What is a Registered Agent?
A registered agent is a person or business entity that performs a legal service for LLCs (limited liability companies). They work on your LLC business’s behalf to receive service of process notices, official mail, and other legal and tax documents.
State law requires that all LLCs have a registered agent. However, specific requirements vary by state as well.
When you need a registered agent
As you go about starting your LLC or corporation, you’ll find that you need your own registered agent fairly early in the process. This might be you, or you may need to appoint one.
Different states have different requirements in terms of formation documents, filing fees, and the overall process of appointing a registered agent. However, a general list of steps can be followed in most states.
- First, business owners must choose and reserve a business name.
- Next, they must choose a registered agent, prepare their operating agreement, and file their Articles of Organization or Articles of Incorporation with the Secretary of State. These documents should be filed with the state where you plan on doing business.
- A certificate will then be issued to your newly formed company, and you can begin conducting business.
Who needs a registered agent?
All LLCs needs to have a registered agent. Corporations and other formal business entities must have them as well. The requirement begins as soon as you register your small business with the state.
You will need to have the name of your business chosen and have filed your paperwork. Then, you can get your registered agent’s name and physical address on public record as well before you start doing business.
Registered agent requirements
In order to be a registered agent (also called a statutory agent or a resident agent) in good standing, you must:
Be a resident of the state where the business is registered
Have a physical office address in the state
Be available during normal business hours
Be over the age of 18
The registered agent’s address cannot be a P.O. box. It can, however, be a home address and does not have to be the same as your business address.
Other requirements may be in place as well. This usually depends on the state. In some states, for instance, only someone who is part of a business’s management team can be a registered agent. Other states require the registered agent to be a licensed attorney.
Likewise, most states require that registered agents are available during normal business hours. And age requirements are sometimes in place as well.
Why use a registered agent service
Below are some of the benefits of choosing a registered agent service to be your small business’s professional registered agent:
You’ll have more time to focus on your business.
If you can give the responsibility of being a registered agent to someone else, you can spend more time focusing on improving and growing your business.
You’ll have more privacy in the event that legal documents are served to your business.
For multiple reasons, it’s possible to have service of process documents delivered to your business. In many cases, business owners don’t want to have these legal notices (which are often brought by police officers) delivered to their place of business.
Having someone else act as your professional registered agent means that any service of process or other important documents will be delivered to the registered agent’s street address.
You’ll stay compliant.
Being in compliance with state and federal guidelines, deadlines, and other regulations will keep you from having to pay costly fees and penalties. It will also help keep your small business in good standing.
There are a multitude of other reasons to use a professional registered agent service:
- You’ll be able to incorporate your business in states other than the one you operate out of.
- You’ll disassociate your home address with your business if your business is home-based.
- You’ll ensure your legal documents and all business mail is private.
- Even if you travel frequently, you’ll make sure you receive all legal documents and mail.
How the process works
If you plan on being your own registered agent:
Here are the steps you will need to follow:
- Be the correct age for your state (usually over the age of 18).
- Have a street address in your state (or the state where you plan to register your company and conduct business).
- List your name under the registered agent information on your formation documents.
If you plan to use a registered agent service:
These are the steps you must follow:
- Locate the registered agent service you want to work with.
- Contact them and/or sign up directly with them (after ensuring they meet all state requirements).
- Pay upfront fees where necessary.
- File your formation documents, and list the registered agent service as your registered agent.
Recommended registered agent services
Your registered agent is integral to your business formation. It’s got to be a person or entity that you trust and someone who will receive your business’s notifications and handle all business mail.
If you do not feel comfortable being your own registered agent, you might consider hiring a company that offers these services for an annual fee. As noted above, registered agent services provide a multitude of benefits; however, there are many options to choose from, so it can sometimes be difficult to know who to hire.
Below are several recommended registered agent services to consider.
Registered agent costs
It is free to designate yourself as your business’s registered agent. It is also free if you designate a member of your management team or another employee as your registered agent. Whomever you choose must meet state and federal guidelines, however.
If you use a professional registered agent service, there will be additional costs. These may vary depending on several factors, but most of the time, you can expect to pay anywhere from $50 to $300 to a professional registered agent service each year.
Often, if you plan on incorporating with the same company, you can get your registered agent services free along with the purchase of your incorporation services for the first year. The cost for registered agent services generally go up for subsequent years, however.
What is the difference between a registered agent and a proctor?
Registered agents have just one job. They are to accept service of process notices, official mail, and other legal and tax documents on behalf of your company. They are not able to perform any other duties. On the other hand, a proctor may be entrusted to perform other tasks or duties on behalf of you or another employee.
How do I choose a registered agent?
Choose a responsible party to be your registered agent. Not only will they need to accept legal documents and other business-related mail on your company’s behalf, but they will also need to be prompt about getting these documents into your hands. They should have a good reputation, be prompt and reliable, and charge a reasonable annual fee for their services.
What are the risks of being your own registered agent?
Some risks of being your own registered agent include not being present at your company address when important mail is delivered. Likewise, you absolutely must update your contact information with the Secretary of State regularly. Finally, you must be prepared to act immediately on any mail that your business receives. Subpoenas and other important legal documents are time sensitive.
What makes a good registered agent?
The best registered agent will field your business documents promptly and will immediately notify you when you have a new piece of mail. They will be reliably at their designated address (during normal business hours) and will have a quick and easy way of telling you that you have new business documents to look at.
What if I don’t want to use my address for my LLC?
If you don’t want to use your address for your LLC, consider using a registered agent service. This will make the address of your registered agent service the destination address for your business and will keep business-related mail separate.