When you register an LLC or a corporation, there are only a few mandatory requirements.
Having a registered agent is one of those.
In this guide, you’ll learn who registered agents are, what they do, and when you need them.
Let’s start with the basics.
Who are registered agents?
Registered agents are individuals(or registered businesses) who are designated to receive important notices and documents on behalf of your company.
They are the point of contact for Secretary of State and other state/federal agencies. Your registered agent has to be physically located in your selected state.
And it is legally required for you to have a registered agent. There is no way around it.
Why is it so important to have a registered agent?
Because, after you form your company, the Secretary of State and other governmental agencies need an official way of reaching out to you. They need an official point of contact within the state.
All the important documents are first received by your registered agent and then forwarded to you.
Here are some of the things registered agents do:
- They receive service of process, government correspondence, compliance documents and other official mails on your behalf.
- Accept & forward Annual report and tax notices
- File annual reports with the state (optionally)
- Handle all official documentation from the secretary of state
If that seems like a lot of important responsibilities, indeed it is.
Need for a registered agent
Does that mean you always need a registered agent?
Short answer: Yes.
For all business types
It is legally mandatory to have a registered agent for:
- Limited Partnership (LP)
- Limited Liability Partnership (LLP)
- Nonprofit corporation
For all 50 states
Whichever state you have registered your entity in, you will need a registered agent. They are referred to as resident agents, service of process agents, statutory agents, or other names.
Although every business requires a registered agent, not every random person can be a registered agent.
There are a few requirements specified by the states, that need to fulfilled by a registered agent.
- Registered agents must have a physical office space in the state. Not just PO boxes.
- Registered agents must reside in the state or should be a business approved to provide registered agent service in the state.
- Registered agents must be available during normal business hours to receive tax forms, legal and official documents.
Being your own registered agent
If having a registered agent is that important, can I be my own registered agent?
Well, technically, there’s nothing stopping you from being your own registered agent. You can even save a few hundred bucks.
But, do you WANT to be?
It will just add to your list of responsibilities, as a business owner.
There are some reasons why most owners do not like to be their own registered agent:
- Contact details of the registered agent will be made public.
- You need a physical office in every state you operate.
- You need to be available during normal business hours 5 days a week.
- If you change your address, you will have to notify the state and file some forms.
In short, if you become your own agent, you might save some dollars. But the repercussions and penalties of failing to perform your duty as a registered agent far outweigh this savings.
So, why even bother to do it yourself, when there are several companies offering registered agent services.
If you’re planning to have your family member or friend as a registered agent, they will end up having a lot of responsibilities. They have to be available during business hours, their information will be made public record and more. It is better not to trouble your loved ones with such responsibilities that have grave repercussions.
Speaking of which, what happens if you don’t have a registered agent?
Let’s find out.
No registered agent
What if you don’t have a registered agent?
Cannot complete registration
During the time of business registration, if you don’t provide a registered agent, the registration will not be completed. Secretary of State will not accept your articles of formation/incorporation.
Lose the right to due process
Registered agents receive service of process, which is the notification you receive when there is a lawsuit. If there is no registered agent, your business could be sued and you wouldn’t know about it. That will lead to a default judgement against your company.
Lose certificate of good standing
If you do not have a registered agent, your company will lose the certificate of good standing. This leads to a lot of issues including the loss of rights to your business name, inability to file lawsuits and even losing liability protection.
Yeah, it is bad.
That is why registered agents are so important.
Now, let’s understand registered agent’s address. There seems to be a bit of confusion about it.
Principal business address & Registered agent address
Registered agent address is the address of your registered agent. No surprises here. But it is NOT the only address for your business.
Principal business address is considered to be your base of operations. It is required when you enter into legal contracts, opening bank & merchant accounts, receiving invoices, bills and licenses, and communicating with your customers.
You can legally have the same address for both. But, your registered agent should let you use their address as a principal business address. Or your principal business address provider should be able to perform the duties of a registered agent.
There are companies that offer you both these as a combined service.
Think of your registered agent address as the super-critical address that receives all your important documents.
And think of your principal business address as the official address of your business that you put on your website and where you receive your general business mail.
Your principal business address can be your home address, co-working space, virtual office or even a mailbox provider. It is not a legal requirement in most states.
Registered agent address
- Point of contact for Secretary of State & Feds
- Handles important notices and annual reports
- Should be located within the state
- Can serve as principal business address at an additional cost.
Principal business address
- Point of contact for most business purposes
- Handles general mail
- Can be located outside the state
- Can be your home address(although, not preferred)
Some states like Wyoming require you to mention your principal business address during the process of business registration.
Make sure you plan the type of addresses you want during the time of formation/incorporation.
You can have any US home address as your principal business address. But it may look unprofessional and you may not want your home address on your business cards, websites, and everywhere else.
What about virtual offices, mailbox providers and PO boxes?
Virtual business address
- Virtual business address or virtual office is a real street address you can give to suppliers, banks, customers and government agencies(like IRS for EIN, FAA, Coast Guard and other state qualifications). They typically come with mail handling. All the general mails you receive are scanned and uploaded to an online portal.
- They may come with package handling, storage and call handling as well.
- When co-working spaces offer virtual business addresses, you will get an option of booking meeting rooms.
- Mailbox providers give a real street address and handle all your incoming mails and documents. They would scan the documents or forward them to you.
- They will not have all the services offered by a virtual office. That makes them more affordable than a virtual office.
- PO Box is a lockable box with a unique address, located at the premises of a post office station. You can choose the size of the PO box.
- You will have to personally visit the PO Box location to access your mails. They mostly do not have mail scanning or forwarding services.
- For LLC & Corporations, you cannot use PO Box address for your business license. They shouldn’t be used as your principal business address either.
A very popular topic: paying yourself.
All your effort, sweat and time put into growing your business.
Now, it’s time to reward yourself.
There are mainly 3 ways of taking money out of an LLC: Making a member’s draw, taking a salary or through dividends.
The last two methods are almost exclusively meant for LLCs elected as a corporation.
Change registered agent
Now, after registering your business, you may feel like changing your registered agent.
Maybe you found another service provider who has a better package deal.
Or you may have found a cheaper service.
Whatever your reason is, you can change your registered agent by filing some paperwork with your state.
In general, the process goes like this:
- Find a new registered agent.
- File special forms or an amendment with the Secretary of State. It can be done online in most states. But some need to be done in person or by mail.
- Costs $0 – $50 to file
- Notify your old registered agent about the change.
As an example, here is how it happens in Delaware & Wyoming.
- File a Certificate of Change of Agent form with the Delaware Department of State, Divisions of Corporations
- Submit by mail, fax or in person
- Costs: $50 to file
- Time: 2-3 weeks for normal processing
- File a Statement of Change by Business Entity form and Consent to Appointment by Registered Agent form with the Secretary of State
- Submit by mail, or in person
- Costs: $0 for regular LLCs & Corporations
- Time: Max 1 week for normal processing
As you have seen, registered agents have a critical duty to perform. In most practical cases, you will think about your registered agent only when they don’t perform their job.
And that’s not going to be a pretty situation to be in.
It is far easier to have someone else as your registered agent instead of you becoming your own registered agent. That will leave you room to focus on growing your business.
Frequently Asked Questions About Registered Agents
Here are the most commonly asked questions about hiring a Registered Agent:
Service of process notices are often legal notices served to a party during the time of a lawsuit. Typically these notices(like a summons) have to be submitted in person. In the case of a business, these notices are served to a registered agent.
Yes, but they have to fulfill the requirements of being a RA, including having a physical office and being available to receive notices during business hours. Their contact information will be made public as well.
Your company will run the risk of losing good standing with the state. Which could result in revocation fines when you can’t enter into legal contracts. You may also lose access to the state court system.