A registered agent is a person or entity that accepts mail and documents on your behalf. States generally require that businesses keep a registered agent on file with them so that they can send important legal and tax documents to them.
Q1 2021 hedge fund letters, conferences and more
What a registered agent does
Limited liability companies (LLCs), corporations and partnerships are all required to have a registered agent. The agent basically receives mail on behalf of the business, including government correspondence, service of process notices and compliance-related documents. In addition to receiving important documents, the registered agent must also forward them to the business in a timely manner.
A registered agent can be a person or an entity. Some business owners decide to be their own registered agent, while others hire a service to do it for them. The main requirement that must be met is that the agent must be a resident of the state in which the company is registered. They must also have a physical address in the state to which documents can be delivered. In other words, a registered agent can't use a Post Office Box as the mailing address to receive documents.
Important things to keep in mind
Choosing yourself or another member of the company to be the registered agent may seem like a no-brainer, but there is something important to keep in mind. Whoever is designated as the agent must be available to receive documents at all times.
In other words, if the person takes a vacation or even steps out of the office for a few hours, the documents can't be delivered because they aren't available. The consequences of your registered agent not being available when delivery must be made can be very severe.
Another thing to keep in mind is that all documents, including legal documents in the event of a lawsuit, will go to the registered agent's address. If the person is someone in your office, it means such documents could be delivered in front of your customers, which wouldn't be good.
Choosing a registered agent service
For these reasons, you may want to choose a registered agent service to accept documents on your behalf. Companies like LegalZoom, IncFile or TRUiC can help you decide which service to use for your business by giving you several names to consider. Because they are a professional service, they will ensure there is always someone around to accept legal or tax documents on your behalf.
States generally require businesses to designate a registered agent when they file their formation documents. If your registered agent changes, you will have to file the appropriate state form reporting the change.
Some business owners decide not to maintain a registered agent after filing their formation documents, resulting in serious consequences. For example, the business may not be considered to be in good standing with the state in which it is registered. It could also face fines and penalties and lose its ability to file a lawsuit or enter into contracts.
The most obvious problem with not maintaining a registered agent is not receiving essential documents or correspondence that requires a response. For example, you might not know you are being sued if you don't have a registered agent to receive service of process about the lawsuit. If you don't show up to the court proceedings, a default judgment could be made against you.
It might not seem like having a registered agent is a big deal, but it is a crucial requirement you can't afford to be without. The person or entity is more than just someone to receive regular mail, as they must be available at all times during normal business hours. You may want to consider hiring a third-party service to be your registered agent.
