If you are a small business owner and planning to be a legal entity such as a limited liability company (LLC) or a corporation, then you must have started preparing Articles of Organization/incorporation, Operating Agreement etc. However, do you know that you will also be needing a registered agent while legitimizing your business?
Yes, most states require you to nominate a registered agent for the state correspondence on your business’s behalf. But what is a registered agent, and whom to appoint? This article will help you decide the most appropriate registered agent for your business.
What Is a Registered Agent?
A registered agent is a person or entity designated by your business to receive service of process notices, government correspondence, official mails, and other compliance-related documents on behalf of your business.
A service of process is a legal procedure in the USA, declaring all parties must be notified when facing legal action against them in an administrative court or a court of law. It is done by delivering a series of documents outlining the legal action. The service of process documents include complaints, lawsuits, subpoenas, summonses, writs, and other court documents.
A registered agent is also known as a statutory agent or resident agent. Soon you choose your business structure; you need a registered agent as you have to mention the name and address of your registered agent while filing your Article of Organization with the state.
When Do You Need a Registered Agent?
You need a registered agent if you plan to register your business with the secretary of state or similar government agency as any of the following entities:
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP).
- Limited Partnership, or
Purpose of a Registered Agent
A registered agent is beyond someone just receiving mails; rather, a registered agent is to help your business stay compliant by informing you of legal notices or sending you reminders of annual report filing or other important deadlines.
Your designated registered agent receives the following documents on your business’s behalf:
- Official mails
- Legal documents
- Tax forms
- State/government correspondence such as annual report
- Service of Process – Summons or notice of a lawsuit
Registered Agent Requirements
Following are the requirements that must be met to be eligible to be a registered agent;
- A registered agent must be 18 years of age or older
- A registered agent must be a resident of the state where you wish to register your business.
- A registered agent must be available during regular business hours
- A registered agent must have a physical address (street address usually) to which documents can be delivered.
- In most states, P.O. mailbox can’t be used.
Designating Yourself or Another Member of Your LLC
It seems pretty tempting to designate yourself as your business’s registered agent and give your home address. Of course, why won’t you consider it as it is the most straightforward and convenient option? However, Moneyaisle does not recommend you to be your registered agent for the following reasons;
- Since a registered agent must always be available to receive the important documents, this means you must always be present at the physical address you registered during regular business hours.
- If you can’t be found at that address for several reasons, such as you go off-site to attend a meeting with a client or away for business dealing or take holidays, then document delivery can’t be made. So, in case you did not get such documents timely, the consequences can be quite severe.
- The registered agent’s address is made public in the business registration documents. Using your home address as a registered agent’s address can breach your privacy, or you can get too many junk or spam mails.
- Using the address of your place of business may harm your reputation as receiving lawsuits in front of your customers or clients is not a good omen.
- If you move your business or home to another place, you’ll have to file a change of address for your registered agent.
Professional Registered Agent Services
Moneyaisle recommends professional registered agents as with such services you get rid of all the tensions mentioned above. Moreover, you have the assurance that all important documents will promptly be delivered to you. You will get important filing reminders in a timely manner. Hence, with a registered agent, you can enjoy;
- Privacy: no spam and junk mails, and your address remains private
- Peace of Mind: No missing of filing deadlines or skipping any important document
- Flexibility: Don’t have to worry about the availability during business hours
- Good standing with the state by staying compliant with the Law
To save you from the hassle of finding the best registered agent service, Moneyaisle reviewed the top professional registered agent services available online and shortlisted 6 best Registered Agent Services for you.
What Happens if You Don’t Have a Registered Agent?
Generally, most states require you to designate a registered agent while registering your business. A registered agent is not an address that is needed for the filing purpose only. If you do not maintain it or do not inform the change of address or change of registered agent to state, you may face the following consequences.
- The state sends compliance instructions to your business. Since you did not update the address, you will miss these instructions, and your business may no longer be considered in good standing with the state. Moreover, your business may be subjected to penalties and fines.
- You will also not be receiving service of process or other necessary correspondence which requires a response. For instance, if you do not receive service of process regarding a lawsuit. So, you would not prepare in a timely manner or even may remain unaware that you’re being sued. You likely would not show up at the court proceedings, and a default judgment could be issued against you.
While a registered agent performs a primary and simple function, it’s also a critical one. Selecting a professional registered agent service can perform this function with perfection. You get alerts of important deadlines, get all the correspondence and essential documents promptly, and stay in good standing with the state. This decision can guarantee security to your business and peace of mind to you.
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