Forgetting to update your Limited Liability Company address (or failing to monitor your mail) can become a problem when someone files a lawsuit against the LLC and serves the papers on the Secretary of State. The Secretary of State will notify you of the lawsuit by mail and that notification starts the time to answer the complaint. If you moved away and didn’t change your address or if you don’t check your mail for weeks, you run the risk of missing the mailing and then being late in answering the complaint.
This recently happened to a defendant in 6 Crannell St. LLC v. Urban Green Equities, LLC. A lawsuit was started against an LLC and service was effected only by service of the LLC on the Secretary of State in Albany. The Secretary of State mailed a notice of the lawsuit to the LLC but nobody was in the office because of covid and everybody worked from home. The time to answer passed and the plaintiff got a default judgment. Defendant eventually found out and made a motion to vacate the default judgment. Such a motion required the defendant to show that it has a reasonable excuse for the default and a potentially meritorious (one that would stick) defense. Luckily for the defendant, the judge excused the default because of Covid and found that defendant had a defense likely to have merit. Plaintiffs appealed this decision and lost, see that decision here.
You never want to be in that position. The legal fees to file the motion to vacate and then go through the appeal must have been steep. And having to prove that you have a good defense is not that easy after all. It is easier to monitor your mail and change it when the address changes.
Wait, the LLC can be served official papers in Albany?
Yes, pursuant to Section 303 of the New York Limited Liability Company Law, service of process can be made on the Secretary of State who sits in Albany. “Process” means “all orders, demands, notices or other papers required or permitted by law to be personally served on a limited liability company or foreign limited liability company, for the purpose of acquiring jurisdiction of such limited liability company in any action or proceeding, civil or criminal, whether judicial, administrative, arbitrative or otherwise, in this state or in the federal courts sitting in or for this state,” (see Section 102 (x) LLC Law) in short, a complaint is process.
How does Albany know your address in the first place? When you form an LLC you have to give an address to which the Secretary of State would mail this process if it ever happened, see Section 301 LLC Law. Look in your articles of organization. It usually says something like:
The Secretary of State is designated as agent of the limited liability company upon whom process against it may be served. The address within or without this state to which the Secretary of State shall mail a copy of any process against the limited liability company served upon him or her is: ______________
How do you change the address for the LLC?
It is very easy. You make a filing with the Secretary of State called a certificate of amendment, since you will be amending your articles of organization with respect to the address. All the explanations you need and the forms are on their website, see here.