Every LLC, C corporation and S corporation must have a registered agent in its formation state and in each state where the company is registered to do business. A registered agent’s responsibilities are few: to accept service of process, official state government and judicial documents on your behalf and to transmit those documents to the proper individuals in your company quickly and efficiently. However, like your fire alarm system which also has few duties, the importance of the registered agent cannot be underestimated. Legal documents usually demand a response within a very short-time frame. Any delay in receiving or transmitting them can create problems and cost money.
When starting a business, many entrepreneurs consider acting as their own registered agent or having their attorney serve as registered agent. However, there are circumstances when the wisest course of action is to partner with a professional registered company, such as CT.
You Are Not a Resident of the State
A registered agent must be a resident of the state or a corporation that is qualified to act as a registered agent in the state. Many owners opt to incorporate or form an LLC in a business-friendly state, such as Delaware, Nevada or Wyoming, which prevents them from serving as registered agent. Other times, a business has expanded into new states and the in-state resident requirement precludes the owner from serving in any but the home state. Retaining a professional registered agent service solves these problems. But, the decision does more than provide the requisite physical address. Professional registered agents are just that “professionals.” These specialists have extensive experience with that state’s compliance rules and an extensive knowledge of the nuances of that state’s laws.
You Don’t Have a Permanent, Physical Business Address or Normal Business Hours
A registered agent must have a physical address and be available during normal business hours. Many business owners do not meet those requirements. Perhaps your business is strictly online or you have a mobile business without a fixed business location, such as a food truck or a delivery service . If your business does not have a physical address, then you must appoint a registered agent that satisfies this requirement.
Perhaps you do have a physical address—but it is short-term. The registered agent’s name and address must be on file with the state. And, each time the address changes you must make a formal state filing (and possibly pay a fee). If you fail to notify the Secretary of State of your changed location, you not only run the risk of fines and dissolution of your entity, but having a default judgment entered against your business. Having a professional registered agent eliminates these worries.
Another instance where it makes sense to have a professional registered agent is when you are not available during normal business hours. For example, a contractor might spend the day at the job site, not at the office. If a process server shows up and finds the office empty, you risk a default judgment. This is one of the perils of serving as your own registered agent.
You Work From Home or Wish to Guard Your Privacy
A registered agent’s address is a matter of public record: Anyone can access it. This includes marketers who can swamp your mailbox with unsolicited mailings. What’s more, service of process, which is the notice that your company has been named in a lawsuit, is frequently delivered by local law enforcement officers. If you use your business address, it can be awkward if customers or clients are present when the process server arrives and if you use your home address, you may find yourself on the receiving end of questions from your neighbors. With a professional registered agent, your home address is not a matter of public record and any Service of Process is delivered discretely.
To Sum Up
If your business finds itself in any of these situations, it is time to weigh the pros and cons of serving as your own registered agent. Knowing that any legal or government documents related to your business will be handled promptly, efficiently, and discretely can provide peace of mind and assurance that your plans won’t be jeopardized by a mishandled document.