A registered agent is an individual or company you designate to receive court papers (what lawyers call “service of process”) and government notices on behalf of your business.
States have required this role since the early days of business registration. It’s a crucial part of your company’s compliance with the law. It also helps ensure that your business stays in good standing.
Service of Process
If you own a corporation, LLC, or limited liability company, you must appoint someone in your state to receive legal documents and lawsuits on behalf of your business. This person is known as a registered agent.
The service of process that a registered agent provides is crucial for every business entity. It is the mechanism through which a person filing a lawsuit delivers a summons to the defendant.
Almost all states require that corporations, LLCs, and partnerships appoint someone to receive SOP on their behalf. This person is called a registered agent, resident agent, or statutory agent.
Many businesses choose to hire a registered agent service company instead of designating a corporate officer or another individual to serve as their own registered agent. This allows them to ensure that important papers are received and sent to them without interruptions to their business operations or delays in receiving notices.
Notices
A registered agent is the person or company that you appoint to receive official notices, such as service of process and government correspondence.
Having a registered agent can help ensure that you get important legal papers and time-sensitive compliance documents to your business in a timely manner. In addition, a registered agent is often the point of contact for the Secretary of State (or whatever your business entity filing office is called) to send annual and/or biennial reports and other information to your business.
While some business owners are tempted to appoint an employee, owner or officer of the entity as the registered agent, this is not typically the best option. These individuals may not be available during normal business hours, may forget to forward the received papers to the LLC’s or corporation’s attorneys or may simply not know what to do with the documents.
Filings
Upon incorporating, most states require an LLC or corporation to designate a registered agent. Often a member or employee of the business, this person provides physical presence in-state to provide service of process and other statutory representation.
In addition, if a corporation or LLC has business activities or operations in other states, it must designate a registered agent in every state where it conducts business. This is to reduce the administrative burden and ensure that a company remains in good standing with the states where it does business.
Many business owners think that they can appoint themselves or someone within the company as their registered agent, but this is usually not the best option. A professional registered agent can make sure that legal documents are received and forwarded promptly, and they can remind business owners of compliance filing deadlines and keep copies of important corporate documents.
Compliance
If you operate a business, it’s essential that you comply with compliance regulations and requirements. These requirements can be difficult to implement, but a solid compliance plan is a great place to start.
One of the most important steps is ensuring that your employees know and understand your organization’s internal policies and codes of conduct. You can accomplish this through employee training and workplace technology.
In addition, you need to ensure that your employees adhere to all regulatory and corporate standards. These include rules and policies prescribed by local, state, and federal governments as well as industry certification and accreditation entities.
If you don’t meet these requirements, the state can administratively dissolve your company or impose fines on your owners. In some cases, these penalties can reach into the millions of dollars.
