Does a nonprofit need a registered agent?

A registered agent is the person or company on the state record who can be handed a lawsuit for the organization. It is not a mailbox. Handing over the papers is called service of process. Nonprofits get sued too: over a contract, a slip and fall at an event, an employment dispute. The papers need somewhere to go. What is a registered agent for an LLC? covers the everyday job. It works the same for a nonprofit.

What the law says

States often put the agent rule in their nonprofit corporation law, separate from the LLC law. The words can differ. Three examples:

• Michigan. MCL 450.2241, in the Nonprofit Corporation Act, says each Michigan nonprofit corporation, and each out-of-state one authorized there, must have and keep a registered office and a resident agent in Michigan. The agent can be a person who lives in Michigan whose business office or home is the registered office, or a company authorized in Michigan with a business office at that same address. Michigan calls the job resident agent. Resident agent vs registered agent covers that word and the $5 change form.
• Ohio. Ohio Rev. Code § 1702.06 says every nonprofit corporation shall have and maintain an agent, sometimes called the statutory agent. The agent can be an Ohio resident or an entity with an Ohio business address. What is a statutory agent? covers the term.
• Indiana. IC 23-0.5-4-1 requires each domestic filing entity and registered foreign entity to designate and maintain a registered agent in Indiana. INBiz says a business cannot act as its own registered agent.

The Michigan scorecard, the Ohio scorecard, and the Indiana scorecard list each state’s agent rules and the commercial agents there. Those companies serve nonprofits as well as businesses.

Who should be the nonprofit’s agent

A small nonprofit often names a board member or the executive director. That works if the person qualifies and is reliable. It has three weak points:

• Board turnover. Volunteers rotate off. The agent line on the state record does not change by itself. When the person leaves, the line goes stale.
• A home address on the record. If the board member serves from home, that home street is public. How to keep your home address off public LLC filings covers how that happens.
• Business hours. The agent needs to be findable at the street during normal hours. A volunteer with a day job often is not.

The other choices are the organization’s own office, if it has staff there every weekday, or a commercial registered agent. A commercial agent keeps the line steady through board changes. What is a commercial registered agent? covers what that buys. How much does a registered agent cost? covers the yearly price. Read the company’s own page for any nonprofit terms.

The yearly report nonprofits file

Nonprofits file a yearly or every-other-year report with the state, like businesses do. The fee is often lower. The report usually lists the agent, so it is a chance to check that line.

Michigan’s page says failing to file can lead to dissolution, revocation, or loss of good standing after a two-year grace period, and the loss of the name. LLC annual report covers the business side of these filings.

What happens if a nonprofit has no agent

The same things that happen to a business. Ohio spells it out for nonprofits. Under § 1702.06, when the agent dies, moves away, or resigns, the corporation must promptly appoint a new one. If it does not, the Secretary of State sends notice by certified mail. The corporation then has 30 days to fix it, unless the Secretary allows more time. If it still does not, the statute says the articles “shall be canceled without further notice.” A canceled corporation can seek reinstatement within two years.

A canceled or dissolved nonprofit can have trouble with grants, bank accounts, and contracts that require good standing. What happens if you don’t have a registered agent covers the lawsuit side. How to reinstate a dissolved LLC covers coming back, with the steps that carry over to nonprofits.

What the registered agent does not handle

The agent is for the state and the courts. It is not the address the IRS uses for the organization’s tax filings. It does not register the organization for charitable fundraising. In some states that is a separate office. Maryland’s Charitable Organizations Division, under the Secretary of State, annually registers and renews charities that solicit there. It does not file the annual report unless you buy that service. Keep those jobs on someone’s list, with a name next to each one.

Steps for a board

1. Look up the organization on the state business search. Read the agent line and the status.
2. Decide who the agent should be for the next several years. Pick someone who will still be around.
3. File the change if the line is stale. How to change a registered agent on an LLC covers the order, and the forms for corporations follow the same pattern.
4. Put the yearly report on the board calendar, with an officer responsible.