What Is a Registered Agent?

 

When you’re starting a business and getting your ducks in a row with your state, you’ll likely be asked to appoint a registered agent.

But who is a registered agent? In today’s post, I’ll explain the duties of a registered agent and help you decide who to choose for this role.

What is a registered agent?

A registered agent, also known in some states as a resident agent, agent of process, or statutory agent, is an individual or business appointed to receive important legal documents, tax documents, and other official government communications on behalf of a registered business entity.

States require that certain business entity types assign a registered agent so that due process can be followed and a company can be reliably contacted for legal matters. This is important in several situations, such as if a business is sued and needs to receive notices related to service of process, notice, or demand.

Does my business need a registered agent?

Whether or not your business is required to designate a registered agent depends on the state where your business is registered and the type of business you have. States mandate that businesses that register as legal entities, including limited liability companies (LLCs), corporations, and certain types of partnerships appoint a registered agent.

Sole proprietorships and general partnerships don’t need to assign a registered agent since those business types are considered “common law” entities.

If your business is required to have a registered agent but doesn’t, then your business may fall out of good standing with the state, which could lead to penalties or dissolution.

What does a registered agent do?

Simply put, a registered agent must be available during normal business hours to receive official legal documents for your business.

What are the requirements for a registered agent?

A registered agent must:

  • Be present to receive legal mail during normal business hours, which typically means every Monday through Friday from 9am to 5pm.
  • Be at least 18 years of age.
  • Have a physical address within the state where your business is registered (not a P.O. box).
  • Be responsible for notifying you immediately of any legal documents received.

Some states have more requirements for registered agents such as additional paperwork and consent forms, so be sure to check with the state agency in charge of business entity filings in your state. This is typically the Secretary of State’s office.

Another important note is that if your business is registered in more than one state, you’ll need a registered agent in each of those states.

Can I be my own registered agent?

Your business can’t be its own registered agent, but yes, you–as an individual–can be. However, remember that a registered agent must be available to receive paperwork during all normal business hours. If you are often out of the office because you’re, y’know, running a business, it may not be a good idea to appoint yourself as a registered agent.

Another thing to consider is that the registered agent must supply their address on official business documents that become public record. If you run your business out of your home, you may not want your home address out there for anyone to find.

How do I find a registered agent?

First, let me say that many small business owners choose to appoint someone they know and trust as their registered agent. This could be a spouse, friend, attorney, or anyone else who is typically available to receive and sign for mail during regular business hours.

If, however, you don’t have someone who can meet the requirements of a registered agent for your business or if you want to outsource this task, then there are companies you can hire to be your business’ registered agent. These services typically cost between $100 to $500 for the year and can be an easy way for you to ensure you’re in compliance and not missing important legal notices.

When searching for a registered agent service, you’ll want to do your due diligence just like you would when hiring out for any other service. Ask around and check reviews to make sure the company is reliable.

Also, make sure you understand exactly what services they’ll be providing. Many of these companies specialize in handling legal documents and can also provide additional services like compliance tracking and secure document storage, so be sure to ask about all of their services if that’s something your company would benefit from having.

What does a registered agent have to do with my taxes?

The IRS and state tax authorities will often send important notices and communications to your registered agent. This includes everything from tax filing reminders to notices of delinquency.

Additionally, many states will require businesses to file annual reports such as financial statements. Your registered agent will receive those reminders for those filings as well.

If you hire a registered agent, some companies will even help you stay on track by not only receiving but also organizing and alerting you to tax documents that may require your immediate attention.

Abridged by Amy

Assigning a registered agent is a legal requirement for many businesses. You or someone you know can certainly serve as your business’ registered agent if you meet your state’s requirements, but hiring a company to be your registered agent can help keep your personal information off of public records and can ensure you never miss an important tax deadline or court summons. Of course, hiring a certified public accountant will ensure your tax deadlines are always met, too!

If you have a new business, take a moment to look through some of my other free blog posts and videos I made for entrepreneurs like you. A few I recommend starting with are:

Should My Business Be an LLC or an S-Corporation?

How Restricted Stock Units Affect Your Taxes

 
Amy Northard, CPA

Amy Northard, CPA

Founder of The Accountant for Creatives®
+ taxes + bookkeeping + consulting
+ Hang out with me over on Instagram!

Are things like taxes & bookkeeping getting in the way of your creative time? Let's Chat!
Bookkeeping & Tax Tips
Sign up for free tax tips and advice sent straight to your inbox!
By clicking on the submit button, you agree with our Privacy and Terms Policy.