LLC Registered Agent question...

[timbernet]

Hello,
As some may remember from an early thread: I am 17 and am working on starting a business (Boy, what an education!). For sake of my age, I am working on starting an LLC. At first I put my name as the "Registered Agent", however, as I read the description closer I am thinking that I should make my Mom the agent.
Now, from a tax standpoint: She is part of the LLC for name (and age) sake only. Technically, she has a 1% ownership of the LLC, does that matter if she is the "agent"? A

Paperwork: Why doesn't the agent have to sign the Articles of Organization? Is that an Oregon-only feature or everywhere?

Thank you and happy new year!
Scott Brown

[Evan]

Scott,

I also formed an LLC and am under 18. I put myself as the registered agent because it is this person who will receive all the papers from the state (such as the annual report to file with the Secretary of State).

As for the agent signing the Articles of Organization, they are generally only representing your company on your behalf. For example, if I sued your company, they could ask the Secretary of State who to contact and it'd be whomever is listed as the registered agent. If you plan on manging it, I'd put your name down only because you'll have to amend the Articles of Organization (another fee, generally) to change it to you or someone else in the future. Adding managers and members is much simplier.

Also, ever since the LLC is a non-taxable entity and seperate from you, your mother doesn't really need to own 1% of it. The LLC will be treated as a partnership (the easiest way to be taxed at this point) and she'll be responsible for 1% of the net profit or loss.

Good luck with your venture.

[Evan]

Also, I read your other topic (again). I think your best bet would be to classify yourself as the registered agent so they don't get any notices on behalf of the company that you'd rather receive your self.

When you write your operating agreement, make sure you include a section about the limited liability and indemnification of the members, managers, officers, employees and maybe even agents on behalf of the company.

[timbernet]

Hi Evan,
I really appreciate your answers. Thanks for the info, I shall go forth and submit all the forms.
Since I don't have a lot of free time I used a program from Nolo.com called (oddly enough) LLC Maker. The LLC maker creates the forms per state and writes the "Operating Agreement" for you.

I let you (and maybe the forum) know how everything works out as soon as I file all the paperwork.

Thank you again,
Scott Brown

[Evan]

The state doesn't check the age of the people applying, you should not have any problems as long as you pay the filing fee and keep the company active with "annual reports" (they'll send you that information).

[timbernet]

I am not worried about the age on the LLC, I already have an DBA, I am worried most about merchant accounts...
I'll just wait and see how everything goes. I will send my LLC application in on Monday, then when I get a response I will call the merchant account company and get started on that. Oh, I will also get a business checking account...

--Scott

[Clayton]

I just formed an LLC in Arizona, where I live, and happen to be over 18 (21). The Arizona law regarding LLCs states that the registered agent must be over 18, have a mailing address in arizona (not a PO box) and two or three other things that I can't recall at the moment.

In Arizona the registered agent's purpose is to have a local contact for the Arizona Corporate Commission need they send the business notices etc. I don't know what Oregon law states, but if it is similar you'd need to find someone else to be a registered agent.

You should be able to get a merchant account and other things of that nature (bank accounts etc.) using the business's name, rather than your name. So even though you're not old enough to open a business account at a bank, the LLC would be able to, assuming that your operating agreement gives you that power.

[Evan]

The banks also can tell you that you cannot be a signer because you're underage. While the account is listed under a business, the signer is someone under 18. I'm not sure what banks you deal with. My bank allows people 17 and older to open account without having a person 18 or older.

[timbernet]

The Arizona law regarding LLCs states that the registered agent must be over 18, have a mailing address in arizona (not a PO box) and two or three other things that I can't recall at the moment.

I just emailed State of Oregon today. They said that there is no age limits on Registered Agents, just Organizers. So that is good.

I am thinking about putting my Articles of Organization the date of my Birthday as date as the latest date upon which the Limited Liability Company is to
dissolve. Then I would re-apply and just have a one-member LLC. Does that sound wise or foolish? Is it smarter to just keep things how they will be as:
Registered Agent: Myself (does everything)
Organizer: My mother (Mature enough in age for banks)

Thank you,
Scott

[Evan]

So you create the LLC today, and your birthday (for example, may not be real...) is in July, so the LLC ends in July? Then you create another LLC from July on?

The registered agent doesn't do anything for the business, they are simply the person who maintains the records for the business. Many businesses will have a lawyer or accountant do this -- they have no authority on how the business is run. The LLC you're forming puts your mom in charge of it and she is then responsible for paying tax on every cent the LLC earns. If you put her and you on it, then it's treated as a partnership and she still has to pay taxes. If you put just yourself, you file 1040 Schedule C. I do not recommend putting your mother on it at all. If you want, you can have your mother help you get into contracts, but I would not list her on the paperwork. Organizers are the people who will be paying the taxes.