Do I Need a Registered Agent for My Business?
What is a Registered Agent? What Do They Do?
When you register your business with a state, one of the required bits of information is the name and address of your business's registered agent. This information is important, so don't leave it out. You can put down your name and address as a registered agent, but it's much better to hire someone. This article explains why having a registered agent is a good idea for your business.
What is a Registered Agent?
Every U.S. state requires businesses that register with a state as legal entities (LLCs, partnerships, corporations) to have a registered agent. This registered agent, sometimes called a statutory agent or agent of process, must have a business address in the state. The registered agent is the person who is designated to receive federal and state legal documents and service of process (a summons or subpoena, for example).
The cost of a registered agent service varies, but you might expect to pay between $125 and $200. Some registered agents provide additional services for additional cost, such as filing documents, notifying businesses of upcoming events like an annual filing or a franchise tax filing date.
What a Registered Agent Does
I talked with one registered agent service, Northwest Registered Agent LLC, and found out:
- Registered agent services began as part of due process in the U.S. Constitution. Due process includes having the legal right to be notified of a lawsuit or other legal matter.
- Registered agents are required by the states to be open during all business hours (9-5 and Monday to Friday, usually) and year round.
- When someone wants to serve process against a company notifying them of a lawsuit, they do this in person. So, serving a notice against a business means going to the office of the registered agent and presenting a document. All documents are served in person.
- The registered agent then sends an email to the business, with a copy of the document that can be uploaded. The notification to the business is instantaneous.
- If the registered agent sees that the email hasn't been opened, it will continue to send emails. In some cases, if the email isn't opened and the document isn't read, the document will be sent by mail.
- If the registered agent receives something that requires a signature, the document will be mailed immediately.
While this doesn't sound like a big job, it's important that businesses be notified of impending legal actions as quickly as possible.
Benefits of Having a Registered Agent
A registered agent can be a benefit to your business in several circumstances:
- If you have a PO Box as the mailing address for your business (federal and state notices can't be sent to a PO Box).
- If you don't want the embarrassment of being served legal documents in front of employees or customers.
- So you don't need to worry about missing important documents while you are on vacation or if you travel frequently.
- If you change your business location (within your state), you don't have to file a registered agent change with your state.
- If you do business in multiple states, you can use the registered agent service in all those states (with a different in-state address for each).
- You won't be in danger of having fines or penalties imposed if you miss a deadline, and
- You won't be in danger of falling out of good standing with your state.
What a Registered Agent Doesn't Do
Diane Kalinowski of MyLLC.com notes:
Just so you know, a Registered Agent is not someone that would receive and forward your mail. They are there to receive process of service, which are court papers if your entity was to be sued. It has nothing to do with mail and most Registered Agents don’t accept mail for their clients and forward on without an additional fee and most of the time not at all.
Before You Sign Up with a Registered Agent Service
You can find many registered agent services if you do an internet search. Some things to do before you decide on a service:
- Find out what's included in the service and what is extra.
- Find out where the office in your state is located. Many services have offices in the state capital. The RA service must tell you where the office is, so you can include that information in the registration with your state. Make sure it's a legitimate business location.
- Talk to someone with the service, and ask questions. If you can't get a reply, question whether the service is legitimate.
- Read reviews. Before selecting a service, I checked it out on Google+.
In short, if you have yourself as the registered agent for your business, think again. You might decide it's better to have a registered agent service perform this task.
When You Don't Need a Registered Agent
Registered agents only deliver during normal business hours, so if your business is always open and there's always someone there to sign for delivery of service, you might be able to spare yourself the expense and just list yourself as the registered agent.