What Is a Registered Agent and Why You Need One

If you plan to incorporate your small business, obtaining a registered agent should be at the top of your to-do list. To legally operate in any state as an LLC, corporation, or nonprofit, you need a registered agent.

What Is a Registered Agent?

A registered agent is an organization or person authorized to receive official documents for your company. Such documents include government correspondence, legal notices (such as subpoenas and service of process notices), tax and regulatory announcements, legal documentation from your state, and any compliance-related correspondence for your business.

Why Your Business Needs a Registered Agent

For most businesses, a registered agent is required by law. The agent’s name and address are in the public record, and they function as your point of contact for all formal correspondence your company receives from government agencies. These communications keep your business legal and successful. Having a registered agent protects your company by ensuring that all your important documentation and correspondence goes to the same location and that you receive it in a timely manner.

How a Registered Agent Works

Government agencies generally send communications via mail, but they might also email, fax, or deliver them in person. A registered agent is set up to receive important documents and correspondence however they come. For example, in many states, legal papers must be served in person. A registered agent ensures the delivery of your important information runs smoothly and you stay well-informed.

Requirements for Registered Agents

Registered agents must fulfill very specific responsibilities and requirements. These include the following:

Business Hour Availability

All registered agents must be available during normal business hours — 9 a.m. to 5 p.m., Monday through Friday. During this time, the agent must be present at the registered agent address listed on your company’s state incorporation forms.

Location Specific

A registered agent must be located in your state of incorporation. The address for the registered agent must be a physical address and cannot be a P.O. box or a leased mailbox service. You must also have a registered agent in each state where your company does business.

Public Record

Your registered agent’s address and phone number become a part of public record. This means the registered agent can be easily searchable on the internet and accessed by mail services and in-person visitors.

Why Not Serve as Your Own Registered Agent?

A business owner is legally allowed to act as their registered agent, but it’s generally more trouble than it’s worth. Here’s why it’s a good idea to choose a professional registered agent.

You Lose Privacy

All states require registered agents to be publicly accessible. If you’re your own registered agent, your name and address become part of the public record, easily searchable by anyone. For home-business owners, this means your home address also becomes publicly accessible, too. If privacy is a priority, consider outsourcing to a registered agent service.

Expansion Is Difficult

If you decide to grow your business, you need a registered agent in each state you operate. Serving as your own registered agent for each location would require you to be a legal resident with a physical address in every state. You must also be available during normal working hours at each of the locations. This means you’ll need to outsource registered agent duties as you expand.

Your Work Hours Are Restricted

New business owners may not work a typical 9-to-5, Monday-Friday work week. But those are the hours state governments require registered agents to keep. If you’re in a business that requires you to work nights and weekends, it may not be practical or even possible for you to be available during those hours.

You Might Get Served at Home

If someone files a lawsuit against your business and you’re acting as your own registered agent, the process server will deliver the paperwork at your place of business. This means you could be served in front of customers or at home if you run a  home-based business.

You’re Stuck in One Place

Registered agents are required to be present at a stationary physical address. Being available in one place is impossible for certain professions, including limo drivers, locksmiths, food truck operators, traveling massage therapists, mobile dog groomers, and any other business owner who is constantly on the move.

You Need an Official Office

Your registered agent must have a physical address, and P.O. boxes aren’t acceptable. If you run a business with no official office, it’s impossible to be your own registered agent. 

Why Hire an Outside Registered Agent?

Given that your agent must hold consistent office hours during the week, it often makes more sense to hire a reliable outside registered agent service. Such people are well-versed in all the official documentation businesses receive and process. 

Professional registered agent services receive and log all documentation sent to your company and forward that information to you. If you work from home, a registered agent keeps your address out of public records. A registered agent also ensures that nothing falls through the cracks and that your business’s correspondence comes to you. 

With a professional registered agent, you always know everything will be handled appropriately and that you’ll receive all necessary documentation and correspondence promptly. Having experts receive and log your important paperwork allows you peace of mind so you can focus on your most important job — running your business.

_{The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.}