Busting the Top Registered Agent Myths
In the United States, every legal entity must authorize a Registered Agent to receive important service of process documents, that’s the reality. But just as you don’t think about your insurance until you have a claim and find out you’re not covered, you may not give your Registered Agent a second thought – until you’re faced with paying thousands of dollars in fines or penalties. As compliance regulations are becoming more rigorous and complex, are you sure your Registered Agent is keeping pace? Here are 10 myths about Registered Agents and how choosing the right one can help you do business better.
The Registered Agent we use now was in place before I arrived, so it’s probably still working well.
Companies grow and evolve. You wouldn’t leave your legacy up to your predecessor, right? If you are new to your company, this is a good time to review the experience and capabilities of your Registered Agent to ensure they are still meeting the needs of the organization. As an example, take some time to assess how often your entities have been penalized for not being in good standing or have received a default judgment due to your agent’s failure. It may be time to switch to a Registered Agent with integrated and automated services that help reduce the risk of non-compliance.
Registered Agent services are all the same so anyone will do.
Not all Registered Agents are created equal! Regulations are becoming stricter and can change at any time. To stay on top of it, your Registered Agent should have the resources to handle the greater complexities and demands of today. You should rely on a Registered Agent who offers a wider range of services, such as an integrated entity management solution, data and document entry, and automated service of process alerts.
I never hear from my Registered Agent so I assume everything is fine.
Never “assume” anything, or so the expression goes. You may think that your annual reports have been filed on time but do you know for sure? If you miss the deadline you could be subject to late filing penalties and involuntary dissolution, meaning your company is no longer active in the state. A Registered Agent who offers a centralized platform with clear visibility into all data and documents will keep you informed in a timely manner, for added peace of mind.
There’s little to no advantage to outsourcing Registered Agent responsibilities.
You could act as your own Registered Agent – actually, no that’s not realistic. For one thing, you need a physical office location in every state in which you operate – post office boxes are not acceptable. Your business must be open in every location Monday to Friday from 8 a.m. to 5 p.m. You would also need to be familiar and stay up to date with the complexities of compliance regulations in every state, which can vary greatly. And, if you’re served documents in front of employees or customers it could be embarrassing!
Registered Agents are an outdated necessity.
Companies will always need to receive important legal and tax documents which means they will always need the services of a Registered Agent. Claiming you didn’t receive your service of process documents is not an option. In fact, as technology has made it easier for businesses to expand nationally, having a reputable Registered Agent may be more important than ever.
The risks associated with receiving service of process are overhyped.
If you don’t receive your service of process documents and miss an obligation to respond, the penalties can be significant. Companies have had to pay thousands of dollars in default damages that could have been prevented if they had received proper notification of the lawsuits from their Registered Agent to enable them to meet required deadlines.
I’m so overwhelmed with vendors, bringing on a new Registered Agent would make life even more complex.
If you’re having challenges managing multiple vendors, choose an experienced Registered Agent that offers a wide range of services with a staff of dedicated professionals who specialize in these areas. Having one service provider delivering a multidisciplinary support approach means you will have fewer vendors to manage, while saving you time and reducing your costs.
My staff and resources haven’t changed, and I’m sure we can handle our Registered Agent obligations too.
Anyone who is managing Registered Agent responsibilities for your company needs to be well versed in the rules and regulations for all the states in which your business operates, as well as stay on top of changes, filing dates which vary by state, and much more. When you consider the risks of missing service of process documents or important dates, do you really want to add these tasks to staff members who may already be stretched too thin? Think again.
The services a Registered Agent performs are not worth the fees they charge.
You could have a law firm handle your Registered Agent responsibilities, but depending upon the number of documents and filings, the costs can quickly add up. How much is it worth to your company if you could avoid paying expensive fines, penalties or default damages?
It’s too much of a hassle to switch to a new Registered Agent.
Switching to a Registered Agent that offers a wide range of services with full integration into your entity management system and a dedicated support team will streamline the process and save you time in the long run. Choose a Registered Agent with the experience to make the changeover smooth and seamless.