In every state, when you form a business entity like a Limited Liability Company (LLC) or a corporation, you will be required to appoint a registered agent for your business. This requirement to designate a registered agent (aka: statutory agent, resident agent, or corporate service of process agent) came about as an aspect of what is known as due process. Due process states that before a lawsuit or other legal action can move forward in the courts, all parties in the lawsuit must be properly notified. Registered agents serve as a way to ensure your business can be properly notified should it be involved in a lawsuit.
Registered agents also serve as your business’ main point of contact with the state. When the state needs to communicate with or send tax forms or annual reports to your business, it will do so through your registered agent. In short, your registered agent accepts all tax and legal documents on your businesses behalf.
Hire a Registered Agent or Be Your Own?
It is true that in all states, you can be your own business’ registered agent. But do you want to be? Being a registered agent means being available at your business’ location during normal business hours, five days a week, something most new business owners have trouble doing since they’re busy starting their business. Being a registered agent also means being responsible for tax forms and tracking annual report dates with the state, things that can easily be forgotten and cost you in the long run. The one upside to not hiring a registered agent is you’ll save the annual fee, typically around $100. But the freedom you gain from hiring one often makes up for the expenditure.
What You Should Look For in a Registered Agent:
There are plenty of companies that offer registered agent service. As you can see on the registered agent market share charts, some companies own much larger shares of the market than others. But no matter the size of the company offering the service, you should make sure they offer you some form of the following:
A physical, trustworthy office location
The registered agent you hire needs a physical location in the state where your business is. Why? Because a registered agent is the person or business officially designated to accepts state and legal documents on behalf of your business. It is also required that your registered agent has a physical street address (a P.O. Box will not suffice), where they can be reached during normal business hours.
When running a business, you deal with a lot. The last thing you need to worry about is business entity compliance issues with the state. Your registered agent should do this for you. A hired registered agent service will receive notification from the state, and should have a way notifying you in turn quickly, so that your business can remain in good standing with the state and avoid costly fees and penalties.
Instant access to your documents
Your business will receive time-sensitive legal and state documents, and some registered agent services offer a secure online account where you can view your business’ sensitive, important documents. These documents should be locally scanned and safe, and available to you whenever you choose or need to view them.
A vast knowledge base and customer service
Customer service should not translate to you calling and instantly picking options on an automated server. Customer service means that you call a phone number and talk to a real human who knows what you’re talking about and can help you solve any business entity problems. If you choose to pay for registered agent service, this should be a given.
Help with filings
If you hire a registered agent, they should be knowledgeable enough and have the resources to help you register your new business entity with the state. This service should be able to personally contact and work with your state in order to help get your business up and running.