If you own a business, you need a registered agent in almost every state in the US.
Registered agents aren’t just a requirement, they’re actually really handy to have around.
Keep reading to learn what a registered agent is, its purpose and duties, and whether you need a registered agent in every state.
Does Any State NOT Require a Registered Agent?
Many registered agent providers and LLC formation services won’t tell you this because it loses them money, but your business isn’t required to have a registered agent in West Virginia. It’s the only state that doesn’t require businesses to maintain a registered agent. That means that the choice to appoint a registered agent or not is completely up to you.
But even though you’re not required to have a registered agent in the state, you could still miss a service of process and find yourself in a world of trouble with the Secretary of State, and your personal information will be listed on the public record if you don’t have a registered agent.
What Is a Registered Agent?
A registered agent is an individual or business entity whose job is to accept service of process, legal notices, tax documents, and mail on behalf of your business at the address listed on your formation documents during regular business hours. Nearly all business entities must maintain a registered agent.
It may seem confusing to send your company’s legal documents, service of process, and mail to a different address, but that’s where the second half of registered agent services come in: document delivery. Your registered agent will use mail forwarding or an online document-management system to deliver your mail and documents to you.
If you have a foreign corporation, or a business that otherwise operates in multiple states, then you’ll need a registered agent in each state it conducts business. You can accomplish this either by designating multiple registered agents or by hiring a national registered agent service.
A registered agent is also referred to as a statutory agent or resident agent in some places. If you see these terms, just remember that they’re all the same business service.
What Is the Purpose of a Registered Agent?
Your registered agent must be physically present and available at the business address listed on your formation documents during normal business hours to accept service of process. Furthermore, your registered agent’s address is required to be a physical street address in the state. That unfortunately disqualifies the use of PO boxes.
Besides, there are lots of other things your registered agent can do beyond just supplying a physical address and receiving your business’s mail!
Compliance
As time goes by, it becomes harder and harder to remember your important compliance filing dates. Luckily, as the go-between for your company and the government, your registered agent is tasked with reminding you about compliance filing deadlines. This way, you won’t forget to file annual reports with the Secretary of State.
Management of Important Documents
Many registered agent services now offer online document-management systems, which are convenient for a couple of reasons. First, it’s a lot faster than basic mail forwarding. They scan and upload your mail and documents the day they receive them.
But with mail forwarding, you’re at the mercy of the postal system, which is so notoriously slow that it’s earned the nickname “snail mail.”
Second, as the name suggests, they provide you with an electronic storage system for your documents, mail, and service of process. This means you can view, store, or delete mail (even junk mail) all from the same system, which prevents the need for storage rooms and filing cabinets.
Service of Process
The problem is that many articles on registered agents mention service of process as if it’s something that will happen on a daily basis for your business. But a service of process is a formal legal notice that your business is being sued.
This is definitely something that should be a rare occurrence for your business! But if you do get sued, it’s your registered agent’s job to accept service of process on behalf of your business.
Registered Agent Requirements
Due to the Model Registered Agents Act, registered agent requirements are pretty much standardized in all 50 states. Here are some that your registered agent is expected to fulfill:
- State laws. On top of the federal laws, some states also have special requirements for registered agents, so you’ll have to read up on state laws to make sure your registered agent meets all of the legal requirements.
- 18+. All registered agents are required to be at least 18 years of age.
- Physical address. Your registered agent must have a physical street address, not a PO box.
- Who you can designate. As long as they meet the state requirements, you’re free to appoint a registered agent of your choosing. You’re allowed to choose a family member, friend, employee, or professional (like a lawyer) as your registered agent. But make sure you choose someone reliable.
What Happens If My Business Operates Without a Registered Agent?
In a hypothetical scenario where a process server attempts to deliver service of process to your business at one of the addresses listed on your formation documents, and your registered agent isn’t available to accept it, the server will deliver the service of process to the Secretary of State next.
It may not seem like it, but this is bad news for your business. Now a government entity has notice of legal action being taken against your company, and you’re oblivious. Since you won’t be there to defend your business against the litigation, this may result in a default judgment against you.
It’s also illegal in most places for business entities to operate without registered agents, so the Secretary of State can remove your company’s good standing. This has some serious consequences for your business. It can affect your business loans, expansion, permission to conduct business, and even your business name.
If you own a limited liability company, losing your company’s good-standing status could end in “administrative dissolution,” which means the Secretary of State can automatically dissolve your company.
Can I Be My Own Registered Agent?
You’re legally allowed to be your own registered agent in all 50 states. But just because you can do it doesn’t necessarily mean it’s a good idea. Here are the pros and cons of being your own registered agent so that you can compare them to hiring a professional registered agent service and make an informed decision.
Cons of being your own registered agent:
- Liability: If you miss important notices, you’ll lose your liability protections
- Lack of privacy: You might have to list your private details on the public record
- Time: As a business owner, you may not have time to be also be a registered agent
Pros of being your own registered agent:
The only advantage of being your own registered agent is that you won’t have to pay fees for registered agent services. But now that you know the downsides of being your own agent, maybe you’ll agree it’s worth it to pay for registered agent services. The peace of mind and lightened workload are worth the reasonable prices most registered agents charge.
Differences in Registered Agents by State
Registered agents aren’t called the same thing in every state, and they don’t answer to the same governing authorities. Here are some of the differences in registered agents from state to state.
Florida
In Florida, a registered agent functions much as registered agents in other states. You’re required to appoint a registered agent when you establish your business. The difference is that registered agents outside the state aren’t required to keep copies of the documents they receive on your behalf. They act as a true intermediary and just pass them along to you.
Pennsylvania
In Pennsylvania, a registered agent is called a Commercial Registered Office Provider, or CROP, and they receive official correspondence from the Pennsylvania Department of State.
New York
Registered agents in New York are called Agents for Service of Process, and they answer to the NYS Department of State Division of Corporations. The name for this government agency may be long, but it functions much like the Secretary of State’s office in other states.
Conclusion
Starting a business is always hard work for business owners. It’s easy to get overwhelmed with the amount of work you have to accomplish to get things up and running. But registered agents can make your job far easier.
If you’ve yet to legally establish your business and would like more information on the formation process, read my guide on How to Start an LLC.
If you want some guidance through the red tape and hoops involved with the formation process, check out my guide to the Best LLC Formation Services.
Registered Agent Service FAQs
What’s the difference between a commercial and a noncommercial registered agent?
A commercial registered agent is one that has registered as such with the Secretary of State. In some states, professional registered agent services are required to register as commercial registered agents.
Noncommercial registered agents are individuals or business entities that aren’t registered with the Secretary of State as commercial registered agents. So, if you’ve appointed a family member or friend as your registered agent, then they’re officially a non commercial registered agent.
For more info about commercial and noncommercial registered agents, read my article on the topic.
How do I change the registered agent for my LLC?
Usually, you change your registered agent by filing a Statement of Change of Registered Agent form with the Secretary of State. Some states require you to make the change on your annual report, while others allow you to change it at any time.
There’s typically a filing fee associated with submitting the form. And you’ve usually got a few options when it comes to filing: online, mail, or fax.
How much does a registered agent cost?
The cost of your registered agent depends on which registered agent provider you choose and the services your business requires. Some options are free, such as being your own agent, or appointing a friend or family member as your registered agent.
Professional registered agent services can cost $39–$299 per state, per year (plus state fees). If you want to learn more about registered agent pricing, read my guide on the Best Registered Agent Services.
