The Importance of Updating your Credit Union’s Statutory Agent

By Matthew Young, Attorney

At least a couple of times a month, a credit union will reach out to me with a summons or other court pleading which was directed to a former employee or retired/deceased board member.  Commonly, the credit union will indicate it has no idea why the court pleadings were submitted to this person, who is no longer affiliated with the credit union. In almost every one of these cases, the reason for this seemingly random document delivery is that, unbeknownst to the credit union, this retired or unaffiliated individual is listed as the current statutory agent of the credit union with the Secretary of State.

A statutory agent is someone that a company designates when it files for incorporation, via its articles of incorporation, within the state in which it is doing business. A statutory agent is responsible for accepting “service of process”, essentially accepting service of official and legal documents on behalf of the registered business and notifying and presenting the documents to the principals affiliated with the business (often the same people). These agents are also responsible for accepting other important communication from the state such as renewal notices for your business’ registration. Under Ohio law, and commonly required in most states, the registered agent must be located in the state in which the credit union is registered. In addition to identifying this state resident or corporation, an accompanying physical street address must be provided.

While this entity is originally designated with the Articles of Organization / Incorporation’s filing with the State, in certain cases, agent information must be updated/changed. To change this entity, a statutory agent update form must be completed and
accompanied with the appropriate filing fee to the Secretary of State. If the statutory agent information is not properly updated, a variety of problems can arise for your credit union. For example, if your credit union is sued and your statutory agent is either unable to be served at the address provided or otherwise unable to be served an adverse judgment an order can be entered into against the credit union. Moreover, the state of incorporation could also take certain adverse action for failing to keep the Secretary of State updated as to your statutory agent’s current identity and address.

By periodically reviewing your agent’s information and updating it with appropriately accurate information, you can avoid the negative outcomes described above and the accompanying costs incurred to deal with such situations. Most importantly, your credit union must always be aware of who its designated agent is and make the necessary updates when your agent moves or becomes disaffiliated with your credit union.

If you need further information or assistance in designating and filing your statutory agent information with the State, please feel free to contact me at 216.739.5726 or via email at myoung@weltman.com.

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