5 Things You Need to Know about Registered Agents

Have you ever heard the term “registered agent” and nodded along, even though you have no idea what it means? You’re not alone. For lots of new business owners and entrepreneurs who are thinking about creating an LLC, this is unfamiliar territory.

In this post, we’re going to cover 5 common questions that new startups have about registered agents. With these answers, you’ll have a solid understanding of what these “registered agent” things are all about.

1. What exactly is a registered agent?

Registered agents do two main things: (1) receive important docs on behalf of the business that include mail sent by the state and other official government notifications; and (2) accept service of process on behalf of your business if it is being sued. All states require that businesses have registered agents. This way, there’s an official contact on file for your company, and the state and public know where to send important legal notices regarding your business.

2. Who, or what, can be a registered agent?

A registered agent can be an individual or a business, but it must be located in the same state where your business is registered or any state where you file an application for authority to do business.

3. When do you need to designate a registered agent?

You have to provide a registered agent when you register your business with the state and when you file an application for authority to do business in another state.

4. Does a registered agent need to play an active role in the operation of the business?

Nope. Being a registered agent doesn’t entitle the registered agent to any ownership or right to participate in the company. A registered agent’s job is solely to collect legal and tax docs and accept service of process if your company is sued.

5. Can a business owner be the registered agent for the business?

Yes, many business owners choose to be the registered agent for their own business. But there are some drawbacks here:

• Always available. You have to be available to accept service of process during business hours. Otherwise, you won’t be able to leave the office early or go on vacation without worrying about missing notice of a lawsuit. With a hired registered agent, you can be out of the office and still accept this paperwork.
• Address changes. If your business moves and you used the same address for the registered agent, a formal state filing is required in order to keep state records updated. This usually means paying a fee. If you hire a registered agent, you could move as much as you want without worrying about having to update your registered agent’s information.
• Privacy concerns. The registered agent’s address will be publicly available. This means marketers and spammers could have easy access to your address—so you could be subject to receiving unsolicited junk mail. If it’s important for you to keep your address private, hire a third party registered agent.

If you’re looking to hire a registered agent, there are plenty of options you can find by Googling “registered agent services.” We like Zen Business the best of all the ones we've tried (easier onboarding and clean interface) -- but they're all pretty similar.

Good Rule of Thumb When Thinking About Registered Agents

One good way to think of it is -- if you're a business owner and are only doing business in your home state, usually you'll be the registered agent. But if you need to file for foreign registration in a different state, it usually makes sense to hire a different company to serve as your registered agent in that state.

Now that you’ve got a better sense of what registered agents are and why they matter, you should feel more confident in designating one for your new business. If you're ready to set up an LLC, check out our detailed guide for help or use Legal GPS for Business to guide you.

Do you need a lawyer for this?

The biggest question now is, "Do you need to hire a lawyer for help?" Sometimes, yes (especially if you have multiple owners). But often for single-owner businesses, you don't need a lawyer to start your business.

Many business owners instead use tools like Legal GPS for Business, which includes a step-by-step, interactive platform and 100+ contract templates to help you start and grow your company.