Registered Agent: What You Need to Know
As you prepare to form your business, you need to select a registered agent. All states require LLCs that are formed or foreign qualified (registered to transact business) to have a registered agent in that state; however, many business owners have no idea what a registered agent is or does.
The registered agent is responsible for receiving official legal and tax documents on behalf of the business. Types of documents sent to the registered agent include Service of Process (sometimes called notice of litigation), which is the document that initiates a lawsuit; important mail sent by the state, such as annual reports or statements; and tax documents sent by the state’s department of taxation.
One strict requirement for a registered agent is that they must have a physical address in the state of formation or qualification. Post Office boxes or a private mailbox rented from a company, such as The UPS Store, are not allowed. The registered agent must also be available during normal business hours.
Individuals, including owners, LLC Members, or employers, are allowed to act as registered agents. For example, if you have a physical address in the state where you form your corporation or LLC, you could name yourself as the agent. You could not, however, name your new company as its own registered agent.
Service of Process has been mentioned frequently in this article and for good reason. It is very important that this document be handled properly and promptly. As previously mentioned, a Service of Process initiates a lawsuit against your company. The Service of Process also typically outlines the time frame in which a response from your company must be received. If a response is not received in time, a default judgment may be issued. When a default judgment is issued, the other party wins, and your company may need to pay the damages outlined.
As you form or foreign qualify your corporation or LLC, give some additional thought to who will be the registered agent for your company. While the registered agent is a legal requirement, the right registered agent can also be an asset to your business.
The registered agent is responsible for receiving official legal and tax documents on behalf of the business. Types of documents sent to the registered agent include Service of Process (sometimes called notice of litigation), which is the document that initiates a lawsuit; important mail sent by the state, such as annual reports or statements; and tax documents sent by the state’s department of taxation.
One strict requirement for a registered agent is that they must have a physical address in the state of formation or qualification. Post Office boxes or a private mailbox rented from a company, such as The UPS Store, are not allowed. The registered agent must also be available during normal business hours.
Individuals, including owners, LLC Members, or employers, are allowed to act as registered agents. For example, if you have a physical address in the state where you form your corporation or LLC, you could name yourself as the agent. You could not, however, name your new company as its own registered agent.
Service of Process has been mentioned frequently in this article and for good reason. It is very important that this document be handled properly and promptly. As previously mentioned, a Service of Process initiates a lawsuit against your company. The Service of Process also typically outlines the time frame in which a response from your company must be received. If a response is not received in time, a default judgment may be issued. When a default judgment is issued, the other party wins, and your company may need to pay the damages outlined.
As you form or foreign qualify your corporation or LLC, give some additional thought to who will be the registered agent for your company. While the registered agent is a legal requirement, the right registered agent can also be an asset to your business.