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4 min read

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.

 

 

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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.

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. Having a registered agent is a crucial requirement for all businesses, as it ensures that there is an official point of contact on file for your company. This means that the state and the public have a designated individual or entity to send important legal notices and documents regarding your business.

By having a registered agent in place, you can rest assured that you will not miss any critical notifications or communications that could impact your business operations. It provides a level of transparency and accountability, demonstrating that your business is compliant with state regulations and has a reliable representative for legal matters. So, whether you're just starting out or already established, having a registered agent is a fundamental aspect of maintaining a strong legal foundation for your business.

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. This requirement ensures that there is a designated representative available to receive important legal documents and notifications on behalf of your business in a timely manner.

By having a registered agent in the same state as your business operations, you can ensure seamless communication with government agencies and stay compliant with state regulations. Additionally, having a registered agent in place provides a level of professionalism and credibility to your business, as it shows that you have a reliable point of contact for legal matters within the state where you are conducting business.

 

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When do you need to designate a registered agent?

In addition to registering your business with the state, it is essential to designate a registered agent when filing an application for authority to conduct business in another state. This requirement ensures that your business has a designated representative to receive important documents and legal notifications in the new state where you plan to operate.

By designating a registered agent in each state where your business is active, you can stay compliant with regulations and maintain efficient communication with government agencies. This step is crucial for businesses looking to expand their operations across state lines and establish a solid legal foundation in multiple jurisdictions.

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 documents on behalf of the business and to accept service of process if your company is sued.

This means that while they play a crucial role in the administrative and legal aspects of your business, they do not have any decision-making authority or ownership stake in the company. Their primary responsibility is to ensure that your business stays compliant with state regulations and receives important notifications in a timely manner. So, rest assured that your registered agent is there to handle the legal paperwork and notifications, allowing you to focus on running and growing your business.

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.

 

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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.

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