Question:
What is a Registered Agent?
Answer:
Whether you’re forming an LLC or corporation, you’re going to need a registered agent. A registered agent is either an individual or entity that has been assigned by a business to receive service of process notices, government documents, and compliance-related documents on behalf of the business. Most states require you to have a registered agent to accept legal documents on behalf of your business.
Why You Might Consider Hiring a Third-Party Registered Agent.
You need a registered agent for your business as they will be the ones receiving legal documents on your behalf. Theoretically, you or another member of your business can be the designated registered agent, but there are several disadvantages to that. You must be available during normal business hours to receive legal documents, you may receive a lot of unsolicited junk mail (because your name goes on the public record as the registered agent), and you may be served in front of your customers or clients (which can be embarrassing and probably not good for your business’ reputation.) More importantly, you can risk being fined or shut down if you miss any important filing deadlines.
That’s why it’s good to have a third-party registered agent designated as your business’s registered agent! They will always be available during normal business hours to receive notices and important legal documents, and they will be able to sort through the mail and forward you the important stuff. That way you can focus on running your business!
Additionally, if you move your business and you’re your own registered agent, you will have to file a change of address. But with a third-party registered agent, you can move your business all you like without having to change the address of the registered agent.
Why It’s Important to Make Sure Your Registered Agent is On It.
If you don’t maintain your registered agent once assigning, you could face some serious consequences. Your business may not be considered in good standing with the Secretary of State and could be subject to fines. You may even lose ability to bring suits or enter into enforceable contracts. Although registered agents provide a pretty basic function to businesses, it’s good to choose one that can sufficiently perform this function. Another reason to pick a third-party that is committed to ensuring your compliance.
Requirements for Registered Agents.
Your registered agent must be a resident of the state in which you formed your LLC or corporation. They must also have a physical address where the important documents can be mailed to, so P.O. boxes will not work. If you ever change your registered agent, you will need to file a form indicating the change with the Secretary of State. And don’t forget: if you want to change from one third-party registered agent to another, you’ll need to notify the first registered agent of your cancellation of their services! They may have specific paperwork they need for their records in order to do this, so reach out and ask, and plan for the time it will take to gather that paperwork.
To Wrap Things Up….
You need a registered agent for your business to receive service of process, important legal documents, and compliance-related documents on your behalf. Whether you decide to this yourself or you hire a third-party service, make sure you’re dedicated to compliance, because there are penalties for non-compliance! And nobody likes that.
As always, feel free to reach out to our team at bertie@inbetterwetrust.com if you have any further questions.