How to choose a registered agent for your LLC or corporation

Selecting your company’s registered agent is a vitally important step in the formation process. Just like with other important decisions — such as choosing an entity type, or the company’s name, or whether the company will be taxed as a pass-through or separate entity - making the wrong choice can severely damage the business.

Registered agent requirements for corporations and LLCs

Every state requires domestic and qualified foreign corporations and LLCs (and most other kinds of statutory business entities, too) to appoint and continually maintain an in-state registered agent (also known as an agent for service of process, statutory agent, or resident agent). The registered agent’s role is to receive, on the corporation or LLC’s behalf, certain court documents, compliance information, and official correspondence.

Although states vary in their precise requirements, most require that a registered agent be either a resident individual or a domestic or qualified foreign corporation or LLC.

The registered agent’s office address has to be a physical address in the state - it can’t be a P.O. Box or a virtual office. One of the main ways summons and complaints are served on a registered agent is by personal (as in hand) delivery. Therefore, a physical address is required, at which the registered agent is available during business hours.

Essentially, the state wants your company to have a physical location, and a person at that location, who is reliable and available in order to receive these important documents on your company’s behalf. The registered agent’s name and address are kept on file by the Secretary of State (or other state agency in charge of business entity filings) and are available to the public. This protects both the public (by allowing people who need to serve documents on a company to find someone authorized by the company to receive the documents), and the company (by ensuring it receives critical documents on a timely basis). Often the court or government official documents include deadlines or timelines for responding.

Can you be a registered agent for your business?

Some business owners, particularly small business owners, may want to act as their corporation’s or LLC’s registered agent.

If your business requires you to move around or you have a mobile office, a professional service company as your registered agent helps you receive critical documents and information — and have the time to respond to them. Also, a growing number of companies have no physical office location in either their state of formation or states of foreign qualification. Using a professional service company solves the problem of who can be the company’s registered agent in those states. But it is important to remember that the professional registered agent’s address is not your company’s business address. If you are asked to list your company’s principal place of business, principal office, or other location where your corporation or LLC conducts its business you should not list the address of your registered agent because your corporation or LLC does not conduct business at your registered agent’s address.

What to look for when choosing a registered agent

Among other things, your registered agent should be reliable, accurate, and consistent. When choosing a registered agent, look for the following:

1. Availability. Your registered agent should always be available and physically present at the registered office during normal business hours. This ensures any hand-delivered legal documents or mailed documents that require the addressee’s signature, get proper attention.
2. Expertise. Knows your state’s business entity and compliance rules. Each state’s rules differ. The best providers have legal professionals tracking changes in legislation.
3. Professionally trained staff. Has professionally trained staff with expert knowledge on how to properly handle and forward SOP papers, which prevents costly delays due to incorrect, misrouted, or incomplete documents.
4. State-of-the-art service. Has state-of-the-art processes in place to deliver crucial, sensitive documents to the right person on your team, and to follow-up regarding delivery.
5. Responsiveness. You may not contact customer service often, but when you do, you need a compliance expert to answer your questions then and there.
6. National reach. Can provide your company with a registered agent and office in any state where the business may expand into as you will be required to have a registered agent in order to register to do business in those states.

Your company’s registered agent should be someone who will always be physically present at the registered office during normal business hours. Having a professional registered agent ensures that things such as personal emergencies, vacations, business trips, and meetings never leave your company without this physical presence. Keep in mind, a lawsuit can proceed against your company, even if your registered agent is not available to receive service. If the person suing your company can’t serve the registered agent, that person may be able to serve your company by a means that may not result in you actually receiving notice of the lawsuit. If that happens, you may lose the opportunity to defend yourself in court or incur extra legal fees.