What Is a Registered Agent and Why Does Your Business Need One?
You can serve as your own registered agent but you might not want to
Every U.S. state requires that businesses located there must register as legal entities, such as LLCs, partnerships, or corporations. Your business must have a registered agent, sometimes called a statutory agent or agent of process, in order to do this.
A registered agent is an individual or entity who is designated to receive federal and state legal documents and service of process on behalf of your business. Service of process includes summonses or subpoenas and other notifications resulting from a lawsuit. A corporate director, an attorney, or a CPA can serve, or you can use a third-party organization.
The agent must be located in the same state as your business.
What Does a Registered Agent Do?
Registered agent services began as part of due process under the U.S. Constitution. Due process is the legal right to be officially notified of a lawsuit or other legal matter against you or your business.
Anyone serving process upon a company must typically do so in person. Serving notice against a business means going to the office or location of the registered agent and presenting the document. Registered agents are required by states to be open for business during all business hours—9:00 to 5:00 Monday through Friday, except holidays.
The registered agent will then email to the business with a copy of the document that can be uploaded. This should happen immediately.
The registered agent should continue to send emails if she sees that the initial email hasn't been opened or acknowledged. In some cases, the document will be sent by mail if it appears that the document hasn't been read. The document will also be mailed if the registered agent receives anything that requires a signature.
Some registered agents provide additional services, such as filing documents or notifying businesses of upcoming events like annual filings or franchise tax filing dates.
What a Registered Agent Doesn't Do
Diane Kalinowski of MyLLC.com notes:
"A registered agent is not someone who 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."
The Benefits of Having a Registered Agent
Federal and state notices cannot be sent to a P.O. box, and this is the only mailing address some businesses have.
You won't have to worry about missing important documents while you're on vacation or if you travel frequently, and you don't have to file a registered agent change with your state if you change your business location.
You can use the registered agent service in several states with different in-state addresses for each if you do business in multiple states.
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.
Can You Serve as Your Own Registered Agent?
No rule says that you can't serve as your own registered agent, but you might want to think twice about it. You must literally be available, at one location, during all business hours. You're effectively anchored to your desk when you serve as a registered agent.
Employing a third party to act in this capacity will cost a little, but doing so can spare you the conundrum of deciding which address to use and the embarrassment of unexpected "guests" arriving at that location. You might not want the embarrassment of being served legal documents in front of your employees or customers. And unless you're really on top of the rules governing registered agents and legislative changes, you might be better off using a third party.
The name and address of your registered agent will appear in public records. If you don't want your name and personal location a matter of record, you might want to farm this job out to someone else.
Before You Sign Up with a Registered Agent Service
You can find many registered agent services if you do an Internet search, but find out what's included in the service if you decide to sign on with one. Ask about any extra fees.
Many registered agent services have offices in the state capital. The service must tell you where the office is so you can include that information in your 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.