Mistake #4 was failure to use a qualified statutory agent. In California we call these agents "Registered Agent for Service of Process." If you form a legal entity, such as a corporation or limited liability company, you need to designate an agent whose address is registered with that your states Secretary of State. This person is your official authorized agent to accept service of lawsuits or other legal communications for your company.
Failure to use a trustworthy agent can lead to problems, such as failing to respond in a timely manner, or outright concealment by the agent. I, like many business attorneys, offer this service for all my clients. The benefit is that I will be the first to receive notice of claims or lawsuits and can ensure that a timely response is made. CPA's, accountants and other service providers can also act as agent for their clients. I would advise that you use an attorney or a company that is dedicated to providing this service.
While the Out-House General Counsel does not endorse these companies specifically, here are few companies that are major players in this market:
- National Registered Agents, Inc.
- Corporation Trust Company
- Corporation Service Company