What is a Registered Agent?
A registered agent is a business or individual designated to receive service of process notices (such as a summons or subpoena) on behalf of a business entity. A registered agent may also receive other correspondence from the state, such as notifications about taxes and bureaucratic procedures.
All 50 states require that a business entity have a registered agent in the state. The agent can be anyone—the business owner, an employee, or a third party hired for the role—with a physical address in the state. Failure to have a registered agent can result in penalties.
Why Should I Hire a Registered Agent?
Technically speaking you can list yourself as the registered agent for your business, using your home or business address. However, it is generally advisable to hire external registered agents for your business. Here’s why:
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You need a registered agent in every state you do business. To create a business entity such as an LLC or corporation, you only need to incorporate in one state. However, to do business in other states, you need to register as a foreign LLC/corporation (by a process known as foreign registration). By law, you are required to have a registered agent in every state you are registered. Therefore, if you are registered to do business in 10 states, you must maintain a registered agent with an in-state address in each of these 10 states.
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Using an external party protects your privacy. If you act as your own registered agent, this makes your address public to anyone who searches your business. This means anyone can reach you: from spam marketers to anyone who has a beef with you or your business. Using a third-party registered agent solves this problem, upholding the corporate veil between you and your customers. Having a proper registered agent gives you a public-facing address where you can be reached. When your registered agent receives correspondence on your behalf, they then forward it on to your private contact address.
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It protects you from potential embarrassment. As a business owner, there’s no telling when someone might file a lawsuit against you. If you act as your own registered agent, this exposes you to the potential embarrassment of having someone serve you in front of clients, employees, or relatives. Much better to have a third party receive the service of process and forward it to you quietly.
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You must keep your registered address up-to-date. If your business changes locations or an employee assigned as the registered agent leaves the business, you must update your registered agent details accordingly. This is an important but seemingly minor task that could be easily overlooked during an office move. Having an external registered agent ensures you never have to think about this problem.
What If I Don’t Have a Registered Agent?
In all 50 states, one of the requirements of registering your business entity is to have a registered agent with a physical address in that state.
Failing to maintain a registered agent can lead to various consequences and penalties, including:
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Default judgment. If nobody is physically present at your registered address to be served with a lawsuit, the court may issue a default judgment—which you are required to pay.
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Losing your business’s good standing. This can prevent you from obtaining financing, filing a lawsuit, or even registering in other states.
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Financial penalties. In some cases, the state may fine you for not maintaining a registered agent.
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Dissolution. In the worst-case scenario, the state can dissolve your business, removing the corporate veil between your business and you—and making you personally liable to creditors.
How Do I Get a Registered Agent?
Thousands of registered agents can be found in each state with just a simple Google search. For added convenience, you can have an online legal service provider issue you a registered agent in the state/s where you do business. An online legal service is a service that helps with all the red tape of starting a business, including company formation, preparation and filing of articles, and hiring a registered agent.
The best legal services providers throw in a registered agent for free for at least the first year after using their service to incorporate your company. After that, it can typically cost anywhere from $50 to $300 per year to maintain a registered agent, depending on which service you use and in which state/s the registered agent/s are based. The great thing about legal services providers is they can often find you registered agents with addresses in multiple states—saving you money.
