Whether you are forming your very own LLC (limited liability company) or a corporation, you must choose a registered agent who will act upon your company’s behalf. The registered agent’s details will be provided to your state within the formation documents that you must complete, and this includes their full name and their address. Before you begin your business, here is everything you need to know about choosing a registered agent, from their role in your company to who can act as a registered agent for your business.
What Does a Registered Agent Do?
Understanding the role of a registered agent is essential when choosing a registered agent and making the decision on whether you can be your own registered agent. If a customer or another business wishes to sue your business, they must notify the registered agent whenever the business is an LLC or corporation. This lawsuit must be emailed or delivered to the registered agent, but this entirely depends on the state in which you run your business.
A registered agent is essentially a designated person that has been named to accept documentation and lawsuits on behalf of your business and must be available during usual business hours. This also means their name and address is readily available to any business or client. The state may also refer to a registered agent as a statutory agent and this is the same role. The business address of the registered agent may also be referred to as the registered office. Legal documents that the registered agent accepts are often known as process.
Lawsuits aren’t the only documentation a registered agent can be supplied with. Other documents such as official correspondence, subpoenas and tax notices are all received by a registered agent. These should then be passed on to the corporation or LLC. If your business works over many states in the U.S., you must have a registered agent available in each state.
Who May Act as a Registered Agent for My Business?
A registered agent can either be yourself, an employee of the business, an employee hired from a registered agent service or anyone aged 18 or over. Again, the state you live in determines all the rules that apply to this, so it’s best to check out the official state website for all the rules and regulations regarding registered agents within your state. There are a couple of rules that apply for all states and these are:
- A registered agent must always be available during usual working hours
- A registered agent needs an address, not a P.O. box
- Your company cannot work as its own registered agent
Being Your Own Registered Agent
You may wish to choose yourself or an employee to act as the registered agent for your business, but there are plenty of things to consider before you decide on this. Often choosing an agent outside of the company is much better, although it would save some agency fees. Choosing to be your own registered agent means you may be served a lawsuit at work, possibly in front of customers and employees which could damage your reputability.
If you work from home, then your home address would be visible on public records. You would also have the extra role of sifting through documentation and receiving it when you also have your business to run. You must be available at your place of business during normal working hours – if you have to attend meetings, travel or need to run errands, then you aren’t available, meaning you are not able to act as a registered agent. You must also remember that you need a registered agent for each state – you cannot act as an agent for several states.
Choosing an Outside Agency
Often companies end up choosing an outside agency because they know what they are doing, and it takes the pressure off business owners or employees. Documentations must reach your hands promptly, especially in the case of a lawsuit, or it may cause further damage and fees to your business. This means you must choose an outside agency that is both reputable and financially viable for your business. For more information on registered agent services and costs, check out incfile.
A registered agent is a legal requirement and so is something that cannot be ignored. Consider the advantages and disadvantages of using an agency or being your own registered agent before making a decision. A registered agency can cost very little and can save you a lot of time.
