Registered Agent – What Do They Do and Does Your Business Need One?
This is how the story goes. You are ready to start your small business and you’ve picked the business structure that suits your needs – so, what now? The next step is to fill out the paperwork and choose your registered agent.
Some small companies list their owners as registered agents. But, not just anyone can do it. There are a few requirements in order to make it happen. And we will explain it all in just a second.
In this article, you will find information about what’s the role of a registered agent and does your business need one.
What Is the Role of a Registered Agent in Your Business?
A registered agent is a person who is authorized to receive and process all legal documents on your company’s behalf. Every US state requires legal entities to have one. If you’re still wondering why – here it is!
The main reason for a registered agent requirement is the fact that the state needs to have a reliable way to send legal documents to your business. For example, if you fail to receive the summons, subpoenas, or regulatory, and tax notices – the state knows the way to deliver them to you through your registered agent.
Whether it’s you or you hire a professional, your physical address (not P.O box) needs to be in the same state as your business. Furthermore, whoever is your registered agent needs to be available during business hours and is your legal point of contact with the government. For businesses that exist in several states, you will need to appoint one registered agent per state.
Why Wouldn’t You Just Do It by Yourself?
So, you came this far – read all of this and thought – why to waste money, I’ll just do it myself. Well, here’s the catch. A registered agent is not “just” someone to receive your legal documents. There are some specific reasons why hiring a professional as your registered agent will ease your mind. Here’s the list of things to think about before deciding that might change your mind.
First and Foremost – Privacy
If you are a web or home-based business, chances are you don’t have a physical address for your business. So, you will list your home address right? What’s the problem? Well, a list of registered agents and their addresses are matters of public record which means you will let the whole world know where you live.
Keeping Up With Deadlines and Filling Out the Paperwork
Definitely, being a business owner means you have a lot on your plate. In that case, you probably want to avoid the additional burden of paperwork and worrying about deadlines. When you hire a registered agent, they will have a system or software in place to track and notify you when tax reports or other legal documents are due to preserving your business in good standing with the state. So you don’t have to worry about it. Additionally, they will keep all your important documents in one place.
Availability During Business Hours
As we stated above, one of the requirements is to be available during business hours. When you list yourself as a registered agent, you will have to be there – at the address, you stated – from 9 to 5 every working day. And as you can imagine, that’s a hard one. What if you go to meet your new vendor and there’s no one to sign off your legal documents when they arrive? One more reason to hire a professional and have a guarantee this scenario won’t happen.
This one is a no-brainer. Your business blossomed and you’ve registered another one in a different state. However, you have no physical address there as well. That’s where the registered agent service can do wonders for you and make this new start and transition a lot easier.
To Sum it up
Here we are at the end. By now, you have probably painted a decent picture about what is a registered agent and what they do for your business. But, if you missed any of it – let’s do a recap!
If your business is registered as an LLC, corporation, or other formal business structure, you need to have a registered agent. This person will serve as a point of contact between your business and the state.
You can appoint yourself, your partner, or an employee as the registered agent. But, important to realize here is that your agent must be someone who is available during business hours all day, every working day of the week.
As you legally form your corporation or LLC, think through who will be the registered agent for your business. Choosing the right agent can be a really valuable asset to your company.
Maybe you still have doubts and we are here to help you. YPTA offers consulting services to businesses to assist you along the way. Contact us today to find out more!