Understanding what it means to be ‘served’ can feel intimidating for small business owners, but it does not have to be. Whether it’s a lawsuit, a subpoena, or an official notice, knowing what to expect and how to handle service of process properly can help you avoid costly mistakes and, in turn, protect your business.
What is Service of Process?
Service of process is the formal method of delivering legal notice to a person or business that a lawsuit has been initiated against them. There are strict rules that can vary by state on who can be served, when, and how the service must be performed. These include personal delivery, US Mail service, and service upon an agent. Courts require plaintiffs to arrange for defendants to be served with a court summons and a copy of the plaintiffs’ complaint. These papers are collectively called process.
- Did you know? You (the plaintiff or petitioner) cannot be the person to hand the documents to the other party. This is because if there is a question about whether or not the other person was actually served, the judge will want to confirm with a third party, someone other than you, that service actually happened. (womenslaw.org)
- Did you know? Even home-based businesses can be formally served with legal documents. (That’s why a registered agent is preferred!)
- Did you know? You can take a breath! Some service of process involves documents that simply request information or records, not court appearances or financial penalties.
Can Anyone at My Business Accept Service of Process?
Typically, legal documents are delivered to a specific person associated with the business. This might include:
- The business owner
- An officer or manager
- A designated registered agent
Many small businesses rely on a registered agent to reliably receive documents, particularly during business hours. This ensures that service will not be missed if the office is closed or on vacation.
- Did you know? Different states follow different rules about who is allowed to receive legal papers on behalf of a business.
- Did you know? If the wrong person at your business accepts legal papers and they are misplaced, your company might still be treated as if it were properly notified. So, creating a clear internal process really matters.
What Happens When Your Business Is Served
In a small business, so much is going on, and often with a small staff. Missing or mishandling legal documents can create bigger problems down the road. Small businesses can get into trouble not because of the legal issue itself, but because of how the service or process is handled.
Once your business is served, the clock starts ticking on your time to respond. Deadlines are tied to these documents, and failing to respond on time could inflict penalties or, worse yet, a default decision. Even if it seems minor, taking it seriously is important. If you are unsure, contact your attorney for assistance with reviewing the documents and determining how to proceed.
- Did you know? Keeping a simple log of when your business receives legal documents can help you stay organized and reduce stress.
- Did you know? A default judgment is a binding court order issued in favor of the plaintiff when the defendant fails to respond to a lawsuit or appear in court. Because the defendant forfeits their right to defend the case, the plaintiff automatically wins and is usually awarded the full amount of damages requested. (Cornell Law School)
The Role of Your Registered Agent
A registered agent is a person or an organization appointed by your business, whether it’s a corporation, nonprofit, or LLC, to handle important documents like legal notices, tax information, and other correspondence. Having a professional registered agent means you have a reliable, documented source to receive important legal and compliance notices promptly and securely.
- Did you know? Using a registered agent so documents do not get lost in the daily mail, and keeping a simple log of when your business receives service of process, can help you stay organized and focused.
- Did you know? The registered agent adds an extra layer of privacy by keeping your personal residence separate from your main business address.
What happens when your company is served with legal documents, and how to handle them properly.
Having a plan can make a big difference. It doesn’t have to be fancy; just a dedicated file or electronic folder or corporate kit to keep all legal documents, due dates, and notes, ensuring you are prepared.
Having a registered agent can be a game changer! When you are ready to simplify how your business handles important legal and government notices, contact us to learn how we can make the process easier and more reliable for you. And as always, get in touch with an attorney or accountant for legal and financial advice.
Resources: Cornell Law School, womenslaw.org, Cornell Law School