When establishing a corporation, there are a lot of new words to learn, and it’s easy to mix them up. This is especially true of the words registered agent and incorporator. They’re two very different jobs, but they’re so alike that the same person is able to perform both of them.
In this article, we’ll go over the differences between a registered agent and an incorporator, as well as whether you need one or both of these services for your business.
Incorporator vs Registered Agent
So if an incorporator is like a registered agent, what sets them apart?
An incorporator is a person or business that is responsible for formally establishing a corporation with the state government. Your business’s incorporator will file forms to establish your corporation, such as your articles of incorporation, and they’ll stick around until your company’s board of directors takes over. It’s a huge responsibility!
A registered agent, on the other hand, is responsible for continual duties. In the vast majority of states, having a registered agent is a legal requirement for corporations. Your registered agent will receive legal correspondence, including legal documents, mail, and service of process at your listed business address during normal business hours.
To explain further, I’ll provide an in-depth explanation of both registered agents and incorporators. Let’s start with registered agents.
What Is a Registered Agent?
A registered agent is an individual or business entity that receives legal correspondence on behalf of your corporation at your company’s address during standard business hours. A registered agent also provides a physical address for your corporation to keep your information off the public record.
Maintaining a registered agent is a legal requirement for almost all businesses in most states.
Your company’s registered agent will either forward your mail or set up an online document-management system to make sure you always have access to important paperwork. If you choose one of the best registered agent service providers, they will remind you to submit your annual report each year by sending out a compliance alert so you don’t miss the due date.
If you run a corporation that does business in more than one state, you’re legally required to have a registered agent in each state in which your corporation does business. You could use a number of different registered agents or you could hire one national registered agent service capable of fulfilling all your legal responsibilities in a unified fashion.
There are a few other terms that refer to registered agents, including statutory agent and resident agent. Although the latter two are older terms, all these words refer to the same business service.
Registered Agent Requirements
The Model Registered Agents Act created a list of universal requirements for registered agents in all 50 states. These rules have been in place since the act was established in 2006.
The following is a list of the requirements that need to be met by your registered agent:
- State laws. Some states have their own laws for registered agents. You’ll need to familiarize yourself with your state’s legislation to make sure your registered agent meets all the legal requirements.
- 18+. Every registered agent must be at least 18 years old.
- Physical address. A registered agent must list a physical street address in the state. Virtual addresses and PO boxes aren’t suitable alternatives.
- Who you can designate. You’re free to designate anyone you choose as your registered agent, whether they’re a family member, an employee, a friend, or a professional (such as your lawyer or accountant), as long as they satisfy the legal requirements stipulated by state law.
What Is the Purpose of a Registered Agent?
To comply with state regulations, a registered agent must be physically present at your business address and be available during business hours. In addition, since registered agents are required to have a physical address, the use of PO boxes are prohibited for this purpose.
Fortunately, registered agents’ responsibilities extend far beyond the simple act of receiving mail.
Compliance
The deadline for your annual report only comes around once a year, and it’s often due on the day your corporation was formally established, which becomes progressively more difficult to remember each year. Luckily, these deadlines are monitored by registered agents.
According to state law, a registered agent serves as a liaison between a corporation and government agencies. Because of this, your registered agent will notify you of upcoming compliance filing deadlines. The best registered agent services will even send you compliance alerts so you can check that box without thinking about it.
Management of Important Documents
All legal notices and correspondence, as well as your corporation’s organizational documents will be delivered to your registered agent’s address.
Some of the best registered agent services use online document-management systems, which are convenient tools for business owners. In addition to allowing you to receive legal documents faster than standard mail forwarding, these services provide an electronic storage space for your mail and documents.
Service of Process
Some articles about registered agents imply that your corporation will receive a service of process every day. However, this is extremely doubtful. A service of process is a legal notification that your business is being sued, so you do not want it to happen frequently.
But if your corporation is involved in litigation, your registered agent will fulfill his or her role by being available to receive service of process on your behalf.
What Is an Incorporator?
Your business isn’t legally incorporated and established without one or more incorporators. Some states require corporations to have at least three incorporators. Your incorporator signs the articles of incorporation for your corporation, files the paperwork necessary to set up your business, and helps create your operating agreement.
An operating agreement is an internal document that describes how your business operates, who has authority, who owns the business, how board members convene and vote, and how profits are distributed, as well as listing employees and shareholders. Even though operating agreements aren’t mandated in all 50 states, you should have one for your business.
Every corporation formed in the United States must file articles of incorporation, a certificate of organization, or a company charter to be formally registered and recognized by the state government.
A company’s articles of incorporation include the corporation’s name, the registered agent’s name and address, the corporate structure of the company, information about board members (like their names and addresses), company shares and their availability, the corporation’s end date if it isn’t a permanent business, and your incorporator’s signature.
While an incorporator’s signature appears on your articles of incorporation, the incorporator doesn’t actually take ownership of your business. Although the incorporator signs and files the relevant paperwork, they don’t take control of your company in the same way that an accountant doesn’t get your tax refund just because they filed your return.
Before filing the articles of incorporation for your company, according to the Model Business Corporation Act, your incorporator has to double-check the statute’s provisions. In most states, incorporators sign incorporation documents only after verifying compliance with state laws.
According to the Model Business Corporation Act, after filing your incorporation documents, your incorporator can hold an organizational meeting to discuss amendments to the articles of incorporation, the drafting and adoption of new bylaws, and electing members for your board of directors. They’re required to give three days’ notice before this meeting.
Incorporators sign the company’s articles of incorporation and complete the incorporation process, but they don’t have duties beyond that. In fact, once the first meeting of the board of directors takes place and the corporation is off the ground running, the incorporator resigns as their last act of duty.
Who Can Be an Incorporator?
You can select nearly anyone to be the incorporator of your corporation. The main stipulation is that you have to grant the person legal authority to sign documents on your company’s behalf.
An incorporator can be any of the following:
- A board member
- Shareholders
- Officers (president, secretary, or treasurer)
- A professional (such as your lawyer or accountant)
- A family member or friend
Hiring a person solely to complete the incorporation process is commonplace in the corporate world. These people are known as “dummy incorporators,” and they don’t retain ownership of the corporation unless you give them an ownership role in the company after their incorporation duties are fulfilled.
Can I Be My Own Incorporator?
Yes, you can be your own incorporator. In fact, many corporation owners choose to be their own incorporators and sign their articles of incorporation themselves. To be an incorporator and facilitate your company’s incorporation you must be 18 years old and agree to be the company incorporator. That’s it.
Is the Incorporator the Business Owner?
The incorporator can be the corporation owner, but it doesn’t have to be. In fact, many corporation owners decide to also take on the role of incorporator to easily get through the incorporation process without hiring someone else to do it.
But you can choose a business formation service, a lawyer or accountant, a family member, or a friend to be your incorporator and help with your corporation’s formation. So long as they didn’t already have any ownership of your business, they won’t gain ownership once the articles of incorporation are filed.
However, in many cases the incorporator is also the business owner. The actual owners are usually the one that starts the incorporation process to begin with, so many business owners find it more convenient to file the articles of incorporation themselves. In that scenario, the incorporator is both the person forming the corporation and the business owner..
Can a Registered Agent and an Incorporator Be the Same Person?
Your incorporator and registered agent can absolutely be the same person. Here are some instances where incorporators and registered agents are the same person:
- You’re the incorporator and the registered agent. As the business owner, you can complete the business formation process yourself. If you do, you’ll list yourself as both the incorporator and the registered agent on your company’s articles of incorporation. This also makes you a shareholder in the corporation.
- A family member or friend is both registered agent and incorporator. As long as they’re 18 years old and meet the requirements, a friend or family member can fulfill both duties. Choosing a friend or family member doesn’t automatically make them a shareholder or earn them a position on your board of directors. Choose someone trustworthy — not just your favorite family member or friend.
- You use a formation service that also provides registered agent services. If you choose a business formation service that also supplies registered agent services, then they’ll serve as both your incorporator to sign documents on your company’s behalf and your registered agent.
Do I Need Both an Incorporator and a Registered Agent?
Yes, in most states you definitely need both an incorporator and a registered agent. These are two very different jobs with different duties, even though they may be performed by the same person. Your corporation is required to have at least one incorporator. And almost every state requires you to name a registered agent, even if it’s yourself or your grandma.
What’s the Difference Between an Organizer and an Incorporator?
An organizer’s job is to file articles of organization to establish a limited liability company. An incorporator’s job is to file articles of incorporation for a corporation. The two jobs are quite similar, but the different designations are for different business structures.
Conclusion
There are major differences between a registered agent and an incorporator, such as a registered agent taking on a semi-permanent role with the company, and the incorporator being a temporary position. A registered agent serves to receive mail and service of process on the company’s behalf during regular business hours. An incorporator serves to fill out the necessary documentation and perform all of the tasks necessary to form the corporation.
If you’d like more information about how to start a business, read my guide on How to Start an LLC. And for more information about registered agents and registered agent services, check out the Best Registered Agent Services.
