If you’ve decided a corporation or limited liability company (LLC) is the best business structure for your company, you’ve probably come across the term “registered agent”. When you register your business with your state, you need a registered agent. Here’s what you need to know about what a registered agent for an LLC is, whether you really need one, and where you can find one.
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What Is a Registered Agent?
A registered agent is a person or company that is designated to receive legal correspondence on behalf of the company—such as an LLC—and relay important messages to the owner in a timely manner. This includes government, tax and legal correspondence.
Do I Need a Registered Agent?
If you’re starting a new company and have begun researching LLCs and other business structures, you might be wondering: do I need a registered agent? The answer is yes. You are legally required to list a registered agent as part of your LLC or corporation.
Registered Agent Legal Requirements
There are a few legal requirements for a registered agent:
- Physical address. The agent needs to be located in the same state as your business. They are required to list a physical address (not a post office box) and be physically present at this location during standard business hours.
- Who can be a registered agent? You can list yourself, an employee, your lawyer or a trusted friend or relative as your registered agent, but this could pose issues if the person listed is out of town or not able to receive mail. A professional registered agent service can help solve this problem. Ultimately, there are pros and cons to these options.
- State–specific laws. Many states have specific laws regarding registered agents. Be sure to check with your state legislature to ensure you are following important guidelines.
Do You Need a Registered Agent for an LLC?
When you form a limited liability company (LLC) or corporation, you’re required to list a registered agent. A registered agent is a person or entity you have appointed to handle necessary government, tax and legal correspondence about your business. The main purpose of a registered agent is to ensure your business receives essential and time-sensitive information.
If your business is sued or subpoenaed, the opposing party will send notices to the registered agent listed in your business’s public records with the state. A reliable registered agent will let you know right away when documents arrive, giving you as much time as possible to respond. Without a registered agent, important correspondence can be lost in the shuffle of your other business mail, causing you to miss deadlines and suffer legal and financial consequences.
Should I Be My Own Registered Agent?
You can list yourself as a registered agent for your business, but this can pose some issues if you do not work from one physical location or are not present at the physical location you list during normal business hours.
Hiring a Registered Agent
You can hire a registered agent service for an annual fee. This can solve many of the problems that listing yourself as your registered agent could pose.
Hiring a professional registered agent from a service will give you the assurance that someone will always be available to receive important legal mail and relay it to you in a timely manner. Annual fees for a registered agent service average between $50 and $300 per year. Many registered agent services operate in all 50 states. If your company is registered to do business in multiple states, you can hire one company to handle all your registered agent needs.
5 Reasons You Might Need to Use a Registered Agent Service
If you’re debating whether to act as your own registered agent or use a third-party service, here are some important considerations.
1. Official Mail Duties
It can be a burden to sift through junk mail and urgent documentation you need for your company, and many people choose to outsource this task to a service they can trust to handle official correspondence. When you hire a registered agent service, you ensure that all essential documentation gets handled and relayed to you on time.
2. You Want to Keep Your Personal Address Private
When you list yourself as a registered agent for your business, you risk exposing your personal information to public records, especially if you work from a home office.. Hiring a registered agent allows you to maintain a barrier of privacy.
3. You Want to Keep Legal Matters Confidential
In some states, legal notices are delivered in person by a law enforcement officer or process server. If your business is involved in a legal action and you’re the registered agent, you may be served with legal documents in front of customers and employees. This can be embarrassing and cause unwanted gossip and speculation. A registered agent service ensures you’ll never be placed in this position.
4. You Aren’t in the Office During Normal Business Hours
A registered agent is required to be present at the listed address during normal business hours.
If you work nontraditional hours, don’t live or work in a fixed location, are out of the office frequently, have an unpredictable schedule, or aren’t sure you’ll always be present in your own location f during the workweek, a registered agent service can be the solution you’re looking for. These services charge an annual fee, usually between $50 and $300. This way, you’ll ensure all important documentation about your company gets relayed to you in a timely manner.
5. You Want to Expand Your Business to Other States
You–or any other individual person– can only act as registered agent for your business in the state where you live. If you want to expand your company to another state, you’ll need a registered agent that lives in that state or is authorized to do business there. A registered agent service can be a good solution.
What Can Happen If You Don’t Have a Registered Agent?
A registered agent is required when you register your business as an LLC or corporation. You’re responsible for keeping your registered agent information up to date with the state. If the agent you listed moves to a new location, you’ll need to update the agent’s address. If your agent moves out of state or the service you are working with goes out of business, you’ll need to appoint a new registered agent. Check your state’s business filing website for forms and fees for changing registered agent information. For additional info, check out our guide to why you need a registered agent.
If the registered agent you listed is not available to receive your mail, it could have negative consequences for your business. For example, you could miss important government correspondence such as annual state filings. Or you could miss a notification about a lawsuit filed against your company and, consequently, not respond on time. This could mean that a court could issue a judgment against your company before you have a chance to defend yourself. Failing to have an available registered agent could cause the state to suspend your right to operate your business.
Frequently Asked Questions (FAQs)
Can a registered agent have a virtual address?
Registered agents must have a physical address capable of accepting physical mail during business hours.
Can I be my own registered agent?
You can list yourself as a registered agent, but keep in mind that there are potential issues with doing so. The listed registered agent must be present at the address listed to receive government, tax and legal correspondence during official business hours. You will need to include a physical address and not a P.O. box, so listing your personal address can risk exposing your personal information to public records.
How much does a registered agent service cost?
Hiring a registered agent will cost you between $50 and $300 annually.
What are the pros and cons of being my own registered agent?
The most significant benefit to listing yourself is cost. When you list yourself, it’s completely free. However, the downsides are that you risk missing necessary documentation or correspondence and exposing your personal information to public records that will publish the address you list as part of your LLC or corporation.
Can I be penalized for not having a registered agent for my business?
There are consequences for not having a registered agent: You won’t receive important government and tax documentation and could risk missing important notices about any lawsuits against your company. Not having a registered agent could result in the state suspending your company’s right to conduct business.
When is hiring a registered agent service a good idea?
If you are frequently traveling, do not work from one location during business hours, run your company remotely or don’t want to expose your personal address on public records, you may want to consider hiring a registered agent service. Additionally, if you want the peace and mind of making sure your government, tax and legal correspondence will be received by a third party and sent to you in a timely manner, it’s a good idea to hire a registered agent service.
