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If you’re hoping to form an LLC or corporation in the United States, you’ve probably come across the term “registered agent”.
What’s less common is a clear definition of what this term actually means!
You may be wondering, “What is a registered agent? How do I get one? Do I really need one?”
If so, you’re in the right place!
This article will break down the basics of registered agents and everything else you need to know about them before establishing your company.
- A registered agent is the primary point of contact between a business and the government, or any person filing a lawsuit against them.
- It is a legal requirement in the United States for an LLC or corporation to have a registered agent.
- A registered agent must be available at the listed address during all business hours, no matter what.
- You can hire dedicated registered agent businesses to make sure your documents are received properly and passed on to the right person within your business.
What is a Registered Agent?
This can be an individual such as yourself, your lawyer, or a manager at your business, or it could be a separate company that specializes in registered agent services.
In simple terms, a registered agent is the primary point of contact for official communications with your business.
These include government documents as well as legal notices if your business faces a lawsuit.
Once a registered agent receives these communications, it’s their responsibility to forward them to the proper person at the business in a timely manner.
Sometimes, the term used can vary between states. A registered agent may also be called a resident agent, statutory agent, agent for service of process, or a registered office.
Why does my LLC need a registered agent?
The short answer to this is that it’s legally required by the U.S. government for all LLCs and corporations to have a registered agent.
Businesses are also required to keep this registered agent information up to date and to find a new agent if their current one becomes unavailable.
Not having a registered agent can lead to a variety of fines, and penalties, and could even get your right to operate your business suspended by the state.
Basically, having a registered agent isn’t optional. Besides the legal consequences of not having one, it’s also just a good idea to have a registered agent for your business at all times.
The biggest purpose of this role is to be “on standby” to receive important communications immediately and be able to pass them along with speed and urgency.
This means they must be available at the registered agent’s address during all business hours and are not able to leave the state that your business resides in without appointing a new registered agent during this time.
Without a registered agent, important documents may be missed, lost, ignored, or misunderstood.
If this happens with some things, it could be catastrophic!
For instance, missing a court summons could lead to a lawsuit against your business being decided without you having any opportunity to defend yourself.
Alternatively, a government notice may be ignored and lead to you unknowingly violating a legal requirement, and facing a monetary or criminal penalty as a result.
Registered Agent Requirements
It should be noted that the legal requirements for a registered agent aren’t overly strict.
However, just because a person can legally be your registered agent doesn’t mean they’re a great choice.
To begin, let’s break down what a registered agent must be:
- A registered agent must have a physical address, not a PO box.
- This address must be within the state that the business is registered in.
- The agent must be physically present at this address during all business hours.
- A registered agent must be an individual resident of your business’ state, or a business entity with a qualified office in the state.
- Your own business cannot act as its own agent.
- If you expand to other states, you must have a registered agent in each of them.
Why do you need a registered agent?
Based on these requirements, it might be tempting to make yourself, one of your employees, or someone like your business’ attorney your registered agent.
However, this isn’t always the best idea.
A registered agent must be at the registered address during all business hours. This includes quickly popping out for lunch or during your yearly summer holiday.
Making yourself or your employee a registered agent can complicate things once someone falls ill or wants some time off.
Employees, owners, and attorneys will also have a plethora of other duties to take care of.
It can be easy for important communications to be misplaced or lost. If your registered agent’s address is the same as your business’s main office, it can be confusing for those delivering highly sensitive documents.
It’s critical that these important notices are handed to the right person rather than a random employee.
Having a designated, separate office acting as your registered agent ensures that these crucial communications get where they need to be and don’t fall into unauthorized hands.
Finally, a registered agent is where a service of process is delivered. This is the document that provides notice that a lawsuit has been filed against an individual or business.
Usually, this includes a summons, often accompanied by a complaint. This is normally delivered by a process server or law enforcement officer, such as a sheriff.
Having law enforcement walk into your place of business can be embarrassing, to say the least.
It’s a quick way to start rumors and gossip, which is the last thing you need when you’ve just been served with a lawsuit.
This is where dedicated registered agent businesses are a great option. They often operate nationwide, meaning they have offices in any state you may expand to in the future.
They’re also guaranteed to be in-office during all business hours, and will always forward your documents quickly and with proper protocol.
Additionally, they keep this separation between your main business and your official government and legal proceedings.
With this being their only role in your business, communications won’t get lost amidst a flurry of other work responsibilities.
Finding Your Registered Agent
Congratulations on making it to the end of this article! Hopefully, you’ll now understand the essential nature (and legal requirement) of having a registered agent for your business.
It’s never too early to find a dedicated registered agent for your business to protect yourself and your organization.
What does a registered agent do?
Registered agents act as the primary point of contact between a business and the government or any entity filing a lawsuit against them.
The registered agent receives all important communications and passes them on to the proper person at the business in a timely manner.
Should I be my own registered agent for an LLC?
This is allowed, but not ideal. A registered agent must be present at the registered address during all business hours.
Additionally, legal summons are delivered to them – often by law enforcement – which can be problematic and embarrassing if delivered to a personal address or primary business office.
How to change your registered agent?
To do this, you should file the paperwork required in your state – typically a Statement of Change of Registered Agent form or similar.
Then, you need to update all of your LLC records with the new information.
What happens if you don’t have a registered agent?
Having a registered agent is a legal requirement for LLCs and corporations in the United States.
Therefore, if you don’t have one, you may face legal penalties up to and including the removal of your right to do business in your state.
It also creates the risk of missing important government and legal communications.