If you own a Delaware corporation, LLC, LP or other business entity, you should familiarize yourself with the term “service of process.”
So what is service of process? What does service of process mean, and why is it important for a Delaware company owner to understand service of process?
In Delaware, service of process is the method by which a company is served time-sensitive legal documents, including lawsuits and subpoenas; all services of process include a deadline for a response. For example, service of process is the means by which a person filing a lawsuit informs the person being sued about the lawsuit. The person receiving the service of process has a designated period of time in which to send a reply.
In Delaware, each business entity is required to retain a Registered Agent; one of the reasons for this regulation is so that service of process can always be executed in a judicious manner. The Delaware Registered Agent is required to maintain a physical location with standard office hours, which means the office must be open and accessible to accept service of process Monday through Friday, during normal working hours.
The Registered Agent is responsible for receiving service of process and forwarding it to the appropriate company in a timely fashion. This is why it is so important for Delaware company owners to choose an experienced, efficient Registered Agent (it is also why, in states where a Registered Agent is not mandated, it is highly recommended that companies maintain one in order to ensure they receive all service of process and other significant documents).
Here is what happens when a Registered Agent, such as Harvard Business Services, Inc., receives a service of process for one of its clients:
Receiving and responding to a service of process is a serious matter—ignoring legal proceedings or subpoenas could be disastrous for you and your company. If you fail to respond to a lawsuit in a timely fashion, the judge could declare that you lose the case, without your even showing up. If you fail to respond to a court order in a timely fashion the judge could declare you in contempt of court and issue a warrant for your arrest.
Reversing these situations will take time and cost money. You’ll need a lawyer to go to work for you right away. If you would like to ensure you receive all services of process as well as all of your company’s Franchise Tax reports and late and/or void notices from the Delaware Secretary of State, change your Delaware Registered Agent to the best and most reliable in the industry.