Having trouble reading this e-mail? Please follow this linkhttp://www.yourentitysolution.com/Education/WeeklyOutreach/tabid/863/Default.aspx
Please add us [ admin@yourentitysolution.com ] to your email address book.
October 28th, 2009
This Happens in Big Companies Too!
Recently I sent you the story of a client who ended up spending thousands of dollars because he chose the wrong Resident Agent. Today some of you may have seen the story of PepsiCo Inc. that argued it was improperly served with a Wisconsin lawsuit in North Carolina. This story is courtesy of Lynne Marek, the National Law Journal. For the original article, click here http://finance.yahoo.com/news/Price-to-PepsiCo-for-Not-law-3214509113.html?x=0&.v=1
PepsiCo was handed a $1.26 Billion default judgment for failing to appear in court. The damages award was handed down on September 30th; PepsiCo said it wasn’t even aware of the lawsuit until October 6th.
How could this be? Well, PepsiCo claims that it first received a legal document related to the case from a North Carolina agent on September 15th when a copy of a co-defendant’s letter was forwarded to the Deputy General Counsel in PepsiCo’s law department. The Counsel’s secretary put the letter aside without telling anyone because she was busy preparing for a board meeting. When the secretary received a forwarded copy of the plaintiff’s motion for default judgment on October 5th, she sent that document and the letter she had forgotten about to the legal assistant for Aquafina matters. The next day the legal assistant sent the documents to a department attorney, who “immediately” called the agent to get a copy of the complaint.
Was the agent at fault for this little fiasco? No. The company was; and I am sure you can spot several lessons to be learned here. So, to conclude our discussion about resident agents, here are some things you need to remember.
1) The Resident Agent – also called a Registered Agent or Agent for Service of Process – needs to be around in order to receive the legal papers being served on the company. If you travel frequently or are just difficult to contact, you should consider hiring a professional.
2) The address you gave us as your street address is the one on public record. Anyone searching for the address to which they should deliver papers will find that street address. If you move, you normally have only 30 days to notify the proper authorities to change your address to your new location.
3) When you receive papers for your company, look at them immediately. Usually they will have a deadline for responding. In a lawsuit, you normally have 20 days to respond so you need to contact your attorney right away. If your company is in default because you did not file your annual report, you will usually have a few weeks or months to file before your company is dissolved.
4) If you move out of state, you need to find someone to replace you as the Resident Agent. The Resident Agent must have a street address in the state where the entity is located to be valid. If you have a friend who is a professional with an office, such as a CPA or Attorney or Financial Planner, he or she might agree to be your Resident Agent. If not, you will need to hire a professional. We can help.
5) If you have a professional Resident Agent or have a friend or colleague who is filling this position, you must ensure that your contact information is up-to-date. Give your agent your email address, phone number, mobile number, fax number and home or office address. If papers are served, your agent will need to contact you immediately. Don’t make it hard for him or her to do a good job for you.
6) If you receive notice that your Resident Agent has resigned, you must find a replacement immediately. In many states, your company will be dissolved if you go more than 30 days without a valid Resident Agent. If you need help, remember to get on the Monday evening Q&A call.
We hope this list is helpful to you. You might consider keeping it in your Minute Book where you can find it if you need to.
To your success,
Wendy Byford + Gary Bauer