What is a Registered Agent?
In the United States, most business entities (including LLC’s) are required to appoint and maintain a registered agent. The registered agent will receive service of process (SOP) when a business entity is a party in a legal action, e.g. a lawsuit. Failure to appoint and maintain a properly functioning registered agent can have serious consequences for a company. The exact term used varies from state to state. “Registered agent” is the most common variant, but “statutory agent” or “resident agent” is also used.
Many companies appoint their attorney as their registered agent or use a special registered agent service company. It is also common for incorporation service companies to offer registered agent services.
Who can be a Registered Agent?
The registered agent can be an individual or a company.
The registered agent must have a physical address in the same state as the company for which is serves as the registered agent. The address can not be a post office box or similar.
The registered agent must always be available at the registered address during business hours.
What will the Registered Agent do?
The state have made it mandatory for most business entities to appoint and maintain a registered agent since it wishes to ensure that the company can be contacted at all times. The registered agent will be mandated to accept service of process (SOP) on behalf your company.
Your registered agent will for instance be the one contacted by claimants that wishes to place a claim against your company. Tax notices will also be sent to your registered agent.
Can I be the registered agent for may own company?
Yes, you can.
Why do companies appoint attorneys or service companies as registered agents instead of doing the job themselves?
As mentioned above, it is perfectly legal for you to be the registered agent of your own company, but it is often unpractical. The registered agent must always be available at the registered address during business hours. This means that you cannot leave the office to help clients, visit business acquaintances, pick up supplies, have lunch, run errands, and so on. Sick leaves and staying home to tend to sick children is also impossible, since you always have to be available at the registered address during business hours.
Another reason why many people chose to appoint a third party as registered agent is that it can be unbefitting to have a service of process or any other type of sensitive legal document delivered to the office among clients, business acquaintances and staff. If you work from home, you might wish to keep family and neighbors out of your private business.
What happens if a fail to maintain a properly functioning registered agent?
Failing to maintain a properly functioning registered agent is serious because the state can revoke your company status. An LLC can for instance loose its LLC status, which will have severe legal consequences and affect taxation.
Another problem with having an unreliable registered agent is that you might not find out about legal claims against your company until it is too late. If your company fails to show up in court, judgment may be entered against you without you having a chance to defend yourself.
