Purpose of a Registered Agent
A registered agent is the official point of contact between a company and the state government. They receive and forward important legal documents, like:
- Service of Process: Legal documents related to lawsuits or legal actions against the business.
- Government Notices: Annual report reminders, tax notices, and compliance-related documents.
- Official Correspondence: Any other critical communication from the state or federal government.
Who Needs a Registered Agent?
Formal business entities need an agent. Companies like corporations and LLCs are legally required to designate a registered agent when formed. This requirement ensures the state can reliably contact the business for legal and official matters. This applies to all states.
Requirements for a Registered Agent
- Physical Address: The agent must have a physical street address in the state where the business is registered. This is known as the registered office. Cannot be a P.O. box.
- Availability: The agent must be available during standard business hours to receive documents.
- Consent: The person or entity must consent to serve as the registered agent.
Choosing a Registered Agent
- An Individual: This can be an owner, an employee, or any other individual who meets the requirements. Must be at least 18 years of age.
- A Professional Service: Many businesses use a third-party registered agent service specializing in handling legal documents and compliance. According to Forbes, the average cost for a professional registered agent service ranges from $50 to $300 per year.
Benefits of Using a Professional Service
- Privacy: Using a service keeps the owner's personal address off public records, as the service's physical address will serve the requirement.
- Reliability: Professional services are always available during business hours to receive documents.
- Compliance & Experience: They help ensure the business remains compliant with state requirements by managing official correspondence and sending timely reminders for essential filings they have expert knowledge of.
Examples of Registered Agent Services
Many companies offer professional registered agent services, including:
These services provide expertise in managing legal and compliance documents, often for a yearly fee or fee per document. It's important to thoroughly research and compare providers before deciding which is right for your business.
Responsibilities of a Registered Agent
- Receiving Documents: Accepting service of process, tax forms, and other official notices.
- Forwarding & Sending Documents: Promptly send any received documents to the appropriate person within the business and send applicable replies before deadlines.
- Maintaining Records: Keeping accurate records of all correspondence and documents received.
Risks of Not Having a Registered Agent
Failing to authorize or maintain a registered agent can lead to serious consequences, such as:
- Loss of Good Standing: Good standing means the company has done everything the law requires to operate in that jurisdiction. If a business doesn't acquire a registered agent, it could fall out of compliance with state requirements.
- Missed Legal Notices: Important legal documents might not be received, leading to default judgments or other legal issues. The business might also not be allowed to file lawsuits against others.
- Monetary Penalties: The business could face fines or penalties, even compounding ones, for failing to comply with state regulations. Institutional financing may also be denied to companies without a registered agent.
- Lack of Expansion: The business may be unable to expand out of its original operating state, stifling expansion and potential revenue growth.
Changing a Registered Agent
If a business needs to change its registered agent, the process typically involves:
- Filing a Change Form: Submitting the appropriate form to the state's business filing office.
- Paying a Fee: A nominal fee might be required, depending on the state.
- Notifying the Agent: Inform a new registered agent and ensure they consent to the role (they've presumably been part of the change process, so this should cause no issues).
