As a startup entrepreneur looking to start a business, there are federal and state requirements you should observe to be registered legally.
Since there are also different business structures, these requirements depend on the structure that your business will be formed under. For Corporations and Limited Liability Companies, one vital obligation to be duly registered with the state you are to operate your business in is to hire a Registered Agent.
This guide will give you a clear perspective of what a Registered Agent is, their role and responsibilities in your business, the requirements for choosing one, how to find a dependable Registered Agent, and what happens if you opt to not hire for one.
An Agent for Service of Process or simply a Registered Agent is a person or a service you delegate to accept legal documents on behalf of your business. The legal documents referred to here include lawsuits, business registration, renewal notifications, tax reports, subpoenas, and other official correspondence. This Registered Agent then forwards the legal documents to the appropriate person-in-charge in your business.
The specific requirements of a Registered Agent depend on the state where you register your business, so there are details to hiring an agent that should comply with the state’s stature to ensure that the business can be legally recognized.
Each requirement for hiring a Registered Agent varies from one state to another. However, there are conventional rules that apply to almost all states. These include the following:
While there are a handful of states that allow the Corporation or LLC to be their own Registered Agent, business counsellors often highly advised against this as there are several downsides to this arrangement. Remember that a Registered Agent should be present at all times during office hours. If you travel a lot in your business, this could be a disadvantage on your end. For example, a missed lawsuit notice that goes un-responded could lose you the case through by technicality.
As a Registered Agent’s responsibility is quite sensitive, there are a specific set of requirements you need to look for that make a good Registered Agent for your business.
Aside from the state-mandated ones, it’s important to look beyond those requirements as well. The true mark of a good Registered Agent is dependability and reliability.
When looking for a Registered Agent, take time to know your options and do a thorough study of each Registered Agent service provider. Consider the reputation of the individual/service and check its reputation. Remember, a Registered Agent’s position in your company is vital, so make sure to hire a Registered Agent service that has your best interest at heart.