What is a Registered Agent?
When you form a business, there’s a lot of paperwork to fill out. One of those documents, known as Articles of Organization, asks you to name a registered agent. While the title might sound formal, a registered agent is simply a person who accepts documents on your business’s behalf. There are a number of ways to choose a registered agent and ensure you are in compliance with your state’s laws.
What is a registered agent?
A registered agent is an individual or entity who is appointed by a business, usually an LLC or corporation, to receive correspondence on its behalf.
This can include the service of process documents, government correspondence, or compliance notifications. Most states require a registered agent to be named when forming an LLC, partnership, or corporation; any business where the organization is a legal entity separate from the owner.
A registered agent is also sometimes referred to as a resident agent or statutory agent.
In 2006, a law was passed called the Model Registered Agents Act. This act creates two classes of registered agents, commercial and non-commercial, and lays out their responsibilities and statutory requirements. According to the MoRAA, the three main reasons for registering an agent are to: receive service of process, determine the venue for any legal action, and to publish notices required by an entity’s organic law. While only 12 states have fully adopted these laws, others have adopted at least portions of MoRAA.
What is the purpose of a registered agent?
In practical terms, a registered agent’s purpose is to receive official mail and documentation on behalf of your business. By using a registered agent instead of a traditional mail system, the government is able to ensure documents are received and hold the business accountable for any necessary follow-up.
The agent helps your business maintain corporate compliance, informing you of things like legal notices or reminders to file your annual report. A registered agent is essentially a gatekeeper for business entities, ensuring all communication takes place.
The majority of what a registered agent receives will be tax forms, legal documentation, and government correspondence like an annual report. Less commonly, they will also be the person to receive any service of process, or a summons, to notify you of a lawsuit pertaining to your business. This ensures the business can be served properly.
When the paperwork is brought to the registered agent, they must accept it in person and sign to show they have received it. They are then obligated to forward it to the client.
Which businesses need a registered agent?
Any business that registers with the state as a legal entity will be required to name a registered agent as part of that process. This includes small businesses that are LLCs, partnerships, and corporations, and it also includes nonprofits.
The one business type that does not need a registered agent is a sole proprietorship. Because these businesses are considered legally the same entity as their owner, the owner would automatically receive all information in their name. Sole proprietorships often do not have to register with the state at all and therefore do not require a registered agent to be in place.
Who can be a registered agent?
There are a handful of registered agent requirements that you must meet to fill the role.
Anyone can be a registered agent, so long as they are over 18 years of age, have a physical address in the state where the business was formed, and have availability during normal business hours. Provided these conditions are met, you can act as your own registered agent or appoint a family member or friend. An officer or member of the business is also a common choice for registered agents.
It is also possible to hire a professional registered agent service to act on your LLC’s behalf if you cannot or do not want to be your own agent.
All of the registered agent’s information is given to the state.
What are the benefits of having a registered agent?
Though it is a government requirement, having a registered agent also has benefits for business owners. A registered agent can help simplify processes and ensure you are in compliance with the law.
Some reasons a registered agent may benefit your business include:
- A corporate agent is available during regular business hours and sends any important documents to the owner in a timely manner.
- You will not be personally “served” with any legal documents, which can be embarrassing if it’s done near customers or employees.
- Vacations or travel will not prevent you from receiving documents and forms.
- Changing your business location (within the state) does not mean you need to change your address on everything.
- A corporate agent can serve as your point of contact and list their office as your business address, which can keep home addresses confidential.
How do you get a registered agent?
If you are going to be your own registered agent or list a person you know, there is nothing you need to do besides provide the appropriate information on your formation documents. You will list the registered agent’s name on your Articles of Organization or Articles of Incorporation if you’re a corporation and keep it updated.
Some people choose to use a commercial registered agent service instead of an individual. There are many services available, like Northwest Registered Agent or ZenBusiness, and you can choose one that meets your needs and your price range.
Should I have a registered agent service?
Designating a registered agent service for your business has a small cost, but it can also be a safer and more convenient option. There are a number of benefits to using these services.
In addition to accepting documents on your behalf, a registered agent service will also keep copies of all corporate documents. This includes reminders and filings that you are sent and should keep for future needs. In the case of theft, natural disaster, or other unexpected losses of documents, you will have a backup of these documents and remain in compliance with laws.
Convenience and flexibility
Having a registered agent service means one less thing you have to manage as a business owner. You can then focus your time, energy, and attention on other business needs, as well as maintain a balance between work and your personal life.
Registered agents are required to be available during all business hours. This means that going away for vacation or taking time off can be difficult if you may need to receive documents. A registered agent service will always be available to receive your documents so you can shift your schedule easily.
Do business across states
A registered agent must have a street address in the state where a business has been formed. This means your personal address can’t be used if you start working across state lines, or you would need a home in every state. Registered agent services are able to operate across all 50 states, so you can operate a business in a state other than the one where you live. If you have an LLC with locations in multiple states, you can use a service to have a registered agent appointed in each state.
Many registered agent services offer other services related to owning and operating a business. Some will include consultation, legal assistance, and can help with other business filings.
By state law, registered agents’ addresses are listed on the public record, whereas personal and office addresses are not listed. Using a registered agent service or another person can help shield your private information.
Commercial and non-commercial registered agents
When choosing a registered agent or a service, there are two formal designations: commercial and non-commercial. The two classes have the same responsibilities and requirements, but there are also differences.
Commercial registered agent
A commercial registered agent must file a special listing statement with the government agency responsible for a state’s business registrations and compliance. Doing so means that there is a streamlined flow of information between the registered agent and the secretary of state. Any information provided on the list includes information like the company name, entity type, and address where the service of process should be sent.
These agents maintain a physical address in multiple states, allowing them to work with many business entities at one time.
Businesses pay an annual fee for this service and often pay the state fees associated with filing documents too.
Non-commercial registered agents
Non-commercial agents are individuals like yourself or a trusted friend. It is common for business owners who are just starting out to name themselves as registered agent.
Choosing a registered agent service
If you do decide to outsource the role of a registered agent, it is important to be intentional in the service you choose. While the role may sound simple, a registered agent’s responsibilities are large. If they fail to properly share your documents or neglect their role, you can end up in a lot of trouble. For this reason, you should be sure to choose a reputable agent or service with a history of providing these services.
You can consider other factors when making this decision, like price or what may be included in a package. Many registered agent services also offer additional business formation assistance or support that you may find helpful. Premium features may be available, like same-day scanning, extensive document storage, and automated privacy features.
Many services offer a digital account where you can access your information in a secure portal rather than through one-off correspondence with individuals. You can choose to forego these additions if you don’t want to spend the money, but many people find them worthwhile.
It can also be good to look for an agent who can work in multiple states, especially if you are planning to expand or work in multiple states. Even if this is not necessary now, a service with this ability can prevent you from needing to switch providers down the line.
Along with features and pricing, you can take time to look for customer reviews for each service to help understand if they will meet your needs. While online reviews can sometimes skew overly positive or overly negative, looking at the general consensus and how a company responds can be helpful.
Can I change my registered agent later?
Yes, you can change your registered agent at any time. To do so, you can log in to your online account and file the correct paperwork with the government agency responsible for business records in your state. Some will charge a small filing fee, depending on the state, up to $50.
Do I need a registered agent?
Every state requires corporations, limited liability companies, and partnerships to name a registered agent. This role may have a different name, like a resident agent or statutory agent, but the idea will remain the same and be a requirement. Sole proprietorships do not need to have a registered agent.
Can a business owner be a registered agent?
The owner of any business can act as the registered agent in any state, as long as they meet all other conditions, like being over 18 and having a physical address. Owners will need to take on the additional responsibilities and potential inconveniences of the role but may choose to save money this way.
Are registered agents held liable?
If a registered agent fails to meet their legal responsibilities, they can be held liable for damages on behalf of the company or the government. This can happen if they do not inform a company it is being sued or provide notice of legal requirements.
What is a commercial registered agent?
A commercial registered agent is a person or entity that is registered with the state and has filed a commercial registered agent listing statement through the Secretary of State or registered office. The procedures for this are laid out in the Model Registered Agent Act. These agents typically serve many clients across states.
Is a registered agent the same as a virtual office?
No, a virtual office is a service that allows businesses to receive mail and conduct business in a location outside of the business’ formal service. Registered agents only act as the recipient of certain forms and documents, like subpoenas, not regular mail.
Are there free registered agent services?
Being your own registered agent or having an employee or loved one act as the registered agent is free. However, if you want to use a registered agent service, there will always be a charge. Some companies offer this service free as a part of a larger package for business formation services.
What are the requirements to be a registered agent?
In all states, a registered agent must be 18 years or older, have a physical address in the state where the business was formed, and be available during all normal business hours. Some states have additional requirements, but these are universal.
What if I don’t have a registered agent?
You will typically not be able to form a business without supplying information for your registered agent. However, you will have to update this if the information changes. Failing to do so can lead to your business losing good standing with the state or leave you responsible for penalties and fines for legal obligations you have missed.
What kinds of documents does a registered agent receive?
Registered agents do not receive all mail on behalf of a business. They will be responsible for accepting tax forms, legal documents, government notices or paperwork, and summons or service of process. They can also receive notice of garnishment proceedings against an employee or litigation documents during the course of a lawsuit.
Things like bills and junk mail go straight to the business address or owner.
Can a P.O. box be my registered agent address?
No, a P.O. box cannot be used as the registered agent address. A person must accept and sign for all mail sent to a registered agent- it cannot be left in a P.O. box. Your business license also cannot use a P.O. box as a physical address.
Why do I need a registered agent?
Registered agents are a requirement for any legal entity being formed in every U.S. state. In addition to meeting these criteria, a registered agent is necessary so that the government can ensure businesses receive all critical correspondence. This provides accountability for businesses and simplifies communication. Failure to have a registered agent can result in penalties or dissolution of legal status.
Which states require a registered agent?
Every state requires you to designate a registered agent for your business during formation. The exact requirements differ slightly, but there is no state that does not require some kind of official contact for a business.
What is service of process?
One of the main roles of a registered agent is to accept the service of process. This is time-sensitive legal paperwork that informs your business of a lawsuit. There are specific rules as to how and when to serve service of process, which includes the ability to deliver them to a registered agent on behalf of a business.