By Courtney Johnston,
The Blueprint
A limited liability company (LLC) is a popular business entity that many
owners choose when forming a new company. You can form an LLC if you have
business partners, employees, or even if you’re self-employed. This business
entity offers many benefits but has some requirements you’ll need to
consider, such as designating a registered agent.
If you’re considering forming an LLC or are already in the process of
starting one, you’ll need to find a registered agent. In order to file your
articles of origination and register your new business, you’ll need to
assign this registered agent to your LLC. In some states, your agent will
even be required to sign your company formation paperwork.
In this guide, I’ll take you through everything you need to know about
registered agents, how to find one, and some additional considerations.
Overview: What is a registered agent for an LLC?
A registered agent is an individual or business entity located in the same
place as your LLC who is responsible for receiving communication from the
secretary of state and other branches of government on behalf of your
company.
While most states refer to this individual or entity as a “registered
agent,” some states refer to this position as a “resident agent.”
What are the responsibilities of a registered agent?
A registered agent for an LLC has a few different responsibilities.
Generally, you can expect your registered agent to:
- Receive government communications on your company’s behalf. Your registered agent is required to have a residential or business address in the same state as your LLC in order to receive government correspondence during typical work hours on weekdays (9 a.m. to 5 p.m. local time). This address must be a physical location where the registered agent is present during these working hours and not a P.O. box.
- Act as a liaison between your LLC and the Secretary of State. In addition, your registered agent will pass on important information between the government and your company for you to then act upon or file while maintaining and keeping records of correspondence from the government.
- Accept summons and subpoenas for your LLC. Your registered agent can also accept summons and subpoenas on behalf of your company in order to keep legal disputes private.
4 reasons your LLC needs a registered agent
A registered agent can be beneficial to any LLC. In fact, finding a
qualified registered agent can be important to your company’s operations.
Here are four reasons why you should consider hiring a registered agent.
1. It may be mandatory
In many states, it’s mandatory to select a registered agent to represent
your company. You won’t be able to form an LLC without designating an agent,
and if you continue to fail to work with an agent, your company could fall
into bad standing with the state.
While the registered agent you select does not necessarily have to be a
third-party agent or service, in many cases it makes sense to hire an
outside agent (I’ll get into exactly why a little later on).
2. They offer administrative benefits
If your LLC does not yet have a document management system or isn’t fully
prepared to flag important government communications and catch essential
paperwork and notices, your company could easily become noncompliant with
local or state laws or run into legal trouble.
Partnering with an experienced registered agent is a straightforward way to
ensure all government paperwork is sent to a separate address, where it can
then be passed on to your company and clearly communicated.
3. You won’t be tied to your desk or office
While you (or another member of your company) can act as your own registered
agent in many cases, there are some limitations that come along with this
decision, such as being tied to your office address during typical
government working hours. This might not be an issue for all LLCs but could
become a problem if you enjoy working flexible hours, traveling, or handling
business during a different shift.
If you partner with an outside registered agent, however, you’ll have more
flexibility in how you run your business, allowing you to determine the
schedule that best fits your needs and lifestyle.
4. They can save you from embarrassing legal trouble
No business owner wants to be served a summons or subpoena in front of
clients, during an important meeting, or when potential investors are
visiting. However, without a third-party registered agent, the government
could end up serving your legal papers without warning at your office. Not
only can this be disruptive, but it can be embarrassing and potentially kill
business deals.
Who can serve as the registered agent for your LLC?
Each state has its own guidelines regarding who can serve as a registered
agent for your LLC. I’ll cover some typical criteria below, but be sure to
review your state’s secretary of state website for additional requirements:
- Must be 18 or older
- Must live or work in the same state as your LLC and hold a residence or business location within this state
In addition, your registered agent can be an outside third-party agent or a
business entity, or could even be yourself (if allowed by your state) or
another member of your company. Keep in mind, you’ll lose some privacy
protections if you choose to keep your registered agent in-house.
You can also find a list of registered agents online on your state’s
official government (or state secretary of state) site.
3 considerations when selecting a registered agent
If you decide to hire an outside registered agent, it’s important you don’t
hire just anyone. Your registered agent fills an important role, so you’ll
want to keep the below considerations in mind before making a selection.
1. Experience
It’s important to make sure nothing falls through the cracks that could
leave your LLC in bad standing with the secretary of state’s office. Some
communications require prompt responses and will need to be acted upon right
away. A relatively new registered agent might accidentally cause you to miss
a deadline or reply too late to a government request.
Working with an experienced registered agent who has handled many different
types of government communications and notifications can offer you peace of
mind.
2. Location
Since you need a registered agent who is available in your LLC’s state of
formation, you may need different agents if you’re operating in multiple
states. You can avoid this hassle by working with a national registered
agent who has office locations across the country or with a qualified
business service that can serve as your registered agent in multiple states.
3. Cost
Of course, the cost of hiring a registered agent is a factor to take into
consideration, especially if your LLC is new and not yet profitable.
Luckily, many reputable online companies such as IncFile, LegalZoom and ZenBusiness
offer registered agent services in multiple states for a low price, while
also providing additional administrative perks, such as filing DBAs (doing
business as), which are fictitious names used when you sell products or
services under a business name different from your official LLC name.
Stay compliant with a qualified registered agent
If you own an LLC, you’ll most likely be required to assign a registered
agent to your business. While many states allow you to select an in-house
individual to serve as your registered agent, I always recommend partnering
with an outside service or agent. Third-party agents can provide your
company with more security and confidentiality, and at the very least can
save you from an administrative headache.
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The Blueprint
