What does a Registered Agent do?
If you’re a business owner, you’ve likely heard about the importance of appointing a registered agent. A registered agent has been approved by the state and can act as your representative in case of legal matters.
However, many companies still don’t take this step because they don’t know what’s at stake if they don’t appoint one.
What provides legal and administrative services to a company?
A registered agent is the first point of contact for any legal or official communication, and they provide the company’s address for official communication. Registered agents can be individuals or companies.
Requirements of Registered Agent
The requirements of a registered agent are reasonably straightforward. The person must be a natural person and at least 18 years old.
They must have a physical address in the state where your business is located, and in addition, it must be accessible throughout regular business hours. There are additional requirements regarding who can serve as your registered agent:
- For corporations, only board members can serve as their registered agents
- For LLCs, management companies and officers may also act as registered agents
Duties of Registered Agent LLC
As a registered agent, you are responsible for receiving legal documents on behalf of your client. Your client will likely want you to accept service of process from any person or entity that attempts to communicate with them through formal legal means.
‘Service of process’ is serving a lawsuit or other legal communication on someone to notify them that they’re being sued officially or otherwise being investigated by a government agency or private party.
Not Having a Registered Agent Can Put Your Business at Risk
Not having a registered agent can put your business at risk in several ways. It may be unable to register its LLC in the state where it operates, or it could be stripped of its good standing certificate and thus be unable to expand into other states.
You could also find yourself unable to respond to legal lawsuits, which can lead to fines, penalties, and dissolution.
Appointing a Registered Agent Service
If you choose to hire a service to act as your registered agent, they will be responsible for receiving official communications and forwarding them to you. You can appoint a local service or one located in another state.
It’s also possible for you to appoint a service in the same state as your business or even another country.
The cost of using an online registered agent service varies depending on the number of companies on their roster and whether they offer any special discounts for non-profits or small businesses.
Benefits of Appointing a Registered Agent Service
There are several benefits of registering with a registered agent service:
- Reduced cost. Businesses can save money by using a registered agent service, representing a significant discount over hiring an in-house employee to act as their registered agent.
- Multi-state businesses and registered agents.
Suppose you operate multiple businesses in different states. Then, it makes sense to utilize one and the company as your registered agent instead of trying to manage all those agencies individually for each state where you operate.
- Acting as your registered agent might make sense for businesses that hire their employees or independent contractors to serve themselves as the appointed representative according to state law.
Conclusion
The penalties for failing to appoint a registered agent in your state can be severe. However, there are ways to avoid these penalties by establishing a registered agent through SmartCorp.