When registering a limited liability company (LLC), states require the appointment of a registered agent. In some cases, this is known as the statutory agent or agent for service of process.
What It Is
Businesses, including LLCs, have the right to due process and fair procedures. That includes the right to know if another party has taken legal action against the company. That is where a registered agent comes in.
An LLC registered agent is designated to accept legal documents from federal and state government agencies and services of process like summons and subpoenas on behalf of the company. They will receive the legal paperwork or document, sign for it, and send a copy to the business entity. If an LLC is registered in multiple states, then it will have to nominate and maintain a registered agent in each state.
Failure to have a registered agent comes with consequences. A business entity may risk falling out of its good standing status with the state. Some states also impose penalties, which can include fines, prohibition from entering legal contracts or gaining access to state courts, and even administrative dissolution of the company.
Not everyone can be an LLC registered agent. There are qualifications set by states. While these may vary per state, there are minimum qualifications that need to be met.
- A registered agent can be an individual or a third-party organization.
- The agent should have a physical street address in the state.
- They should be available in the registered office during regular business hours.
- If it is an individual, they should be a resident of the state.
- If it is a commercial registered agent, it should be authorized to transact in the state.
Choosing A Registered Agent
As stated earlier, it is not always necessary to select a third-party organization to serve as a company’s registered agent. Since most states allow individuals, members can serve as their LLC’s registered agent.
When someone decides to act as an agent, they will have to be ready for the responsibility. Once they are listed on the formation documents of the company, they will be the point of contact between the LLC and the state.
Since entrepreneurs may need to take on various roles during the early stages of forming a business, a lot of owners consider being the registered agent of the company to save money. However, they should always be ready to receive documents and be able to handle all of the responsibilities that come with the position.
Aside from requiring attention to detail, being an agent can also be time-consuming. You have to keep track of various documents and ensure that the company meets deadlines.
It is important to note that an LLC cannot nominate itself as the company’s registered agent. So if it decides to not hire a commercial registered agent company, then it has to list an individual’s name. In most cases, that person is a lawyer. But there are also instances when the individual registered agent is a member of the LLC.
Legally, it is possible for an individual to serve as an LLC registered agent. However, this may not be applicable to all companies. In most cases, hiring a third-party organization like DoMyLLC may be a better option.
Having a team of experts responsible for the receipt of legal and tax documents or other government correspondence can give a business owner peace of mind. It helps make sure that someone will always be available to accept important mail.
Additionally, the company will not have to worry about losing or misplacing business documents. It reduces the risk of missing deadlines for tax and reporting obligations too.
Another benefit of hiring a third-party is that it is easy to change a business location without filing for a change of registered office address with the state for every move. That is because the listed registered office is that of the agent.
People who value their privacy may not be the best ones to serve as registered agents. In some cases, an individual may have to disclose their home address to serve as the registered office. That means the address will be in the database of the governing agency in the state. All information in the said database is available to the public.
Companies looking for a reliable third-party organization can get in touch with our team of experts at DoMyLLC. Aside from our registered agent services, we also offer assistance with business formation. Contact us now to learn more.