What Is a Registered Agent?
A registered agent is a person or organization that has been appointed to receive legal notices, tax documents, and other government notices on behalf of a business. States generally require that corporations, limited liability companies (LLCs), and certain other business entities name a registered agent with a physical address in their formation documents.
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- If your business operates through a post office box, a registered agent will serve as a physical address to deliver legal documents.
- The owner or manager of a business can serve as its own registered agent so long as that person has an in-state physical address and can receive documents during regular business hours.
- Using a service as a registered agent can help you maintain your privacy if you run your company from home and do not want to disclose your home office address on public records.
- While it may be tempting to stop paying for a service after your company has been registered, failing to have a registered agent in good standing could lead to legal problems, penalties, and fines.
Understanding Registered Agents
When you register a business with your local Secretary of State in your state, you are usually required by law to designate a registered agent who provides a physical address where legal documents can be delivered. In some states, these are known as resident agents or statutory agents. It is essential that someone is available at your agent's address during business hours to sign for legal documents when poof of receipt is required.
Generally, states require corporations, LLCs, limited partnerships, and limited liability partnerships to have a registered agent. Additionally, your company must have a registered agent in each state where it is doing business. Some registered agents operate in multiple states, allowing you to use a single service that will accept deliveries of all of your essential documents.
Since secretaries of state don't let companies register using a PO box as a business address, a registered agent also helps protect the privacy of business owners operating from their homes. Many of the documents required to register a business are publicly available, and using a registered agent keeps business owners from needing to list their home addresses.
Finally, if you name a new registered agent, you must provide information on the new agent to the secretary of state's office, and the state may charge additional filing fees.
Can You Serve as Your Company's Registered Agent?
Most states let a business name an owner, manager, or employee as a company's registered agent. Using in-house staff as a registered agent is usually more cost-effective than hiring an outside service. Still, if you are operating your business out of your home, there are several significant drawbacks, including:
- Potentially missing the delivery of important documents if you are out of the house for long stretches during the workweek.
- Receiving documents at your home may result in you being served with a lawsuit while you are with friends or customers.
- If you move to a new residence or open an office, you must register the new address. There is a chance you will miss essential deliveries in the period between the move and the time the new address appears in state records.
What Happens if You Don't Have a Registered Agent?
Business owners who have contracted with a registered agent service while starting up are sometimes tempted to save money by dropping the service once it is up and running. Failing to maintain a registered agent can cause significant issues for a business. Some states will revoke its status as registered and leave the business owners open to liability for the company's debts. Additionally, the state may impose penalties and fines for failing to have an agent.
Not having a registered agent will also leave your business at risk of not having someone available to accept service of process for critical legal matters or court subpoenas. Failure to timely respond to service of process will often result in a default judgment against your company.
Additional Questions About Registered Agents? Contact an Attorney
A local business attorney has experience with helping companies determine whether they need to hire a registered agent and which service will best meet the needs of your business. Finding a quality registered agent is an essential step in forming many companies, and an experienced attorney can help walk you through the process of finding an agent.
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