Thursday, August 9, 2012

Essential info for nonprofits from DC Bar Pro Bono Program

From Regina Hopkins, Assistant Director for Community Economic Development at the DC Bar Pro Bono Program:
Every nonprofit corporation operating in D.C. must have a registered agent. The registered agent is the person designated by the nonprofit to receive important notices addressed to the nonprofit organization. This includes notices from the D.C. government, including the biennial return form, and any tax or other administrative notices. In addition, the registered agent is the person who is served with any legal papers if your nonprofit organization is sued.

Since so much of this information is time sensitive, it is important that whoever receives the information passes it along to the responsible person within your nonprofit as soon as possible. That is why it is important to pick the right person as your registered agent.

Who May Be a Registered Agent?
Under the previous Nonprofit Code, a registered agent had to be a resident of the District of Columbia. The residency requirement could be a problem if an individual serving as the registered agent, such as the executive director or Board chair, worked in D.C. but lived in Maryland or Virginia.

Now this problem has been solved. Under the new Nonprofit Code, which went into effect January 1, 2012, the rules regarding who can serve as a registered agent have been changed. Under the new rules, a nonprofit may designate either a commercial registered agent or a non-commercial agent.

A commercial registered agent is a business that will serve as the organization's agent for a fee. There are a number of corporations that are listed with the D.C. government and which will serve as a nonprofit's registered agent. Under the new law, these commercial entities can serve as registered agents provided the commercial entity maintains an office in D.C.

In addition, a nonprofit that does not employ a listed commercial registered agent, may designate as a registered agent any other corporation or an individual that serves in D.C. as the registered agent. The nonprofit may also use an individual who is:

  1. An officer, director or employee of the nonprofit provided the nonprofit maintains an office in D.C.; or
  2. An attorney licensed to practice law in D.C. who maintains an office in the city.

As you can see, in all cases, the important point is not where the person lives, but where he or she maintains a business office. Since legal papers are typically served during the day, where the person can be found during business hours is critical. As a result, most nonprofits will have greater flexibility in selecting a registered agent.

Verifying Your Registered Agent
Therefore, every nonprofit should take the opportunity to review who is serving as its registered agent. You can verify this information by going to the Department of Consumer and Regulatory Affairs website and checking your nonprofit corporation's latest corporate registration. Go to the website's main page, click on the CORP ONLINE icon, and it will direct your organization's registration.

Once there, check to see who is listed as your organization's registered agent and also look at the address of the person listed. If the person is no longer with your organization, or if the address listed is not the agent's current business address, you should file a form with DCRA changing the information about the registered agent. You can do so by filing a form with DCRA. There is a $40 filing fee.

It is important that you keep the information about your registered agent current. If your organization fails to do so, and it does not receive notice of a filing that is due or that your organization has been sued, your organization may be found in default, and may suffer significant financial penalties as a result. Keeping your registered agent filing up to date is an important way to avoid such penalties.

If you have any questions, contact Regina Hopkins via email or Darryl Maxwell via email at the D.C. Bar Pro Bono Program.

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