Registered Agent 101: What is a registered agent and why you need one.
Protecting your business is crucial to success. How you protect your business requires you to know and understand every aspect of business operations, compliance and regulatory requirements, and much more. State laws are ever changing but to protect your business you need to ensure you are adhering to them all. It’s a pretty hefty task, especially if you’re operating in several states across the US.
To stay on top of these laws and regulations you need a registered agent. In fact, you need one, no matter what, in every state in which you conduct business. The right registered agent will leave you feeling confident that your entities are compliant and in good standing all the time. You may be asking yourself ‘what’s a registered agent?’. Well, you’ve come to the right place. So, let’s start with the basics.
What is a registered agent?
A registered agent, or statutory agent, is a third-party provider designated to receive service of process (SOP) notices, correspondence from the Secretary of State and other official government notifications on behalf of a corporation or LLC.
In the interest of judicial fairness, a business entity is required under state law to appoint a single representative to accept these documents in each jurisdiction they are located. When a legal document is served on a business the registered agent accepts the document and then must forward it to the proper individuals. When first appointing a registered agent the procedure and means of forwarding documents between the registered agent and their client company will be agreed upon to avoid delay or confusion.
Why do I need a registered agent?
Simply put, it’s the law. A business entity must have a registered agent. Under state law, every company is required to have a registered agent located in the state of incorporation and in all states where the company is qualified to transact business. If you own a business or work for a business, other than sole proprietorships and basic partnerships which don’t require registration with the Secretary of State, there is a statutory legal requirement to appoint a registered agent.
Not sure if you need a registered agent? The checklist below will help determine if a registered agent is required:
Filed formation documents with the Secretary of State to create a business
Registered your business to transact in another state
The business is a Limited Liability Company (“LLC”), Corporation (both profit and nonprofit), General Partnership (“GP”), Limited Partnership (“LP”), or a variance thereof
Registered agent information is public and available on the Secretary of State website for every state.
What does my registered agent do?
Your registered agent’s job is to receive documents on behalf of your business and route them to the appropriate person in your company. Documents such as lawsuits, subpoenas and other legal notices are pretty significant and often come with a hard deadline. You’ll want to have confidence in your registered agent that they will get you these documents in a timely fashion so you can react accordingly and avoid additional legal and financial penalties.
You must have a registered agent in every state you operate. And your registered agent must have a physical location in the state the business is registered. A PO Box will not suffice. This means if a business is located in multiple states, they must appoint a registered agent in each of these states. The legal documents must be delivered within the state borders of the state the proceedings are taking place. The agent is responsible for accepting government notices, annual compliance notices and service of process in the event of legal proceedings against the business. In order to ensure successful delivery of these documents the agent must be available during standard business hours each day and has a duty to accept these documents on your behalf.
How do I choose the right registered agent for my company?
That’s a great question. Considering all registered agent providers essentially do the same thing, choosing one might seem simple enough. But that’s where things can get tricky. You’ll want to be certain you’re appointing a registered agent the business has confidence in to forward any documents received on their behalf. Meeting deadlines and responding to inquiries is vital to protecting your business. Many businesses registered in multiple states will choose a professional registered agent service to act as their agent in order to ensure successful delivery and to streamline operations. These professionals understand the importance of these documents and have systems in place to deliver the documents to the necessary recipient at their client’s business. Remember for your own protection, having a registered agent is the law, and understanding this law is important when doing business.