When you register your LLC, you have the option of stating a legal statutory agent. While not all states require you to have one, for a new business owner, having a registered agent is a convenience they should look into. But what is a registered agent, and what do they bring to the table for a company? Here, we’ll unpack the mysteries surrounding a registered agent’s post and inform you why having one is an excellent consideration, especially for a new business owner.
What Exactly Is a Registered Agent?
The Balance SMB notes that a registered agent exists as a contact to receive state and federal legal correspondence as well as service of process on behalf of a company. They need to share a location (as far as the state goes) with the area where the owner registered the business. If the enterprise has to receive government notifications and tax forms, it will be sent directly to the registered agent, who can then forward it to the company. In the same vein, if subpoenas or lawsuits are to be filed against the corporation, the agent serves as the point of contact to deliver those documents.
Why Are Registered Agents Essential?
Businesses need to have a contact person that is in-state that government officials can get in contact with. In some parts of the country, companies can incorporate within a state without physically being there. Mental Floss mentions that Delaware appears on many LLCs’ incorporation documents, simply because of how easy their incorporation documents are to fill out and their favorable tax rate to companies. When a business is registered like this, agents need to be present to receive correspondence in-state. You can’t use a P.O Box to act as your registered agent. As a result, incorporation companies usually offer their services as registered agents for businesses for a small yearly fee.
You Can Be Your Own Registered Agent
If you’re incorporating a company inside your own state and already live there, you shouldn’t pay someone else to act as your registered agent. However, there are some cases where you may want to obscure your address. As the company’s registered agent, your address is publicly viewable for anyone who wants to communicate with the entity. If you work in a sensitive industry or prefer to protect your privacy, registering an agent is an excellent option. Agents are also useful if you need to leave home for extended absences or leave to go on vacation.
What Happens When You Don’t Have a Registered Agent?
In some states, a registered agent is a requirement, but it’s more of a suggestion in others. A business without a registered agent risks falling out of good standing with the state. Issues with state legislatures can have significant and lasting impacts on a business’s ability to function. They may lose the chance to compete for state contracts or be unable to access the state court system. If such an event occurs, businesses will need to pay extra for reinstatement as well. It may be better to simply have a registered agent to deal with the state on your behalf in the long run.