By law, a company must appoint a registered agent (also known as an agent for service or process) in each state where a corporation has business activity deemed by the state to require the business to register or qualify with the state.
In fact, it’s not always necessary to designate a third party as your company’s registered agent. Start-uppers may act as their own registered agent, or registered agent, on behalf of their company.
When you decide to be your own registered agent, you’re doing more than saving some income for your organization. It’s a great deal of responsibility. From that moment, you’re legally the point of contact between the business and state.
Some requirements are expected of you in this title and even some consequence if you fail to comply with certain duties as a registered agent that could land your company in hot water.
Let’s look deeper into a registered agent’s role and whether or not novice entrepreneurs should agree to act as their own agents.
What is a Registered Agent?
Registered agents are persons, or third-party organizations, appointed to receive service of process on behalf of a company from country and state groups. When a company is formed on a state level, it’s granted a right to due process.
Should your company be served with a lawsuit, for instance, they would need to be informed before they were served. A national registered agent would receive that statement because they are the appointed person of contact.
Try not to skimp reading this. Being your own registered agent is about more than being notified about potential charges.
A registered agent also receives other important documents like tax forms on behalf of the company. They help organize the materials to avoid forgetting or losing anything. Later this paperwork is delivered to the business, and its owner, in a timely fashion. This helps the business owner respond to the documents and stay updated to remain in compliance.
Registered Agent Requirements
There are some conditions and restrictions to becoming a registered agent for your startup. Some states may have more or less stringent standards, but usually, a business or an individual can become your registered agent if the following requirements are met:
- The registered agent has to be reachable during normal working hours to receive important legal and state documents. The physical address and the name of the individual are required if the agent is a person.
- The agent’s address has to be a physical street address.
- If the agent is a business, it must be a business registered in the state and is in great standing. Often some record ID or the company name is required to identify the business as your agent when you file.
Should I Become My Own Registered Agent?
Generally speaking, it’s a smart move for entrepreneurs to carefully examine the conditions for being a registered agent before deciding to become one.
Entrepreneurship, particularly in its early days, means wearing a lot of different hats. You may be operating odd hours. Maybe you will take travel or meetings during general business hours. Your company might not even have a physical location or maybe operating outside of its formation state.
There also intervenes the separate issues of accepting paperwork and trying to keep up with everything on your own. Not to mention being a registered agent can be a very time-consuming role. You will need to pay attention to detail and meet demands deadlines.
Being a registered agent isn’t for everyone; while some entrepreneurs may be able to easily tackle these tasks, others will require extra help.
Reasons to Hire a Registered Agent
- Immediate Access to Served Documents
Time-sensitive paperwork needs same-day attention. If you’re often away for sales meetings and clients through the workweek or get pulled into a work-related task, you may always be available during regular working hours to receive legal documents. A reliable registered agent will be able to receive all legal paperwork in real-time and then inform you about the deadlines that you must meet according to the document. With a trustworthy registered agent doing this for you, you can stay on top of these time-sensitive topics no matter where you are.
If you would be to ask other entrepreneurs what’s the biggest benefit of hiring a registered agent, they answer privacy. A registered agent can allow you to use their address on the Secretary of State’s platform and other publicly available records. That’s especially useful if you operate a home-based business because the address of a business’s registered agent is a matter of public record.
For instance, if you’re a business’ registered agent and you list your home address as the agent’s office, your personal information will show up on public documents, and the process will send notifications to your home address. Also, if your business gets sued, they will send the service of prices to your registered agent.
- You Want All Documents in One Place
Entrepreneurs find it beneficial to have a registered in order to comply with state regulations and be sure all-important notifications are kept in one place with the registered agent. A registered will provide you with your own online account so you can track all reports and notices and even represent you in multiple states instead of having to deal with separate agents.