If you’re forming a corporation or limited liability company (LLC), in nearly all states you must appoint a registered agent for your business. In this guide, you’ll learn what a registered agent is, what they do, and who can be your registered agent.
Registered Agent Defined
A registered agent is simply a person or company authorized to accept official correspondence and documents on behalf of your corporation or LLC. Their job is to ensure that you stay in compliance with legal requirements, and that deadlines for official matters are not missed. This could apply to legal, financial, or tax matters.
Requirements to Be a Registered Agent
Each state has its own registered agent requirements. You can generally choose to be your own registered agent, or it can be another owner of the business. Alternatively, you can appoint a person, such as an attorney, or another business, such as a registered agent service, as your registered agent.
Usually, the requirements to be a registered agent are:
- If it’s an individual, they must be at least 18 years of age
- They must have a physical address in the state
- If it’s a business, it must be authorized to conduct business in the state
- Be available at the registered agent address to accept correspondence during normal business hours
Check with your state for more specific requirements.
Why You Shouldn’t Be Your Own Registered Agent
While again, you can be your own registered agent, it may not be a good idea for several reasons.
- You’ll have to be personally available at your registered address during normal business hours, which can restrict you from doing things that are necessary for your business. This can include sales calls or other business meetings.
- By choosing to be your own registered agent, your registered address becomes public record, since you must disclose your registered agent address on your business formation documents.
- You could be served with a service of process at your registered address, which could occur in front of employees or customers. That could make for an embarrassing situation if your business is being sued.
- If you decide to expand your business to other states, you’ll need to appoint a registered agent in those states as well. If you instead choose a national registered agent service, you can have one registered agent in all the states where you do business.
- As your own registered agent, you’ll likely receive a lot of junk mail, since your registered address is public record.
Registered Agent Services
Registered agent services will receive your correspondence, notify you of its receipt, and make documents available to you online, usually on a dashboard that you can access at any time. Some services will also notify you of deadlines contained in the correspondence to make sure they’re not missed.
Using a registered agent service will free you to do business as usual, and go anywhere you need to go. It will also ensure that no important correspondence or deadlines are missed, and that documents don’t get misplaced. Most registered agent services operate nationally, so they can be your registered agent in all states where you do business.
When choosing a registered agent service, you should shop around for the best price, but also read customer reviews to see what real customers have to say about their reliability and customer support.
Northwest Registered Agent is an example of a registered agent service. It has proven to be a reliable service, and is well priced, at $125 annually. They are also dedicated to providing excellent customer support and maintaining your privacy. You should do your homework, however, and weigh the pros and cons of using Northwest Registered Agent before choosing their service over competitors.
What If I Operate as a Sole Proprietorship or Partnership?
Sole proprietorships and partnerships require no state registration and have no registered agent requirement. However, with both those business entities the business and the owner or owners are considered one and the same. This makes the owners personally liable for the obligations of the business. So, if the business is sued or can’t pay creditors, their personal assets are at risk.
Both corporations and LLCs are considered separate entities from their owners, and thus have their own debts. This means that the owners do not have personal liability for the debts of the business.
Corporations are complex to form and come with many corporate requirements as well as corporate taxes, which is why many entrepreneurs choose an LLC instead. An LLC not only offers personal liability protection, but it also has pass-through taxation. The LLC is not taxed, and profits pass through to the owners to be reported on their personal tax returns.
An LLC also has much management flexibility and is not subject to corporate management requirements.
Appointing a Registered Agent
When you form your LLC, you’ll simply disclose your registered agent’s name and address on your formation documents, which makes them officially your registered agent. However, if you’re choosing a registered agent service, you’ll have to sign up with the service first. They will give you instructions about what information to include on your LLC formation documents in the registered agent section.
Most registered agent services also offer business formation services, so you could have them take care of the whole LLC formation process for you. This can often come with benefits. For example, Northwest Registered Agent offers a business formation package that includes registered agent services for one year.
Some services also offer an LLC operating agreement template and other services that can assist you with your business formation.
Forming an LLC or corporation comes with some requirements that sole proprietorships and partnerships do not, including the registered agent requirement. However, they both offer personal liability protection, which can keep your personal assets safe. If you form an LLC or corporation, using a business formation service or a registered agent service offers many benefits. Just shop around to explore the many services that are on the market to decide which one is right for you.