The short answer is because it is the law! In most states it is a requirement to have a registered agent if you want to form an LLC.
In this article we give you full details on why you definitely do need a registered agent, what a registered agent does and where to find the right registered agent service for your business.
What is A Registered Agent?
A registered agent, also known as a statutory agent or resident agent, is a person or company designated to receive legal documents on behalf of your LLC.
These documents may include legal summons, subpoenas, and other official notices.
The registered agent’s role is to ensure that the LLC is aware of any legal proceedings and can respond in a timely manner. This is important because if the LLC does not respond to legal documents, it could lead to default judgments, fines, and even the dissolution of the company.
The registered agent is responsible for maintaining a physical address within the state in which the LLC is formed that is open during normal business hours to receive services of these documents.
See more here on the role of a registered agent.
Who Needs a Registered Agent?
A registered agent is typically required for businesses that are organized as a corporation or limited liability company (LLC). In the United States, it is a legal requirement for LLCs to have a registered agent in the state where the LLC is formed. The registered agent is responsible for receiving legal documents and official notices on behalf of the LLC.
Other types of business entities, such as sole proprietorships and partnerships, may not be required to have a registered agent, but they may still choose to have one for the purpose of receiving legal documents and official notices.
In addition, companies that are doing business in multiple states may also be required to have a registered agent in each state where they are registered to do business.
In summary, corporations and LLCs are the main type of entities that are legally required to have a registered agent, but other types of businesses may also choose to have one for the purpose of receiving legal documents and official notices.
Registered Agent Legal Requirements
The specific requirements vary from state to state, but as a general guide these are the typical hurdles that must be met for a registered agent (called a statutory agent or resident agent in some states).
- Must have a physical address (not a P.O. Box) within the state where the business entity is registered.
- Must be available during normal business hours at that physical address to receive legal documents and official notices on behalf of the business entity.
- Must be authorized to do business within the state and have the ability to accept legal documents and official notices on behalf of the business entity.
- Must be able to maintain accurate and current records of the business entity, including the names and addresses of its owners or members.
- Must be able to forward important documents and notices to the business entity in a timely manner.
- May not be the business entity itself or an owner, officer, or employee of the business entity.
- Must be over 18
In addition to these general requirements, some states may have additional requirements or restrictions on who can serve as a registered agent. It is important to check the specific laws of the state where the business entity is registered to ensure that you meet all the necessary requirements.
It’s also worth noting that some business entities choose to use a commercial registered agent service, which is a company that specializes in providing registered agent services and can provide compliance and recordkeeping, and to ensure that legal documents are received and forwarded to the appropriate person in a timely manner.
Can I Be My Own Registered Agent?
In some states, it is possible for an individual to serve as their own registered agent for limited liability companies. However, it’s important to note that there are some restrictions and considerations to keep in mind before making this decision.
One of the main restrictions is that an individual cannot serve as their own registered agent if they are not a resident of the state where the business entity is registered, or if they cannot be physically present at the registered agent’s address during regular business hours.
Additionally, as the owner of the business, you may not always be available to receive legal documents and official notices, which could result in the business missing important deadlines or being in non-compliance with state regulations.
Another consideration is the privacy aspect, having a registered agent that is separate from the business entity ensures that your personal address and information are not publicly available through the state’s business registration database.
While it is possible for an individual to serve as their own registered agent, it is generally recommended to use a commercial registered agent service or a trusted third party, especially if you are not able to be present at your registered agent’s address during regular business hours, or if you want to keep your personal information private.
The other big consideration is your reputation – for example if you get served with legal notices, it is probably the last thing you want your neighbors seeing!
For more, see our article on the risks of being your own registered agent!
Should I use a Registered Agent Service?
Yes, using a professional registered agent service is the best way to take care of this requirement – for simplicity, peace of mind and particularly if you want to operate in multiple states.
Registered agent services such as Northwest Registered Agent and ZenBusiness (our favorites) are cost effective and reliable.
See below for our top registered agent services and this article for full reviews of all the main registered agent services.
These services operate in all states and offer cost effective registered agent services.
Price: $99 per year
Best customer service
Price: $125 per year
Price: $119 per year
Best no frills
Price: $99 per year
Price: $299 per year
How Much Does a Registered Agent Service Cost
Typically it will cost you between $50 a year and $300 a year for a registered agent service.
The very cheapest registered agents tend to be local ones that might only operate in one state and have less sophisticated systems and services.
We recommend going with one of our recommended national services for coverage wherever you are and great value bundles where you can form your LLC and get free registered agent service for a year.
See here for info on choosing a registered agent in any state.
What Will My Registered Agent Do for Me?
The registered agent will receive paperwork from the state and also track the status of your LLC when it comes to filing annual reports and statements.
Your registered agent will also keep accurate and current records of the business entity, including the names and addresses of its owners or members.
The registered agent is responsible for accepting legal documents, such as summons, subpoenas, and other official documents, on behalf of the LLC or corporation.
This ensures that the business entity is aware of any legal proceedings and can respond in a timely manner.