What is a Statutory Agent?

First, the Ohio Legislature requires that when starting-up a corporation or limited liability company (along with other business entities), a statutory agent must be appointed. A statutory agent may be a person, corporation or limited liability company (along with additional options but these are the most common). A statutory agent is “appointed” in the articles of incorporation (think corporation) or the articles of organization (think limited liability company). The business entity has an obligation to “maintain” the statutory agent by naming a new statutory agent if the originally appointed agent is no longer willing or able to perform this duty, is no longer involved with the business or by providing an updated mailing address if the statutory agent has moved.

Second, once a business entity has selected a statutory agent, the person must be trustworthy and understand the importance of this responsibility. The reason for this is that the statutory agent’s primary responsibility is to receive mail. I am the statutory agent for many of my clients. While I do not receive very much mail throughout the course of a year as a statutory agent (besides some junk mail), the mail that is received is quite important. Mail will typically be from the Ohio Department of Taxation pertaining to some tax related issue, a complaint in a lawsuit being served by a plaintiff, the Ohio Secretary of State providing information or notices pertaining to the business entity, or another branch of the government providing information or notices pertaining to the business entity. If a piece of mail is received and goes un-responded to, this could result in the cancellation of the articles of the business entity (if taxes go unpaid), a default judgment in a lawsuit (if a complaint goes un-answered) and the like. This means that while a statutory agent will most likely not receive much substantive mail in a given year, the mail received may be crucial to the business entity.

Third, so who is typically a statutory agent for a business entity? In my experience, a statutory agent is either one of the business owners, the businesses’ attorney, the business’ accountant or a third-party company that is in the business of acting as a statutory agent for business entities.

Fourth, a business entity wants to select an agent that is not planning on moving frequently. This is because when a person moves they create a checklist of items to accomplish during the moving process—like turn off the cable, etc. But, updating the statutory agent’s address never seems to make it on the list. I make it a habit of periodically checking the Ohio Secretary of State’s website to ensure that the statutory agent listed for my clients is up to date. It is a very simple and inexpensive process to update either the name or the address of a statutory agent.

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at Chris@CorpusLawInc.Com or 216-973-2475. Copyright Christopher A. Corpus 2017.

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Chris Corpus

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