court summons.
Considering the weight of the responsibilities of a registered agent, you’ll want to make sure the individual or agency you delegate this responsibility to is reliable and dependent. What’s more, they’ll need to be trustworthy since they’ll be seeing proprietary documents regarding your nonprofit.
Does Your Nonprofit Have to Have a Registered Agent?
In short, yes, your nonprofit must have a registered agent to remain a valid nonprofit organization. Not only do you need to identify one while registering your nonprofit to begin with, but you’ll also be required to re-identify this registered agent when you renew your registration. Different states have different rules, but most states will require a renewal at least once a year.
The following states also require that you include a charitable solicitation disclosure listing your registered agent when asking for donations:
- Florida
- Georgia
- Maryland
- Mississippi
- Nevada
- New Jersey
- New York
- North Carolina
- Pennsylvania
- Virginia
- Washington
- West Virginia
- Wisconsin
Can I Be My Own Registered Agent For My Nonprofit?
Yes, you can list yourself as the registered agent of your nonprofit when you file your charitable organization registration documents. Keep in mind that you cannot put the nonprofit itself here--the registered agent must be an individual with an address in the state where the registration occurs.
Smaller nonprofits often list the founder as the registered agent, which makes sense. As the organization grows, however, it might make more sense to delegate that responsibility to a different staff member. Here’s what you should consider when looking for a registered agent:
- An individual who will maintain a stable address for the foreseeable future
- Reliable
- Dependable
- Strong organizational skills
- Must be 18-years-old or older
- Must be able to work most business days during regular business hours
- Must be able to fulfill the duties and responsibilities of a registered agent
Of course, you could also opt to outsource the responsibilities of a registered agent altogether and hire a nonprofit registered agent service. These types of companies can help ensure that your nonprofit remains compliant. They also offer stable, reliable, and consistent service. Depending on the size and scope of your nonprofit, hiring an entire agency might make more sense. Keep in mind that this option is likely to be the most expensive, too.
Who should be a Registered Agent for a Nonprofit?
If you decide not to be your own registered agent, who should you nominate as your nonprofit’s registered agent? You should know that many nonprofits decide to hire an entire agency to serve as their registered agents. Others opt to hire an individual like an accountant or lawyer.
The Pros and Cons of a Registered Agent Service
One of the biggest benefits of hiring a registered agent service is that you’ll have more peace of mind knowing that the company you’ve hired will take care of all the ins and outs of handling your nonprofit’s legal challenges. You’ll know that they’ll keep you compliant with the law. You’ll also have a lot more flexibility going with a service because they’ll likely have multiple staff members who can handle the same tasks.
While those are great perks, you will end up paying for them all because a registered agent service often costs more than hiring an individual who offers registered agent services like a business accountant or lawyer.
How Much Can a Registered Agent for Nonprofits Cost?
There are a variety of costs associated with having a registered agent for nonprofits. The most important cost is the initial filing fee, which can range from a few hundred dollars to a few thousand dollars. The ongoing costs of a registered agent for nonprofits can vary depending on the size and complexity of the organization but are typically much lower than the initial filing fee.
Another important cost to consider is the annual renewal fee, which can also vary depending on the size and complexity of the organization. Finally, additional costs may be associated with hiring a registered agent for nonprofits, such as the cost of office space and supplies.
Overall, the costs associated with having a registered agent for nonprofits are relatively small compared to the benefits they provide. A registered agent can help an organization stay in compliance with state and federal laws, save money on filing fees, and provide valuable assistance in the event of an audit or investigation.