Entrepreneurs who are incorporating or forming an LLC will discover a tricky question when filing their articles of incorporation or LLC articles of organization. Wherever you choose to establish your business, you will have to list a registered agent for service of process. If you’re like many founders, that term may be unfamiliar to you. You may be wondering, how do I answer this question? Does it really even matter?
The answer is yes, it does matter! Registered agents serve an important purpose. Appointing a reliable agent helps you meet statutory requirements for incorporation, ensures that your business receives service of process and other important legal documents, and in some cases, can result in increased privacy for you and other owners. It’s time to answer some of your other FAQs and help set the table for your business’s early success.
What is a registered agent?
A registered agent is a physical office located in the state where you form or register your business. At that office must be an individual or business entity who agrees to represent your company. Their job is simple: to receive legal and government notices on behalf of your business, and to forward them reliably to you.
What sort of documents does the agent receive?
Registered agents serve a limited, though important role. They receive legal documents on your company’s behalf, such as service of process (SOP), subpoenas, and wage garnishments. For that reason, you might hear your registered agent referred to as an “agent for service of process.”
Depending on your state, the registered agent may also receive annual report reminders from the secretary of state or tax notices from the department of revenue. In any of these cases, the registered agent is charged with getting these documents to you reliably so that you have enough time to respond.
Importantly, registered agents are not designed to act as a virtual office or mail forwarding service. If you need a physical office space or a place to receive your mail, consider a vendor designed for that purpose or a PO Box.
Do I need a registered agent?
Yes! Registered agents are required in every state by statute. You must designate a registered agent when you incorporate or form an LLC, and in each additional state where you register to do business. If you don’t, your filing will be rejected right out of the gate.
Who can serve as my registered agent?
In nearly every state, the registered agent may be an individual or a business entity, so long as it’s not the business itself. For example, if you are forming a company called “My New LLC,” you might designate yourself (an individual) or a service company to act as your registered agent. However, you couldn’t list “My New LLC” as the registered agent for itself – it just doesn’t work that way!
Keep in mind, you will have to appoint an agent in each state where you eventually do business. So, if you live in Maryland and appoint yourself when you form your company, you’ll need to find a separate District of Columbia registered agent in order to do business in the District.
As a business owner, you can choose the agent that is right for you.
Using an individual as your registered agent
If you appoint an individual, such as yourself or another owner of the business, you’ll save the cost of hiring a company to be your registered agent. Be sure that whoever you designate is truly available during all business hours. If that person relocates, retires, goes on vacation, or no longer consents to serve as your registered agent, you’ll need to file with the state and pay a fee to make the change. There’s an element of privacy at stake too: the registered agent’s name and address is listed in searchable state databases.
Remember, if you plan to register in more than one state, you’ll need to find another agent as soon as you do.
Using a service company as your registered agent
If you hire a service provider, you’ll generally have the immediate benefit of a company that meets statutory requirements for serving as a registered agent. Larger providers can provide representation in multiple states (which is good as you grow). They may even offer filing services and software for your other incorporation and licensing needs.
Like any vendor, there are plenty of registered agent companies to choose from. Beware of pricing gimmicks! “Free” and dramatically discounted services typically come back on you sooner than later. When selecting an agent, choose one with no-nonsense pricing and great customer service.
Forming your business doesn’t have to be complicated. Understanding what a registered agent is and does will ensure your business receives key legal documents. With a service company, you’ll minimize the paperwork and risk of using individual agents. Most importantly, you’ll get your company formed sooner, which allows you to get back to business!
Harbor Compliance does not provide tax, financial, or legal advice. Use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.
James Gilmer is a Compliance Specialist at Harbor Compliance, a leading provider of compliance solutions for companies of all types and sizes. Founded by a team of government licensing specialists and technology trailblazers, Harbor Compliance has helped more than 25,000 organizations apply for, secure, and maintain licensing across all industries. James is passionate about helping nonprofit organizations leverage compliance to enhance their fundraising and program activities and educating the sector on compliance issues. James is also a Co-Founder of Berks Sinfonietta, Inc., a nonprofit chamber orchestra located in Reading, Pennsylvania.
RA stock photo by OpturaDesign/Shutterstock
