Going by the literal meaning of the term, a Registered agent is an agent “registered” because you register him/her to the state to be your agent for official business queries and communications.
If you are a business owner planning to enter the world of limited liability companies and have kick-started your documentations for the same then you would probably be aware that you require a registered agent to continue with your process.
But the real question is, what actually is a registered agent and why is it needed to run an LLC?
So, to answer that question, a registered agent is in charge of all your official documents and handles all your company’s official communications. If you are planning to start your own business or if your business is under construction then you would know the amount of paperwork and legalities involved, so a registered agent manages all your documentation ranging from registration renewal notices to tax notices.
Broadly, a registered agent acts as the face of the company when handling official communications and documents and therefore it is often called a resident or statutory agent as well. Although hiring a registered agent isn’t compulsory but most states in the United States require you to hire a registered agent to smoothen out the business documentation.
Now, one might wonder who all can they appoint as their registered agent, are there any specific qualifications to be called as a registered agent of a company, and many such queries. So basically a registered agent can be a professional working in this field, a colleague, or you yourself only if you meet the state’s requirements and criteria.
Some fundamental jobs of a registered agent are to handle government correspondence, handle documentation on the company’s behalf, and also to receive service of process for the company and these are crucial tasks for a company. That is the reason some states require you to designate a registered agent for your company to proceed with your business.
What does a Registered Agent do?
The main job of a registered agent is not just to handle official mails for the company but to act as a manager for top-notch corporate compliance. He/she is in charge of all your company’s legal notices and also manages all your annual reports for the company. A registered agent acts as a savior in tackling missed deadlines for document submissions and taking appropriate actions for legal and tax notices.
To give you a brief introduction to a registered agent’s duties, we have made a brief drop-down list as follows.
- The registered agent is incharge of all your tax forms and makes sure you do not miss important tax filing deadlines.
- The registered agent handles all your company’s legal documents for you and eliminates any misinterpretation.
- They are also incharge of handling official reports and act as a gatekeeper for the official documents.
- These agents are responsible for handling legal summons or service of process on behalf of your company.
What is the need of a registered agent in a company?
If you are planning to start a company in the US, you should probably sort out a registered agent for your firm first because running a corporation without a registered agent is just like running an engine on low fuel. There are multiple types of corporations you can opt for in the US, whether it be a limited liability corporation, a limited partnership, or a limited liability partnership. All these corporations or business entities require a registered agent to work efficiently.
New company owners have to mandatorily designate a registered agent as a part of their articles of organization or corporation which are further submitted to the state officials to legally register your business with the state. Also, if you are already running a corporation in a particular state and what to change or update any particular detail about your registered agent then make sure to approach your state secretary for the same.
Can you designate yourself as your company’s registered agent?
Initially, the thought of designating yourself or any valuable member of the company as a registered agent sounds like a brilliant move but it isn’t how reality looks like. Being a registered agent isn’t a child’s play and requires utmost attention and knowledge. You being the owner of the company have a lot of duties to fulfill and it would be practically impossible for the owner of the company to be a registered agent for their company as well.
Firstly, a registered agent from your own company or LLC can be quite a risky move as there is a possibility that the physical address of your place and business and your registered agent will coincide, and if by any chance your company is being sued or has a lawsuit to address to, that might happen in the official premises leading to embarrassment.
Secondly, a registered agent’s job is a regular job and any absence during business hours can have serious consequences. So it is advised to appoint a registered agent that is available during work hours all the time.
Now, as we have discussed the hurdles that can come if you appoint yourself or a member of the company as a registered agent, we should also inform you that technically a business owner or business employee can be designated as a registered agent only if they fit in the criterion set by the States.
A person being appointed as a registered agent should be an adult that is 18 years or older in age.A registered agent should necessarily have a physical address in the same state where the business is established. The appointed person should also be present in person during business hours.
Using Third Party Registered Agent Services
Another viable option to cater to your needs of finding a registered agent is to hire a professional registered agent from numerous services available in the market. As mentioned above, designating yourself or any other member of the company seems to be a cumbersome task that might lead to complications.
To eliminate any complication, one can opt for private registered agent services, these services primarily work in providing corporations and LLCs with professional registered agents. In return for these services, these firms typically charge a fee ranging from $100 to $400.
These agencies assure you of top-notch services and make sure that every official document is received and sent on your company’s behalf, some of the best firms also make these documents available to you in real-time by scanning and uploading.
Next up, if you have your business registered in more than one state in the United States, you’ll have to hire a registered agent in every state of service but this problem can be efficiently avoided by hiring a registered agent from a national service so that they have offices in almost all states.
Benefits of hiring a registered agent
First and foremost, a registered agent makes the documentation procedure a lot easier by handling all your documents and forwarding them within restricted time limits. As their agencies provide you with professional registered agents, therefore, there are no doubts about their credibility and assurance.
Let us discuss some of the major benefits of hiring third-party registered agent services:
1. They take care of your company’s privacy
Privacy is the first question that arises when sharing your company’s documents and official notices with a third party firm and these professional registered agents prioritize your company’s privacy over everything else. They make sure that their address is listed on official documents rather than your company’s address.
Your corporate or LLC’s registered agent maintains your privacy by :
- They try and make sure that any legal summons or notices do not reach you directly to your office so that you are saved from any kind of embarrassment in front of people at the workplace
- They put their address public rather than your company’s address to prevent any unsolicited emails reaching your premises.
2. They comply with the law
The assigned registered agents understand state requirements in depth and make sure to inform you of every upcoming deadline to file certain documents. They make sure that the annual report of your business is submitted to the state on time avoiding any kind of consequences in the future.
These professionals also keep in mind to keep copies of these official documents for future references or in case of any natural calamity.
3. They provide a hassle-free process
Registered agents undoubtedly create a stress-free environment by handling all the heavy documentation on the company’s behalf. They provide business owners with peace of mind which enables them to focus more on their day-to-day business proceedings. They take a part of your workload by:
- These professionals understand the work-life balance and make sure that your business life doesn’t dominate your personal life by making sure that your business mail receives all necessary communications and not the personal mail.
- They automatically act as a gatekeeper for all your official and legal documents promoting the business owners to focus more on other aspects of the business.
- Registered agents become a part of your business process and also serve as a guide when your business needs guidance on certain topics.
Imagine not hiring a professional registered agent and acting as a registered agent for your business, this would require you to present at all times on the physical address during business hours to receive and sign any documents or mail sent to you. This hampers your duty to handle all segments of the business that require outdoor activities as well.
So, registered agents provide you with the liberty to focus on your business needs and leave the documentation segment to them, they promote flexibility in the following ways:
- They allow the owner to work on expanding their LLC to different states where the registered agent has a physical address at or hiring a national registered agent service is the best choice if you are looking to expand to almost all 50 states.
- Business owners can have flexible work schedules by designating professional registered agents.
How to choose the best third-party registered agent service?
There are numerous features you need to look for before finalizing your ideal third party service, the answer to which is to preferably look for national service but if you still want pointers to look for in these services then here is a list for you
- Efficient document management: Look for services that continually keep on updating you with official documents by scanning and uploading
- Covering maximum states: Make sure the service you opt for provides services in most states.
- Deadline reminders: The ideal registered agent provides you with regular deadlines and helps you with compliance management.
- Availability: Make sure that the registered agent service is approachable and reliable and will cater to all your possible doubts.
What happens if you don’t maintain a Registered agent?
Initially, all businesses need to assign a registered agent but some companies lack at managing the registered agents after some time, they think that a registered agent’s job can be left unhandled and that leads to future consequences.
Companies tend to lose registered tags from the state and some might also be liable for penalties and fines and worst-case scenario, a lawsuit when official documents are left unhandled for a significant amount of time. There’s an added risk of receiving service of process as well from the state.
Imagine your company receiving a lawsuit but there isn’t a registered agent to receive it or forward it, so it is left unanswered and the deadline passes by, this might lead to your company losing the status of a legal business entity and result in an issue.
So, all in all, a registered agent’s job might not sound that demanding but it plays a really important role in maintaining a company’s position in the state.
If you are from France, all the rules and regulations are different. You can check How to start a company in France for information.