Why Do I Need A Registered Agent
ComplianceJuly 27, 2020

Why do I need a Registered Agent?

What is a Registered Agent?

The Registered Agent receives state communications regarding important filings and changes in organizational requirements. The Registered Agent is also responsible for receiving notice of a lawsuit (“service of process”) on behalf of your business. When you form a company, part of the formation process in every state requires that you designate a Registered Agent (sometimes called a Resident Agent, Statutory Agent or Agent for Service of Process).

Can I be my own Registered Agent?

While states vary in their exact requirements for Registered Agents, there are three rules that generally apply:

  1. The Registered Agent must be a resident individual or a domestic or qualified out-of-state corporation, LLC or other business entity.
  2. The Registered Agent’s office address must be a physical address in the state. This means that a P.O. box does not qualify as an in-state address. Some states require you to designate a “Registered Office” in addition to naming a Registered Agent. The registered office is the registered agent’s address.
  3. The Registered Agent must be available during “normal” business hours Monday through Friday.

If you’re forming a limited liability company, corporation, or other business entity or expanding your business into another state, state statutes require you to designate and maintain a Registered Agent in each state.

Why do states require a Registered Agent?

Your Registered Agent is your official contact with the state. The state requires a Registered Agent be designated so that it has an official contact on file for your business. The state will send your company important compliance information and official correspondence through your Registered Agent. For most businesses, this correspondence is comprised of annual report and tax filing correspondence.

Your Registered Agent is also responsible for receiving service of process for your company. Service of process is legal paperwork that gives your company official notice that a lawsuit has been filed against it. Your registered agent may also receive other court documents such as wage garnishment orders or subpoenas.

Having a Registered Agent is an ongoing requirement

You’re required to designate an in-state Registered Agent when you form your company and in each additional state in which you do business. It is an ongoing requirement to maintain a Registered Agent in the state in which you formed and in each state where your company is conducting business.

What happens if I don’t designate a Registered Agent?

Failing to have a Registered Agent contact in the state in which your business was formed and in states where your business has expanded may result in serious, adverse consequences. Your business can be administratively dissolved in the state of its formation and forfeit the authority to do business in other states.

Continuing to do business as usual under this status means your business is not only subject to fines but, if it fails to file its annual report it can lose its good standing status. Reinstatement of what is known as “good standing” for businesses varies state-by-state and can be a tedious—and expensive—process. Not having a registered agent can also mean that your company will be unable to defend itself in a lawsuit. This can happen if the person filing the lawsuit tries to serve process on your registered agent but is unable to do so. That person may then serve your company in another manner which is less likely to provide actual notice, which can result in a default judgment against your company.

Reasons for using a professional Registered Agent

If you have a physical address in the state in which you form your company, technically you could serve as your own Registered Agent. However, there are a couple of very good reasons why just because you can serve as your own Registered Agent doesn’t mean that you should.

  1. Time-sensitive materials require immediate attention. You’re busy running your business and in almost every case that means you’re not always available during regular business hours to receive important communications or documents that require a response by a certain deadline or due date. A professional Registered Agent is available for the receipt of official documents and will forward them to you in a timely fashion so you don’t miss important annual report, tax, and litigation filing deadlines. A reliable professional agent helps you avoid the consequences of improper handling of critical paperwork.
  2. Protecting your business image. Acting as your own Registered Agent means keeping your business address (which may also be your personal address) on file with the state. This is where they will send all correspondence routinely associated with the corporation or LLC and where the process server will go to serve you with court documents. This opens you up to interruptions to your busy day, and if clients or customers are present, it can jeopardize the professional image you’ve worked so hard to project. For example, if you are served with notice of litigation, you can understand that a client or customer’s reaction won’t be favorable.

Summary

The right Registered Agent is a partner in your success. A reliable professional Registered Agent such as CT gives you peace of mind that you won’t miss a critical filing and endanger your business’ good standing and its right to defend itself in court. Monitoring tools and services provide transparency as to exactly what’s going on with your business compliance so you’re always in control. With a professional Registered Agent, you can have the confidence of knowing that you’re aware of and on top of your compliance obligations.


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