Do Most People Become Their Own Registered Agent

A registered agent is an individual or company that receives service of process, legal documents and official notices on your business organisation's behalf. When registering a business entity, y'all'll be required to engage a registered agent who has a physical accost in the country of registration.

Non just anyone can make full this role, though. There are sure rules you need to follow when choosing one. Find out why you need a registered amanuensis, who you can appoint and how to modify agents.

Who needs a registered agent?

Whatever business that is registered with the state needs to engage a registered agent, likewise called a statutory agent or resident agent in some states.

The post-obit types of businesses need to appoint i:

Corporations
Express liability companies
Limited partnerships
Limited liability partnerships
Express liability limited partnerships (not recognized in every state).

If you take one of these business concern types, you'll exist asked to name your registered amanuensis during incorporation or business concern registration. There's typically a spot to designate your registered agent on your articles of incorporation or articles of system.

General partnerships and sole proprietorships don't need to designate i because these business types are non registered with the state. Of course, all businesses demand to keep up with business tax obligations and answer in a timely fashion to legal papers. Withal, the government doesn't keep registered agent data on file for sole proprietorships and general partnerships.

Why do you demand a registered agent?

States have required businesses to engage registered agents for decades. The master purpose is to ensure that in that location's a reliable way for the public, the courts and the authorities to contact your company. Once the country has your registered agent information, it's a matter of public record. Anyone searching through a concern entity database can find out who serves this part for your company.

More specifically, here are the three chief reasons why registered agents are important:

Receive legal process: People with legitimate legal complaints confronting a business organisation have an address to send service of procedure.
Government tin contact you: The authorities knows how to contact a business that's delinquent on taxes or noncompliant with other laws.
Stay in compliance: Official papers notifying you of whatever activeness you need to accept go to one address.

Virtually businesses hire a legal service or an attorney to serve as registered agent. Your registered agent volition receive legal, taxation and other official mail for you, forward the documents to your business address and notify y'all of whatsoever deadlines or actions that you demand to take. For urgent documents, such equally notice of a lawsuit, you'll likely be notified the very same day.

Registered agent requirements

In general, registered agents must meet the following requirements:

Age: If you utilise an individual, they must be at to the lowest degree 18 years old.
Residency: If you use an individual, they must be a resident of the state of registration. If the registered agent is a company, it tin can exist a domestic or strange entity, as long as it's authorized to practise concern in the country.
Physical address: Must accept a physical address in the land of registration. This location is commonly chosen the "registered office." P.O. boxes don't count, and so you can't utilize a UPS Store, for instance.
Availability: Must exist available to receive postal service and sign official documents during normal business organization hours, Monday to Friday, 9 a.k. to 5 p.thousand.

Unlike states take slightly different regulations. For example, in Virginia, only licensed attorneys or officers or members of the business organisation tin serve equally registered agents. And Arizona doesn't mandate that registered agents need to be bachelor during normal business hours. Your state's business filing agency volition be able to tell you more about state-specific requirements.

In some states, the registered agent must submit a consent form indicating that they've agreed to be your company's registered amanuensis.

Keep in mind that if yous're registered to do business organization in multiple states, each state will require you to name a registered agent who has a physical address in that land.

Who can serve as your appointed amanuensis?

Every state gives yous the choice to appoint yourself, someone else inside the company or a third political party, as long every bit the appointed amanuensis meets the requirements mentioned above (plus any additional state-specific requirements). The only caveat — you lot tin't name your concern every bit its own registered agent. At that place needs to a separate, responsible political party, whether that's an individual or an outside agency.

Whatsoever of the following tin can serve:

Yourself
A business partner, officer, manager or member of the business organization
A business lawyer
A company that provides this specific service, such as LegalZoom or Rocket Lawyer.

Often, the quickest, to the lowest degree expensive way is to just appoint yourself or another person in the visitor every bit the registered agent. But concern owners ofttimes notice that this is too time-consuming or inconvenient and end up appointing either a lawyer or a service.

Joe Horan, the owner of Wrightwood Homes, an Indianapolis-based property buyer, says:

"I originally chose myself because information technology was the easiest manner to start my LLC. Simply I've recently chosen my attorney to be my registered agent. The master reason is that my attorney besides has her own real estate business, and so she understands the details of mine. She can handle all necessary paperwork and be the 'legal face up' of my business. Information technology's fairly cheap for the service. I pay about $100 per year for my attorney to exist the registered agent for my concern."

Rithvik Musuku, the president and CEO of Advancing Science Worldwide, went with an even less expensive option:

"In Arizona (where we are incorporated), a registered agent tin be any person, and there is no requirement for them to be bachelor during normal business organization hours. One of my family unit members living in Arizona is the registered agent for Advancing Scientific discipline Worldwide. I would suggest that those looking to outset a business wait into the registered agent requirements for their specific states."

Ultimately, the land doesn't care so much about who yous choose, as long equally they're doing what's required of them, so make sure your pick is convenient for you.

Reasons to utilise a legal service

Dozens of legal service websites, including LegalZoom, Rocket Lawyer and IncFile, offer registered amanuensis services for a fee. There are multiple benefits to using one of these services, as opposed to appointing yourself or someone else inside the company.

These are the benefits of using a legal service:

Inexpensive

LegalZoom, Rocket Lawyer and IncFile charge virtually $150 per year for registered agent services. Yous tin detect even less expensive services, only the dainty thing well-nigh sites like LegalZoom is that they too provide other kinds of legal assistance with business organisation setup and maintenance.

Every bit your registered agent, they volition accept all legal and official correspondence on your company'southward behalf, frontward y'all the documents and give you lot timely notifications about awaiting deadlines or actions that you lot need to take.

Saves you time

Nearly one-3rd of small-concern owners work more than 50 hours per week. If you lot're spending time sorting through official mail, that adds to your already busy lifestyle.

Past using a service, you're gratis to get on vacation or have time off without worrying that you're missing important mail. You too save time of going through junk mail. Since a registered agent'south accost is a affair of public tape, you will receive a lot of junk mail if you appoint yourself.

Privacy

Having a registered agent means that their address is public record, not your ain. This protects your business to some extent from spammers. In addition, when you have an appointed agent, y'all can avoid potentially embarrassing moments in front of customers. Imagine being served with a lawsuit while you're helping a customer. A service will transport you of import documents via email and postal post.

Organization

If you take a fast-growing business, it can be tough to keep all your important paperwork and deadlines directly. Having a registered amanuensis is one way to ensure that cipher gets lost in the shuffle. In add-on to accepting official correspondence, LegalZoom and many other legal services volition create a compliance calendar (similar the one pictured above) for your business, noting important government deadlines.

Matt Ross, co-owner of RIZKNOWS and The Slumber Yard, which operate multiple cyberspace backdrop, chose LegalZoom afterward using the website for LLC setup.

"We used LegalZoom to course our LLC, so we idea it was easiest to stick with them as our registered agent as well… Whenever they receive documents from the state, they immediately snail-mail us copies. Within the LegalZoom account portal, you lot tin can as well just download PDF copies of the documents likewise. In addition, in that location is besides a agenda within the LegalZoom business relationship portal that shows you when of import deadlines are approaching."

Photograph credit: Texas Secretarial assistant of State

Changing your registered agent

No affair who y'all select, you'll need to keep the information upwardly to date. Having a registered agent is an ongoing requirement, meaning that you need one equally long as your concern is operating.

If you change your registered agent or their contact information changes, you'll need to inform your state's business concern filing bureau. In most states, there is a change course (example from Texas shown higher up) that you can download and fill out online. Some states let electronic filing, while others require that yous postal service in the form. The fee for changing your appointed amanuensis is normally pretty depression, $25 to $50 in most states.

It'due south easy to forget about updating your registered agent, but make sure you lot fill up out the necessary papers. The fines for a lapse can be pretty hefty. And if y'all go besides long without an appointed agent, the state tin can revoke your document of good standing or fifty-fifty deliquesce your visitor.

A version of this article was commencement published on Fundera, a subsidiary of NerdWallet