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Governance And Organizational, Nonprofit Fundamentals, Recordkeeping And Accountability

How Registered Agents Can Help Your Animal Organization

Julia Magnus

January 5, 2023

An image of two people bent over documents, signing them with a pen. — *What is a registered agent, and how can they help your animal organization? Read on to learn more! Photo by* *Romain Dancre* on Unsplash

Introduction

Having nonprofitA non-governmental organization whose primary purpose is something other than selling goods or services. status for your animal organization can come with many benefits, such as tax exemption and donations being tax-deductible to donors. However, it can also come with some costs! (To learn more about the costs and benefits of getting nonprofit status for your animal organization, you can review our resource on these issues here!)

One cost nonprofitsNon-governmental organizations whose primary purpose is something other than selling goods or services. face is dealing with ongoing compliance requirements that require them to receive, complete and submit paperwork to relevant authorities on a timely basis. Sometimes, keeping track of all the filings you must do can be overwhelming on top of all the direct care work that accompanies running a sanctuary or a rescue! It can be easy to overlook a filing deadline and not so simple to fix the problems that may ensue as a result.

Another cost associated with having nonprofit status is a loss of privacy. Many organizations engage with the public as part of their missionThe stated goals and activities of an organization. An animal sanctuary’s mission is commonly focused on objectives such as animal rescue and public advocacy. and allow public access to their properties. But others may wish to focus solely on direct care and feel uncomfortable with allowing public access. This is a valid position and concern! Nonprofit animal organizations are not required to engage with the public if they do not want to. And some may have real concerns about sharing their address publicly for fear of unwanted attention, which could even include animal dumping on their property. For example, one urban sanctuary encountered problems when a rescue group searched their tax filings, found their address and then disclosed it to a neighborhood group chat. Very quickly, their address was shared widely, and they encountered folks coming to their fences and gates to throw unwanted roosters into their yard!

Keeping track of filings and maintaining some privacy is a tricky thing to navigate, given that many filings for nonprofit organizations (like tax returns or state certificates of good standing) are often a matter of public record. Using a registered agent when you start your animal organization can help you both keep track of your filings and mitigate some privacy concerns. Read on to learn what a registered agent is, who can serve as a registered agent, and how to choose an agent for your animal organization.

What Is A Registered Agent?

A registered agent is either an individual or a service that your nonprofit organization appoints to be the legal point of contact for official communications from state and federal governing bodies and for service of process.

What Is Service Of Process?
While no one relishes the thought of a lawsuit, they can and do happen. Part of what registering with your state means is that you must provide a way for a potential plaintiff to deliver you a summons and complaint in the event of a lawsuit against your organization. The method in which a summons and complaint are delivered (as well as later pleadings in a case) is called service of process. Service of process is part of all courts’ constitutional obligation to provide due process to defendants. To learn more about service of process, as well as to see a chart outlining standard service of process procedures for all fifty states, you can check out this article!

To form or register a nonprofit organization in most states, you are required to appoint a registered agent. For state filings, the registered agent must have a physical address (generally a post office box will not suffice) and be available during business hours. This is because their address is used for all official communications, from service of process to other legal notices, such as compliance or tax-related updates. This address does NOT need to be the physical address of your rescue or sanctuary organization! However, if you fail to name a registered agent in your nonprofit registration application, your application will be rejected.

Your registered agent can also serve as your point of contact for filings with the IRS. When you fill out a Form 1023 or a 1023-EZ in order to file for 501(c)(3) status with the IRS, you are required to identify a point of contact for your organization. You can use a post office box for IRS correspondence, which can keep your organization’s physical address off of your tax filings if privacy is a concern. You can also use the address of the registered agent you appointed for your state filings, which again, can be a separate address from that of your sanctuary or rescue.

For those who have concerns about privacy, this can be very helpful. Using a registered agent with a different physical address than that of your sanctuary or rescue can keep your organization’s exact location information off of public information like tax filings and can help maintain your privacy if you are not interested in active public outreachAn activity or campaign to share information with the public or a specific group. Typically used in reference to an organization’s efforts to share their mission.. With that said, your tax returns will still be public, as will be the identities of your board and all the additional information you must disclose on your returns.

An excerpt of instructions for the IRS Form 1023. It reads:

Specific Instructions

Part I. Identification of Applicant.
Line 1a. Enter your complete name exactly as it appears in your organizing document, including amendments.
Line 1b. If you have an "in care of " name, enter it here; otherwise, leave this space blank.
Line 1c-i. Enter your complete address where all correspondence will be sent. If mail isn't delivered to your street address and you have a P.O. box, list your P.O. box information instead of your street address. — Part of the instructions for filling out the IRS’ Form 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Note that you can use a post office box. You can also use your registered agent for your mailing address! Just keep in mind that they will be receiving all correspondence from the IRS, and you will need to make sure that this is forwarded on to you! Source: *The Internal Revenue Service*.

Your registered agent is also responsible for forwarding any legal documents and notices they receive to your organization. Because many of these documents are time-sensitive, you need to make sure that you choose a reliable registered agent, whether they are a trusted individual or a commercial service!

Be Aware Of Registered Agent Requirements When Soliciting For Donations Out Of State!
In some states, when you are registering to solicit charitable donations, you must also name a registered agent who maintains an office in that state. If you solicit donations across many states, this can be onerous both administratively and in terms of fees unless you opt to choose a registered agent service who has nationwide offices, which will be discussed further below.

Who Can Serve As My Organization’s Registered Agent And How Do I Choose Them?

A registered agent can be an individual, like a founderSomeone who starts an organization. A Founder may or may not also be the Executive Director of an organization., staff or board member, OR you can use a commercial registered agent service. Again, in either case, they must:

Have a physical address (not a post office box!) in the state of your organization’s operations;
And maintain regular business hours at this location.

Whether you choose a trusted individual or a service to serve as your registered agent, they must be reliably available at the address you provide during business hours to receive service of process and other documents necessary to maintain your organization’s good standing. You must also trust them to promptly forward you all communications they receive on your behalf.

For Ease Of Administration, Appoint The Same Registered Agent For All Of Your Filings If Possible!
Whether you choose to appoint an individual or a service as your registered agent, it makes sense to use a single agent for all of your purposes (state and federal filings) as much as possible. Having all of your paperwork going to the same place makes it significantly easier to keep track of all of your correspondence and in making sure that you respond appropriately and promptly! However, as mentioned in the text box above, this may not be possible when you must register in other states for fundraising solicitation. In such cases, you will likely need to appoint a registered agent located in each state where you are soliciting donations unless you use a national service, which will be described further below.

Individuals

Many small nonprofit organizations appoint their founder as their registered agent when they start operations. In some cases, this can be very effective, especially if the founder is largely responsible for the administration of your animal organization and is skilled at effective recordkeeping, calendaring and keeping track of filing deadlines. However, as your animal rescueAn organization that helps secure animals from dangerous or unacceptable situations. As organizations, rescues may or may not have dedicated permanent infrastructure for housing animals. or sanctuary organization grows, so will the ongoing tasks associated with caregiving and administration! It can be very easy for an individual who is deeply involved in these tasks to let deadlines slip or to miss mailings or filing dates.

Board members can come in handy in these situations, as they may be less involved in day-to-day rescue or sanctuary operations and may be more able to undertake the job of receiving mailings, recording dates and maintaining copies of correspondence, and relaying communications to you promptly. If your animal organization is lucky enough to have someone like an attorney or an accountant on your board, they may be excellent choices to take over the task! Remember, as mentioned above, if you are registering to solicit donations in a state other than your home state, you may need to appoint a separate registered agent in that state. In all cases, if you are appointing an individual as your registered agent, you will want to make sure that this person:

Is 18 years of age or older, as this is generally a requirement to accept service of process;
Has a stable address and will update you if they change addresses so that you can update your state with their new address;
Maintains stable office hours so they can promptly receive and forward all crucial mailings and notices to your organization’s leadership;
And is organized enough to keep copies of all the records and information sent to them, as well as the dates that they were received and sent on to you.

Make sure you keep your registered agent information up to date! After selecting a registered agent, your nonprofit must list them on your state registration forms as needed. But you must also update the state if you change your registered agent or their address changes before you renew your registration annually! The requirements for this process may differ from state to state, so consider consulting with a qualified nonprofit attorney or other nonprofit professional in your jurisdiction to make sure you are appropriately updating your information as needed. There may also be fees associated with updating registered agent information, so that is something to keep in mind as well. Choosing a registered agent with a stable address can help avoid this kind of issue.

A Position Of Trust
Once you have appointed your registered agent and filed with your state, keep in mind that your registered agent is going to be receiving more than just governmental notices! They may receive things like credit card applications or other kinds of solicitations. It’s vital that you appoint someone who you can trust to receive such communications, and who will pass them on to your nonprofit’s leadership or appropriately destroy them as per your instructions!

Commercial Registered Agent Services

As mentioned above, as your organization grows, if you appointed an individual within your organization as your registered agent, they may become increasingly busy with day-to-day tasks and have less time and energy for tracking mailings and notices. This is a normal growing pain, but it’s essential to address. Missing a filing deadline can come with significant costs, both financial and otherwise. For example, if you fail to file your annual report with your state, your organization may be involuntarily dissolved. Reinstatement may involve filing an updated report and paying a fine. It can also lead to public questions about the legitimacy of your organization! In some cases, it can impact your ability to raise funds as well.

Also, as you grow, if you are increasingly engaging in fundraising in multiple states (and thus must find registered agents in those states), filing fees can add up quickly. The more individual registered agents you have, the more likely you may encounter the need to update records with new addresses and the more fees you may incur. It can become increasingly difficult to manage multiple registered agents at once!

One solution to these problems is to hire a registered agent service. When it comes to choosing a service, you will want to look for the following:

Look for a registered agent service that has expertise in working with nonprofits. Such organizations may also be able to offer you additional services beyond simply forwarding you legal notices and paperwork.
Look for a service that has established offices in every state in which you are fundraising. National commercial registered agent services can often offer nationwide support (including stable office addresses in each state), which can prevent any headaches when it comes to updating governing authorities about address changes.
Ask service providers that you are considering about their recordkeeping and communications policies, and make sure that they line up with your needs and expectations.

The disadvantage to hiring a commercial registered agent is that it will cost you. Depending on what you are asking your service provider to do for you, costs can range from $50 to $300 or more annually, generally more if you are asking your service provider to act as your agent in multiple states. That said, having a professional registered agent can help take a lot of burden off of your shoulders when it comes to tracking administrative deadlines!

Create Checks And Balances When It Comes To Deadlines And Filings!
Whether you choose an individual or a service to serve as your registered agent, it’s always good to have checks and balances. Make sure that you always have multiple people calendaring important dates like your annual filing due dates, the dates your returns are due, and any other important dates that could impact your organization’s good standing!

Conclusion

While appointing a registered agent may seem like a formality when you form your nonprofit organization, the role is actually important! Your registered agent will be in charge of receiving and keeping track of all official correspondence to your organization from governing authorities and must be either an individual or entity you trust to handle these communications appropriately. However, having a trusted registered agent can significantly help you manage your administrative paperwork and filing deadlines! It can also help if your organization wants to have an address other than its actual physical location listed on public filings. Choosing your registered agent thoughtfully can be a significant help with both of these issues!