What Is A Registered Agent?

September 25, 2020
Business Banking
What Is A Registered Agent?

If you are creating a new business, you may need to assign a registered agent to accept legal documents on behalf of the company. Many states require one, especially if the owner is not physically located in the business’ registered state. So what is a registered agent, why might you need one, and what do you need to consider before choosing one? If you’re not sure where to start or you’re not really convinced that a registered agent is right for you, this article can help you figure out what is best for you and your business.

What is a Registered Agent?

Also known as a resident agent, statutory agent, or agent for service of processes, a registered agent is an individual or business who is able to receive service of process (SOP) on behalf of a business entity. Usually, a registered agent acts when the business is part of legal action like a lawsuit, but registered agents can also file legal paperwork when registering a business with the state. The services that a registered agent provides typically include filing legal paperwork on behalf of the business, receiving and acting on summons’ to appear in court and other legal documents, and maintaining contact with the business entity. Since the registered agent is the legal liaison for the company, they need to be able to effectively communicate with their representative company in order to ensure that the company is not sued and fails to act on those litigations. A registered agent will typically communicate with the company’s corporate secretary or governance officer in order to ensure that proper representation occurs. A registered agent is typically assigned by a business when it first formally registers with the state. This is often required so that a business’ point of contact is known and publicly available through the Secretary of State. A business also needs to inform the Secretary of State when the registered agent has been changed.

Why Do I Need a Registered Agent?

Any legal entity or business will want to have a registered agent. In most cases, your state may require that you assign a registered agent as a contact person during business hours, especially if the business owner does not live in the state that your company is registered in. P.O. boxes are not allowed for registered agents. Typically, businesses are owned and operated by a number of individuals. If anyone of those individuals receives a summons and is not prepared to appear in court, then the person or entity suing would win by default judgment and could cost the company thousands if not millions of dollars. A registered agent will prevent this. By appointing a registered agent, you are formally recognizing to the state and other individuals that this person is registered to receive legal paperwork on your behalf. Their job will also be to inform the business that legal action has been taken against a company so the company can inform their lawyer and representation is present.If the state that your business is registered in does not require a registered agent, you should consider getting one anyway. In some cases, this might be a registered agent provided by your company lawyer (although you should be careful when using your company lawyer as your registered agent). Find a registered agent who is prepared to receive and respond to legal documents, someone who has a physical location in the state your company is registered, and someone who is available during business hours in order to receive summons’.

Choosing a Registered Agent

Choosing a registered agent should be straightforward. The most important aspect of a registered agent is that they are available to accept legal paperwork, are reliable in informing your company about this paperwork, and that they are organized enough for the paperwork to not get lost or forgotten. Here are some items to consider when choosing a registered agent:

  • Go with a professional service rather than a freelancer.
  • Are they able to be open during regular business hours?
  • Is their physical office in the registered state of your business?
  • Do they have multiple physical offices available in multiple states?
  • Consider a nationwide provider.
  • Consider the value of their services and not just the cost.
  • Evaluate the service levels that they offer; do they provide all of the services that you need?
  • Evaluate any software that they use; is it reliable?
  • Inquire as to how they will communicate with you, as this is an important aspect of their job.

Consider a registered agent as a vital part of your business’ day-to-day operations. Without a reliable registered agent, your company and all its assets could be successfully sued and your company could go under simply because the court summons was lost or someone failed to respond to it.

LLC Registered Agent for your New Business

Finding a registered agent for your new business or LLC can be daunting, but it doesn’t have to be. Be sure to do your research to determine the exact services that you need and if the services provide what you need. You can consider finding a reliable LLC registered agent with Northwest Registered Agent, who can also support the formation of your LLC by filing your business paperwork. This can be extremely helpful, especially if you are needing to set up multiple LLCs or LLCs housing other businesses. A registered agent will be able to sort through the legal documents to make this process simpler.

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