Every Illinois corporation or limited liability company must have an Illinois registered agent, and there’s no shortage of reasons that maintaining a registered agent is a good idea.
It’s difficult to complete the formation process without a registered agent. An agent will also help with compliance to make sure that you won’t forget about your annual report or other important filing deadline with the Illinois Secretary of State Department of Business Services.
So you’re probably wondering what a registered agent is, how you can choose the best one for your company, and whether your Illinois business really needs one.
What Is a Registered Agent in Illinois?
The term registered agent refers to an individual or business entity that is present at your company’s registered office address during regular business hours to accept legal documents, service of process, tax notices, and official mail from government agencies (like the IRS and the Illinois Secretary of State) on behalf of your Illinois LLC or corporation.
But wait, why would you want to have your mail, documents, and important notices (like service of process) sent to a registered agent’s address rather than your own? It doesn’t seem like it would do much good for someone else to receive your mail and legal documents, does it? That’s where the second half of registered agent services comes in: mail forwarding and online document management systems, both of which ensure that you’ll receive your mail and notices in an organized and timely manner. Many of the best registered agent services also provide compliance alerts for things like your annual reports so that you never miss an important filing deadline with the Secretary of State.
If you’re officially registered as a business entity in Illinois (and all 50 states), your business is required by law to continuously maintain a registered agent. Additionally, if your company does business in other states, it’s required to maintain a registered agent in those states too. To meet that legal requirement, you’ll have to either hire a national registered agent service or designate someone who’s already there and available during business hours to be your registered agent.
Sometimes an Illinois registered agent is referred to as a resident agent or statutory agent. All three terms refer to the same business services.
What Is the Purpose of a Registered Agent in Illinois?
Now that you know the definition of a registered agent in Illinois, you’re likely plotting to set up a PO box and check it regularly for important notices and mail to meet your company’s legal obligations. Before you scurry off to do so, you should know that it won’t work.
The Illinois Secretary of State Department of Business Services stipulates that your registered agent’s address must be a physical address in the state, so your business address can’t be a PO box. Furthermore, the address you put on your formation documents must be a physical address, so if you have a PO box for your business, you’ll have to put your home address on public record. A registered agent service eliminates this problem. But an Illinois registered agent service does much more than simply provide your business with a registered office address and accept legal documents for it during normal business hours.
Compliance
There are several compliance filing deadlines that you’re expected to meet, and it can be a nightmare to attempt to remember them all on your own. Luckily, it’s your registered agent’s job to ensure that you’re kept informed about deadlines. It does this by issuing compliance notifications or annual report reminders.
Your registered agent in Illinois functions as a sort of middleman between your business and government agencies, like the Illinois Secretary of State. As such, its responsibility is to inform you when the Secretary of State sends you reminders for filing deadlines. Because of this, designating an Illinois registered agent should guarantee that you won’t miss important correspondence or a service of process.
Management of Important Documents
Your business’s address is important for more than just privacy concerns—it’s where your business’s documents and notices will be sent. Those are understandably important and you need to keep track of them and keep them organized. Some of the best registered agent services provide online document management systems that allow you to view your mail and manage it with an online account. It also provides you with a convenient place to store your business documents, which is an extremely helpful feature that shouldn’t be underappreciated.
Who Can Be a Registered Agent in Illinois?
Here’s a list of requirements that your Illinois registered agent or registered agent service must meet:
- State laws. Some states have laws exclusively for registered agents, so you should check up on the laws in Illinois to make sure that your registered agent meets the legal requirements of the state.
- 18+ years old. All Illinois registered agents must be at least 18 years of age.
- Physical address. Every registered agent in Illinois must have a physical street address in the state. A PO box will not suffice.
- Who you can designate. As long as the person meets the other requirements, you’re allowed to designate whomever you want as your Illinois registered agent—a family member, employee, friend, lawyer, etc. Just make sure that whomever you designate is trustworthy and available to take on the job.
What Happens If My Business Operates Without a Registered Agent?
If there’s no one around at your business address during regular business hours to receive service of process from a process server or process agent, they will deliver the service of process to the Secretary of State Department of Business Services.
In this event, the Secretary of State has your legal notice, rather than you. And because of that a court can proceed with legal actions against your business—without you knowing anything about it.
That’s not the only consequence of not maintaining a registered agent in Illinois. The Secretary of State could rescind your company’s good-standing status if you don’t maintain a registered agent or if you don’t meet compliance filing deadlines. This could be a legal disaster for your business. Not only would your business no longer qualify for loans, it wouldn’t be allowed to expand to other states, and it may be prohibited from conducting business in Illinois altogether.
It can be especially detrimental to LLCs to lose their good-standing status. If you fail to maintain a registered agent in Illinois, it could result in what’s known as administrative dissolution, which is the nullification of an LLC due to its failure to comply with filing or other legal obligations in the state.
If your Illinois LLC is dissolved, it won’t have the legal right to use its business name in the state anymore. Other companies can then take advantage of your misfortune and take your business name to use for themselves. The worst part is that no matter how quickly you resolve this issue, you may never regain legal rights to your company’s name.
There are loads of perils associated with continuing to do business without the protection of the LLC, as well. The owners of a limited liability company are both personally and financially responsible for the company, and without liability protection their personal assets are fair game in the event of litigation against the business.
These legal and financial results aren’t exclusive to LLCs, either. If you own a corporation, sole proprietorship, or other business entity, then many of these consequences apply to you, too.
Can I Be My Own Registered Agent in Illinois?
There’s no law anywhere in the United States that explicitly says that you can’t be your own registered agent. But before you take on this role, you should be more informed about what it entails so that you can weigh it against hiring an Illinois registered agent service.
Cons of Being Your Own Registered Agent
Liability
The biggest downfall of being your own registered agent is the drastic consequences that come from missing a service of process from a process server or process agent. A court could issue a default judgment against your company, and with no knowledge of the legal actions you’ll have no way to defend your business in court. Obviously, that could end quite badly for your company.
Lack of Privacy
Being your own registered agent in Illinois means that you’ll be required to list your personal information on the public record, rather than information from your Illinois registered agent service. By listing your information publicly, hackers and cybercriminals can access it, which could lead to identity theft and other crimes. And that’s besides the fact that it’s a major invasion of privacy for everyone to know your name, address, phone number, etc.
Time
One big nuisance of being your own registered agent in Illinois is that it’s a rather time-consuming task. One of the less favorable aspects of business ownership is that it eats up a lot of your time, and so does being an Illinois registered agent.
But what many business owners don’t realize until after the fact is that acting as your own agent means you’re required to be present and available at your Illinois office address during normal business hours to receive mail and service of process for your business. It’s a good bet that your Illinois business also operates during regular business hours. Unless you find a way to be in two places at once, it will be all but impossible to simultaneously act as a registered agent in Illinois and effectively manage your business.
Pros of Being Your Own Registered Agent
The one silver lining of being your own registered agent is that you won’t have to pay fees to a registered agent service in Illinois. But when most business owners learn about the perils of missing a service of process, as well as the amount of time that registered agent duties take up, they typically choose to hire registered agent services.
And that makes sense given that registered agent services typically don’t cost that much.
Should I Use a Registered Agent Service?
There are lots of reasons that people choose to use Illinois registered agent services:
- You’re guaranteed to be informed by your Illinois registered agent service about upcoming compliance filing deadlines.
- The probability of missing a service of process, losing good-standing status with the Secretary of State, or a court issuing a default judgment against your company is far less likely because your Illinois registered agent service is present at your registered office to accept notices on your behalf.
- Because you aren’t pulling double duty performing both your Illinois registered agent duties and managing your business, you’re free to run your business without the added workload and stress.
- Companies that operate in multiple states can benefit from choosing a national registered agent service because it’s a simple way to meet their legal obligations with one provider.
- If your business happens to operate outside of normal business hours (such as restaurants, 24-hour fitness centers, or pubs), choosing a registered agent service in Illinois will prevent you from working day and night, and allow you to get some much needed sleep.
- If your business lacks a physical office address, using an Illinois registered agent service meets the stipulation of a street address in the state, and prevents your information from being listed on the public record.
- The amount of junk mail that businesses receive is obscene. If you choose to be your own agent, ridiculous amounts of junk mail will be delivered to your home address and you’ll have to dispatch it yourself. An Illinois registered agent service can handle this task for you.
- You can choose a premium registered agent service that offers extras, like identity theft insurance or offers to pay your state fees.
- Some registered agent services also supply business or LLC formation services. These providers typically offer bundles, like a free year of registered agent service when you use their formation service, which can be a nice perk.
At the end of the day, the only person that can say whether a professional registered agent service is right for your company is you, the business owner. But I recommend that every new business owner use a registered agent service.
What Is the Best Registered Agent Service?
Here are a few of the factors you should use to determine the best registered agent for your business:
Service Features
Simply put, don’t choose a registered agent that doesn’t offer the services your company needs. There are so many Illinois registered agents with comprehensive service catalogs and loads of attractive features that there’s no reason to even consider inferior agents.
Some providers supply you with compliance calendars that are filled in with filing deadlines, but don’t actually help you remember the deadlines, while others issue worry-free compliance alerts to keep you on track. Some companies only provide mail forwarding services, while others provide an online document management system that you can access with a secure account.
Value
A good way to determine whether a registered agent is up to snuff is to compare its service catalog to its price. If it offers a ton of services and has a low price tag, then it’s probably a good choice.
With that in mind, avoid “budget agents.” These sneaky providers use the allure of prices as low as $39–$59 to attract new customers and then charge additional fees for essential services, like online document management instead of mail forwarding. Stay far away from budget agents.
Easy Sign-Up
It’s never fun to feel like your time is being wasted, and this is especially true during the sign-up process, which is stressful enough for any business owner. Some Illinois registered agents not only require you to fill out heaps of paperwork, but their sign-up process can take weeks or months to complete. For this reason, you should choose a registered agent that has a quick and easy sign-up process.
User-Friendly Interface
You’ll use your registered agent’s system quite often, so it’s important that it be user-friendly. Some providers have antiquated servers with complicated navigation systems that are slow and full of technical problems. Instead, you should choose a registered agent with a simple user interface.
Customer Service
You could find a registered agent that has high ratings in all the other factors listed here, but you’ll still inevitably have a question about your service or encounter a technical issue. And because your registered agent is such an important professional service that it could make or break your business, great customer service is a must.
I used all five of these rating factors, as well as my four-stage investigative process, to determine that Northwest Registered Agent is the best registered agent service in Illinois. If you’d like to learn more about registered agent services, or how to choose the best registered agent service for your business, click here to read my guide to the best registered agent services.
Conclusion
The amount of information that new business owners have to learn is staggering—laws and regulations, new software and equipment upgrades, business and legal terminology, new management techniques, etc. Add to that the filing deadlines that they’re expected to keep track of and it’s a wonder that business owners don’t immediately crack under the pressure. But a registered agent, statutory agent or resident agent can lessen some of this workload and make life easier for business owners.
If you haven’t chosen a business structure and want to learn more about LLC formation, check out my article on how to start an LLC. If you’d like some extra support through the formation process, then read about the best LLC formation services here.
Illinois Registered Agent FAQs
What’s the Difference Between a Commercial and a Noncommercial Registered Agent?
The difference between a commercial registered agent and a noncommercial registered agent was detailed in the Model Registered Agents Act, the American Bar Association’s attempt at creating a set of standardized regulations for registered agents nationwide. A commercial registered agent service is one that has specifically registered as a commercial agent with the Secretary of State. Some states have laws dictating that all professional registered agents must register as commercial agents.
Noncommercial registered agents are any individuals or businesses that haven’t registered as commercial agents with the Secretary of State. This means that if you’ve designated a family member as your registered agent, then your Uncle Frank or Cousin Suzie is considered a noncommercial registered agent.
How Do I Change the Registered Agent for My LLC?
Good news for anyone disappointed with their current registered agent service: it’s relatively easy to change registered agents. All you have to do is fill out and submit a Change of Registered Agent form and/or Registered Office form. Make sure to include your new registered agent’s information when you submit the completed form. You’ll have to pay around $25 in state fees when you file online.
How Much Does a Registered Agent Cost?
The cost of your registered agent can vary depending on several factors, like the services you choose and the registered agent providing them. But in general, a registered agent can cost between $39–$299 per state, per year. If you’d like to know more about registered agent pricing, read my guide to the best registered agent services.
