Most businesses are required to have a registered agent, but it’s also prudent to have one.
Registered agents make up a big part of the formation process, and it’s nearly impossible to complete it without them. And they’re the true MVPs when it comes to compliance because they issue compliance alerts so that you don’t miss a filing deadline and lose your company’s good-standing status.
If you’ve never even heard of a registered agent, you’ve come to the right place. I’ll tell you what it is, what it does, and why you need one.
What Is a Registered Agent in Michigan?
A registered agent is an individual or business entity that receives service of process, mail, and legal documents on your behalf at your company’s registered business address during business hours.
It may seem counterintuitive to send your mail to someone at a different address, but that’s where document delivery services come in. Your registered agent will get your documents to you via either an online document management system or mail forwarding services.
If your company does business in multiple states then you have to maintain a registered agent in each of those states. You’ll either have to designate a different registered agent at each of those locations or hire a national registered agent to make sure your business’s legal obligations are met.
Some people call a registered agent a resident agent or a statutory agent, but all three terms refer to the same service.
What Is the Purpose of a Registered Agent in Michigan?
You may have wondered if you can simply establish a PO box for your company and check it at your leisure to satisfy your business’s registered agent obligation. The short answer is no, and there are two reasons why.
Your registered agent is required to be present at your business address during business hours to receive mail and service of process on your behalf. Your business address is required to be a physical street address. Translation: your registered agent has to actually show up to your registered office address on weekdays during normal business hours, and a PO box won’t do because it has to be a physical address.
But beyond that, there are several other things your registered agent is good for besides just providing you with an address to use on your formation documents and accepting mail on your behalf.
Compliance
Business owners are legally required to meet compliance filing deadlines for things like annual reports. The good news is that your Michigan registered agent will keep track of such things for you and then send you compliance notifications to remind you about important filing deadlines.
Your Michigan registered agent functions as an intermediary between your business and government agencies (like the IRS or the Michigan Department of Licensing and Regulatory Affairs–Corporations Division). When a filing deadline approaches, your registered agent in Michigan will inform you about it so you don’t miss it—if you pick a good one, that is.
Management of Important Documents
The address you list on your LLC formation paperwork is important and not just because of the physical street address stipulation.
It’s also the physical address where your business correspondence and legal documents will be sent. And because you likely need to keep these official documents for your records, document delivery services from your registered agent in Michigan are important. Many registered agent services provide online document management portals.
The best registered agents in Michigan will scan and upload your legal documents the day they’re received, and you can view them with an online account. It’s a lot faster than mail forwarding.
You can also store your documents on the system, which is convenient. That means you don’t have to keep a storage room full of filing cabinets and folders!
Who Can Be a Registered Agent in Michigan?
There are several blanket requirements for registered agents nationwide. Here are some of the requirements your registered agent in Michigan will be obligated to satisfy:
- State requirements. Several states have written laws pertaining specifically to registered agents. You should brush up on the laws in Michigan to make sure that your registered agent meets all of its obligations.
- 18+ years old. Your registered agent in Minnesota must be at least 18 years old.
- Physical address. Michigan law specifies that your registered agent must use a physical street address, not a post office box.
- Who you can designate: If they meet all the requirements, you can name anyone you choose as your registered agent in Michigan. So, it can be a close friend, family member, your lawyer, etc. But be careful when choosing your registered agent. The right choice for your registered agent in Michigan is someone who can be available during business hours, and is also someone you can trust.
What Happens If My Business Operates Without a Registered Agent?
If your Michigan registered agent isn’t available at your business address during business hours to receive service of process from a process server, then the process server will deliver the service of process to the Michigan Secretary of State.
Because you don’t have your hands on these legal notices, you won’t know anything about the legal proceedings being held against your company.
Next, a judge could issue a default judgment against your business.
Additionally, the Secretary of State could repeal your business’s good-standing status, which could have some really drastic legal and financial effects. Your business could be prohibited from expanding to other states, be ineligible for business loans, or be prohibited from transacting business in Michigan.
LLCs can be devastated by the loss of good-standing status. It leaves them open to “administrative dissolution,” which is when the Secretary of State removes the legitimacy of a limited liability company because they haven’t met their legal obligations for things like maintaining a registered agent in Michigan or filing an annual report.
Once a limited liability company has lost its good-standing status, it doesn’t have the legal right to use its name in Michigan anymore. Other businesses could take it as it becomes available. Even if you quickly correct this legal snafu, your company may never get its name back.
A Michigan LLC that’s operating without legal recognition no longer has liability protection, so the business owner is responsible for the company’s financial obligations. If the company is sued, you’ll be held personally and financially accountable, and your financial assets will be vulnerable.
The results of failure to maintain a registered agent in Michigan aren’t limited to LLCs. Because every business entity is required to have a registered agent, corporations and sole proprietorships can experience many of the repercussions listed here as well.
Can I Be My Own Registered Agent in Michigan?
There’s nothing that says you can’t be your own Michigan registered agent. But before you take on that responsibility, you should learn more about the pros and cons of the job.
Cons of Being Your Own Registered Agent
Liability
One major limitation of being your own agent is the negative consequences that come from missing a service of process. Some of these include losing your company’s good-standing status with the Secretary of State or having a default judgment issued against you and not being able to defend your company in court.
Lack of Privacy
If you’re your own registered agent,your personal details (like your phone number, full name, and address) will be listed on public records for everyone to access.
This increases the likelihood of cybercrime and identity theft. It’s also a bit disturbing thinking that anyone—even creeps—could access your information and find out where you live or call your phone. That’s definitely not ideal!
Time
Being a Michigan registered agent takes up a lot of time. You have to be stationed at your registered office address during regular business hours to receive service of process and other legal mail.
But your business is probably also open during regular business hours, and you can’t be in two places at once. The conflicting schedule of these two jobs makes it difficult to perform them both effectively.
Pros of Being Your Own Registered Agent
The one good thing about being your own registered agent is that it’s free.
But with all the legal pitfalls involved with missing a service of process, the additional work involved, and personal information posted on the public record, most responsible business owners don’t mind paying registered agent fees.
But don’t worry. Registered agent fees aren’t expensive, so there’s no reason to take on an extra workload to save money.
Should I Use a Registered Agent Service?
Here are just a few of the reasons to choose a Michigan registered agent service:
- Your Michigan registered agent will issue compliance alerts, so you can rest easy knowing you won’t miss important filing deadlines with the Michigan Secretary of State.
- It’s less likely that your company will lose its good-standing status or have default judgments issued against it because your Michigan registered agent will be present at your registered office address during normal business hours to receive service of process.
- You’ll be free to manage your business efficiently because you won’t be burdened with the workload of two jobs—managing your business and being your own registered agent in Michigan.
- If you have a foreign corporation that operates in multiple states, a national registered agent service can help with your compliance needs.
- Business owners that keep abnormal business hours (gas stations, night clubs, restaurants) can benefit from a Michigan registered agent service because it means they won’t have to work double shifts, and they can get some rest.
- Using your personal address means that an unprecedented amount of junk mail will be sent to your home, and you’ll have to sort all of it. But a Michigan registered agent service can handle this annoying task for you.
- If you hire a Michigan registered agent service, you can select one that offers premium services, like paying for state fees or supplying identity theft insurance.
- Many Michigan registered agent services also offer LLC formation services and offer promotional bundles where you can get free registered agent service for a year.
In the end, it’s your call. You’re the only one that knows your business and whether a registered agent service is the best choice for it. With that being said, I always recommend using a registered agent service for new businesses.
What Is the Best Registered Agent Service?
There are lots of aspects that I looked at when choosing the best registered agent service. Here are a few of the factors you should think about when choosing your company’s registered agent.
Service Features
Don’t skimp on a Michigan registered agent service that doesn’t offer all the services you need for your company.
Some Michigan registered agents provide fantastic online document management systems that allow you to store and view your documents online. Then there are other resident agents that provide only mail forwarding.
Many Michigan registered agent services provide compliance alerts, which will remind you to file your annual report. Others merely supply you with a compliance calendar that you can easily toss in the back of a drawer and forget about.
Make sure that you choose a Michigan registered agent that lives up to your service expectations.
Value
To figure out whether a registered agent service is worth the money, compare its service offerings to its price. If it has a robust service list and a low price, then that registered agent service offers a good value.
On the subject of value, you should stay away from “budget agents.” These registered agent services use deceptive advertising and tell customers that their prices are only $39–$59, then charge them loads more for things like online document management systems and compliance alerts. Budget agents simply aren’t worth it.
Easy Sign-Up
It’s never fun when a company wastes your time. Waiting during the sign-up process can be particularly stressful too. Some registered agents in Michigan make you fill out loads of paperwork only to discover that their sign-up process takes weeks or even months to complete. Make sure that you’re choosing a registered agent in Michigan that has a simple and efficient sign-up process.
User-Friendly Interface
Because of the frequency at which you’ll use your registered agent’s system, it’s essential that your registered agent’s interface be easy to use. You don’t want to get stuck with a registered agent service that has a slow, glitchy, and confusing interface. Make sure you choose a Michigan registered agent with a simple user interface.
Customer Service
There’s no way to avoid technical issues completely, and it’s pretty likely that you’ll eventually have questions about laws and regulations surrounding your registered agent services thanks to all the red tape surrounding them. So, it’s important for your registered agent service provider to supply excellent customer service.
I combined these factors with my four-stage research process to discover the best registered agent service: Northwest Registered Agent. If you’d like to learn more about how I did this, or about how to choose the best registered agent service for your company, read the Best Registered Agent Services.
Conclusion
As a new business owner, you’re expected to learn a lot of information pretty much immediately upon opening your business. Some of this includes the latest business management techniques, learning to use the cutting-edge equipment of your industry, laws and regulations in your state, and various legal and business terms. But a registered agent service can take a fair amount of work off your plate and make your life a little easier.
If you haven’t chosen a business structure and would like to learn more about the formation process, check out my article How to Start an LLC. If you’d like professional guidance through all the red tape involved with the formation process, read the Best LLC Formation services.
Michigan Registered Agent FAQs
What’s the Difference Between a Commercial and a Noncommercial Registered Agent?
A commercial registered agent is one that’s registered as a commercial registered agent with the Secretary of State. Some places require all professional registered agent service providers to become commercial registered agents.
A noncommercial registered agent is any individual or business entity that hasn’t been registered as a commercial registered agent. So, if you’ve designated your family member or friend as your registered agent, they’re technically a noncommercial registered agent.
How Do I Change the Registered Agent for My LLC?
To change your current registered agent, you must file a Certificate of Change of Registered Agent form with the Michigan Department of Licensing and Regulatory Affairs. (No, I didn’t make either of those names up, long-winded though they are.)
All you need to do is add some information about your new registered agent, like your registered agent’s address and your new registered agent’s name. Then you just need to pay $5 in state fees to file the document.
How Much Does a Registered Agent Cost?
How much your registered agent costs depends on a few factors, like your choice of registered agent company and the services and features you require. But typically, registered agent services cost between $39–$299 per state per year. If you’d like to learn more about registered agent pricing, check out the Best Registered Agent Services.
