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You need a registered agent if you have an active company, such as an LLC, C Corp, or any other entity type. When choosing how you’ll satisfy that requirement, you’ve got some options.
But what is a registered agent? And how do you decide who to designate as your LLC’s registered agent?
What Is a Registered Agent?
An LLC registered agent is an individual or entity designated by an active company, such as an LLC, C Corp, or any other entity type, to receive service of process notices, government correspondence, and compliance-related documents on behalf of the company.
While generally, the term “agent” means someone authorized to represent an individual or an entity or enter into transactions for an individual or an entity, registered agents don’t have a similar mandate.
The registered agent for an LLC has one primary function: to be an agent for service of process, as well as receiving other important correspondence on behalf of the company. Additionally, a registered agent must promptly forward such materials to an active company, such as an LLC, C Corp, or any other entity type.
Registered Agent Requirements
The requirements that must be met to be eligible to be a registered agent are quite simple. A registered agent must be a resident of the state in which you registered your company or companies are registered.
A registered agent must also have a physical address to deliver documents. This means a P.O. mailbox can’t be used.
While these requirements are simple, it’s important to look more closely at who you should designate as your registered agent.
Designating Yourself or Another Member of Your Active Company, Such as an LLC, C Corp, or Any Other Entity Type
At first glance, designating yourself or another member of your active company, such as an LLC, C Corp, or any other entity type,
as your registered agent may be a good idea. But there are a number of things you should keep in mind.
First, a registered agent must always be available to receive service of process notices, government correspondence, and other important documents. This means the registered agent must always be present at your registered physical address during normal business hours.
If the registered agent can’t be found—for example, if the person you designated takes holidays or even occasionally goes off-site to attend a meeting with a client—delivery can’t be made, and the consequences can be quite severe.
Other considerations? Generally, if you designate a member of your LLC as the LLC’s registered agent, the physical address you use for service will be your place of business, as that’s where your registered agent is likely to be during regular business hours. It can therefore be quite embarrassing if someone sues your company and serves notice of the lawsuit in front of your customers or clients.
And if you move your business, you’ll have to file a change of address for your registered agent. With a third-party registered agent, you can move your business as often as you want without it affecting the address of your registered agent.
Third-Party Registered Agent Services
In many cases, using a registered agent service as your registered agent makes sense to receive documents on your behalf and forward them promptly.
Because these third-party firms are professional registered agents, you have the assurance there will always be someone available during standard business hours to take delivery of notices and other documents on your company’s behalf. You can also rely on them to promptly forward notices and other documents.
What Happens if You Don’t Have a Registered Agent?
Generally speaking, you’ll be required to designate a registered agent when registering your LLC. If your registered agent changes, you’ll need to file a form indicating this change.
It might be tempting not to maintain a registered agent after initially designated one when you registered your company. However, you face serious consequences if you do not have a registered agent.
Your company’s no longer considered in good standing with the state in which you registered, and in addition to subjecting your company to potential penalties and fines, your company could, among other things, lose its ability to enter into contracts or bring a lawsuit.
There’s also the risk of not receiving service of process or other important correspondence which requires a response.
For example, if you do not receive a service of process regarding a lawsuit, you won’t be aware that you’re being sued. And if you’re not aware you’re being sued, you won’t respond promptly, nor are you likely to appear at the court proceedings, and a default judgment could be issued against you.
In the case of compliance-related government correspondence, failure to respond could result in penalties such as fines and other sanctions.
While a registered agent with a company provides a basic and simple function, it’s also extremely important. Selecting a registered agent that can adequately perform this function is an important process for your LLC company and your peace of mind.
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