Choosing a Registered Agent

Forming a business requires that you have an individual within the state that the local authorities can contact. This person is known as the registered or corporate agent. If you’re operating a sole proprietorship or filing a DBA for such a business, you are typically considered the business’s registered agent. However, if you’re working on putting together an LLC or a corporation, you need to have someone as the registered agent. This article will explore the details behind a registered agent, what their responsibilities are, and what should know before choosing one.

Defining the Registered Agent

Score defines a registered agent as an individual appointed as the recipient of official mail or service of process on behalf of the business. They are essential individuals for several pertinent reasons. Firstly, if an individual or company decides to take the company to court, they must inform the business. Since a corporation or an LLC may have several members, and some of them may be out of state, the papers dictating the details of the suit needs to be sent somewhere that will ensure that all members of the business are aware of the proceedings against it. This single point of contact is the registered agent. The documents the agent accepts need not be lawsuits, but might be official mail sent from the state to the business as information.

Most states require any business registered within their boundaries to have a registered agent with an address within the state. States have different names for a registered agent. Some may term them a “statutory agent” or a “corporate agent.” The business address that the agent uses may be called the “registered office,” and the legal documents they accept are called the “process.” When a business files papers to be incorporated in a state, the registered agent’s address appears within the filing so that interested parties can know where they should send their documents.

Who Is Qualified To Act as a Registered Agent?

Individual states may have their own requirements for who can be a registered agent. However, there are a few standard rules that apply throughout each state when it comes to a registered agent’s address and place of doing business:

• The address that the agent uses CANNOT be a PO Box, but must be a physical street address within the state

• The agent is required to be available during regular business hours

• Most states have a stipulation that the agent needs to be above the age of eighteen, meaning most individuals or businesses providing registered agent services qualify

• An LLC or corporation isn’t allowed to act as its own registered agent, but an employee or member of the board may be cited as the registered agent as long as they conform to the other rules.

Should You Name an Employee or Member of the Board as the Registered Agent?

The Balance SMB mentions that it might not be a good idea to have an employee act as the registered agent for the company. Many businesses see this as a much more comfortable and cheaper way of doing things than paying an individual or company to operate as a registered agent yearly. Anyone deciding to go this route should know about the numerous drawbacks that go with the position:

• You can only be the registered agent for the business in the state where you reside. If the company has multiple locations in several states, it will need other registered agents in those locations.

• If you’re someone who travels frequently or needs to move about during your work, you won’t be present within the office during business hours, meaning you don’t qualify to fulfill the role of registered agent.

• If you change location, you can no longer be the registered agent for the business. If you leave your job, you may still be the registered agent, but it’s not in the company’s best interest to keep you on in this position.

• As a registered agent, your mailing address will be publicly available, and you are likely to receive a lot of junk mail, solicitations, and notices addressed to the business. If you’re not a fan of sifting through junk mail, it might be better to look for an external agent.

• Your name and address will be a permanent part of the company’s public records for as long as you remain the registered agent. If you have a home-based business or want to keep your location private, you may not want to sign up to be a registered agent.

• You run the risk of being served with a lawsuit at your home or place of business.

How to Choose a Registered Agent

Many enterprises and individuals offer the option to be registered agents for businesses. They provide the service at a cost, but paying for the service may be worth it. When choosing a person to be the registered agent for a business, you should be aware of a few key traits:

• Responsibility: Your registered agent needs to be responsible since they are receiving sensitive documents on behalf of the business. It would not do for them to misplace the documents they receive.

• Efficiency: Registered agents are required to be based within the state for ease of communication. When documents are served, they MUST reach the members of the corporation or LLC promptly.

• Professional: While you may be tempted to hire someone to act as the registered agent because you’re related to them, it may be far better just to pay extra to get a professional. Experts are already familiar with how business filing and communication work and are likely to speed up any processes that the agent may need to undertake.

Most states have a registry of businesses and individuals that serve as professional registered agents for companies. If you’re incorporating your business in multiple states, you might want to find a company that offers a presence in those states. This single point of contact simplifies matters since you don’t have to deal with a different person in each locale.

Brett Sartorial

Brett is a business journalist with a focus on corporate strategy and leadership. With over 15 years of experience covering the corporate world, Brett has a reputation for being a knowledgeable, analytical and insightful journalist. He has a deep understanding of the business strategies and leadership principles that drive the world's most successful companies, and is able to explain them in a clear and compelling way. Throughout his career, Brett has interviewed some of the most influential business leaders and has covered major business events such as the World Economic Forum and the Davos. He is also a regular contributor to leading business publications and has won several awards for his work.