When an entrepreneur goes to create their first business, one of the options they’re likely to choose is registering as an LLC. For many new business owners, this could be an excellent option that protects them from debts and liabilities their business could incur. When filing as an LLC, one of the first things a new company is likely to realize is that they need a registered agent. When choosing an LLC registered agent for their new business, entrepreneurs would be wise to consider these criteria and traits.
What Is A Registered Agent?
Before selecting an LLC registered agent, new business owners should have a sound understanding of the roles and responsibilities for the position. A registered agent is someone who acts as the point of contact for the LLC. Registered agents could be someone who is employed by the company, the family member of an owner, or a trustworthy third-party such as a registered agent company.
Business owners must choose a registered agent for every state in which they’re registered as an LLC. LLC registered agents must have a physical address and be at that location during standard business hours in case they need to accept official legal correspondence. LLC registered agents must also be at least 18 years old.
Entrepreneurs looking to start their own business would be wise to jump in a bit deeper than these initial requirements, however. By the above definitions, most adults could serve as a registered agent. But new business owners must remember that LLC registered agents are an integral part of a company and could go a long way toward determining how successful a new business is. LLC owners should consider these five traits when selecting a registered agent to represent their company.
Personality Traits Of A Good LLC Registered Agent
When choosing a registered agent, LLC owners should emphasize finding someone who exhibits these personality traits.
Business owners must understand that LLC registered agents will have access to sensitive and personal information. It’s essential that they select a registered agent who is honest and who will not jeopardize the company. Credit card information, Social Security numbers, federal tax identification numbers, and other similar information could all end up in the hands of a company’s registered agent.
Additionally, registered agents are responsible for handling all correspondence related to a lawsuit. If information about a lawsuit were ever leaked, the company’s reputation is at serious risk. A lawsuit could potentially embarrass the business, its employees, and its customers. If this unfortunate situation were ever to arise, it’s crucial that a company can trust their registered agent to keep the matter private.
When it comes to choosing an LLC registered agent, business owners should pick someone who is reliable and will not let information slip through the cracks. A perfect example of the consequences of this is demonstrated in the late penalties that are often associated with an LLC’s annual report.
LLCs must file annual reports in every state in which they’re registered as a company. Unfortunately, the reporting guidelines vary significantly from state to state. One state may require all businesses to submit their annual report by April 15 every year, while another state may require companies to provide their reports by the end of their anniversary month.
The penalties for missing these deadlines could be severe. Although they too vary from state to state, some states may move to dissolve an LLC if they do not file within two months of their filing deadline. As an LLC grows, it becomes more and more difficult to keep track of the deadlines, which is why it’s essential that the company choose a reliable registered agent.
3) Strong Communication Skills
Not only do entrepreneurs travel, but as their business grows, they will have registered agents representing them in multiple states. They will not have the time and resources to check in with these registered agents every day. It’s crucial to find a registered agent who demonstrates strong communication skills. If the registered agent receives legal correspondence, the LLC owner must trust that they’ll then receive notice from their registered agent in a timely fashion.
Work-Related Traits Of A Good LLC Registered Agent
In addition to finding a registered agent who demonstrates the traits listed above, business owners should also look for a registered agent who exhibits the following work-related character traits.
Often, a company’s registered agent is the only interaction a third-party has with that company. Someone’s opinion about a company could be made up entirely based on their interaction or communication with that company’s registered agent.
For example, imagine an entrepreneur opens a new business to help people with tax filings. A government agent delivers legal correspondence and has an unprofessional experience. Perhaps the registered agent was rude or not courteous. Now, the individual who provided the mail has a terrible impression of the tax filing company, even though the registered agent may have been a third party who had nothing to do with the company’s daily operations or corporate culture.
The government official now not only won’t use the tax service company for themselves come tax season, but they’ll likely go out of their way to tell their friends, family, and coworkers about the horrible experience they had. The LLC could end up missing out on valuable business based on no fault of their own. This demonstrates why it’s crucial that business owners choose a registered agent who is professional at all times and understands that they represent the LLC.
As a business grows, so too does the number of states in which they have to file as an LLC. Business owners should look for a registered agent who has a sound understanding of the documents and paperwork required in that state. Third-party registered agent companies can file paperwork on behalf of a company, and they are incredibly knowledgeable when it comes to understanding what documents are relevant and what aren’t.
Utilizing the services of an experienced registered agent allows business owners to focus on the day-to-day operations of their business. Because they won’t have to worry about legal paperwork and correspondence, they can devote their efforts into growing the company. An experienced registered agent could go a long way toward determining how successful a new business is.
Business Filing Section