Time to Startup!

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Registered Agent Q&A Part One: Who or What is This, and Do I Need One?

Published on Sep 10, 2009


Read 'Registered Agent Q&A Part One: Who or What is This, and Do I Need One?' at 'Time to Start Up,' the small business blog by BizFilings.
registered agentSo you've formed a new company and are ready to start or grow your business. One of the things you may have run across while forming was mention of a Registered Agent. If that was a new one for you, then this little Q&A will cover what that is, and why you should really think about getting one. Q.) What does a registered agent do? A.) A registered agent is responsible for receiving important legal and tax documents on behalf of your business; things like Service of Process, which is the document that initiates a lawsuit. A registered agent also receives important mail, correspondence and tax documents sent by the state. The registered agent must have a physical address in the state of formation or qualification. Post office boxes or a private, rented mailbox are not allowed. The registered agent must also be available during normal business hours. Q.) Why do I need a Registered Agent? A.) Most states require corporations and LLCs that are formed or registered to transact business there to have a registered agent in that state. Individuals are allowed to act as their own registered agents for a business. For example, if you have a physical address in the state where you form your corporation or LLC, you could name yourself as the agent. You could not, however, name your new company as its own registered agent. In order for a company to act as a registered agent, it must typically be approved to do so by the state in question. You may be saying, "I'm a one-person company, why should I use a registered agent provider?" In reality these companies provide a lot of value to even the smallest of businesses; such as providing electronic notification and online access to Service of Process and providing tools to assist with the ongoing compliance requirements corporations and LLCs face. Below are some items to keep in mind and some situations for which using a registered agent service provider may be the best choice for your business.
  • You're forming your company in a state where you don't have a physical location. You are legally required to have a registered agent with a physical address (no P.O. Box) in the state of formation.
  • You use a Post Office box as your business address. You cannot act as the registered agent for your business if you have only a P.O. Box as your only address.
  • Your address changes frequently. It is important to keep the registered agent address updated with the state, but changing it requires a formal state filing and may also require that a fee be paid to the state. If you name yourself as agent, you will be responsible for undertaking this process to keep your address current. By using a registered agent service provider, you never have to worry about this.
  • Your business is home-based. As previously mentioned, the registered agent address is a matter of public record. That means anyone, including marketers, can access it. It is not uncommon for the registered agent to receive a lot of "junk mail" for the business. Using a registered agent provider can reduce the amount of unsolicited mail your business receives.
  • You prefer to keep business activities private. When a company receives a Service of Process, this document is often delivered by local law enforcement. Most business owners do not want the sheriff to show up in front of customers, employees or neighbors (as in the case of home-based businesses) and serve them notice that their company is being sued. Using a professional registered agent ensures you receive any Service of Process discreetly.
  • You don't maintain normal business hours. The registered agent for a business must be available during normal business hours to accept important documents as they are delivered. If you set your own hours, you may wish to consider using a professional provider, so that you never miss these important communications.
  • You do not have a permanent worksite. If your business requires you to move around frequently, for example an electrician who is making service calls all day, using a registered agent service provider ensures that important documents will still reach you and your business.
  • You want one less thing to worry about. Running your company is challenging enough without personally handling the necessary minutia. A professional registered agent can often help you by providing online access to your accounts and important documents and assisting with the annual filings states impose on corporations and LLCs.
In next weeks post, well give you some tips on how to select a registered agent that will meet your exact needs.