When establishing an LLC, appointing a registered agent is a critical step that demands a high level of expertise. The registered agent assumes a pivotal legal role, ensuring your business entity remains fully compliant with state regulations.
To assist you in navigating this process with confidence, we have assembled a team of seasoned LLC experts boasting over two decades of experience in the business sector.
Drawing from their wealth of knowledge, this article outlines the fundamental factors to consider when selecting a registered agent carefully.
Quick Summary
- To choose a registered agent for LLC, you must consider the service offered, efficiency, and costs.
- A registered agent keeps your LLC compliant with the state.
- A reliable registered agent should always be available during normal business hours.
What is a Registered Agent?
A registered agent is an individual or a service designated to receive important mail and notes from the state on behalf of your business entity.
A registered agent ensures you respond to statements like tax documents, lawsuits, and other business documents in a timely manner. They are responsible for delivering these documents to the proper individual at the corporation or LLC.
More specifically, here are the three main reasons why the state requires a registered agent:
- Receive legal notices: Individuals with legitimate legal complaints against a business have an official address to send service of process.
- Government can reach you: Through a registered agent’s address, the government has an address to contact a business that's delinquent on taxes or non-compliant with other laws.
- Stay in good standing: Official documents notifying you of any action you must take go to one address.
Keeping a registered agent's name and address with the Secretary of State is mandatory as it makes it easier for the state to communicate with your LLC [1].
Registered agents vary from state to state, but there are common denominators essential to who a registered can be:
- The agent must be an individual of at least 18 years or a business entity providing registered agent services.
- The agent must have a physical street address within the state. Note that a PO box does not apply.
- The agent must be available at the physical address during normal business hours.
- An employee or owner can be their own company's registered agent.
- A business entity cannot act as its registered agent.
"As soon as you hire a registered agent, the state holds you legally responsible for failing to respond to any paperwork sent to your business."
- Richard Gora, Business Attorney
5 Factors to Consider When Choosing a Registered Agent
As a business owner, you should consider your long and short-term needs to weigh your entity's registered agent options.
Here are five factors to consider before you get beneficial services and protection for your business entity.
1. Professional Service
Before choosing an LLC registered agent, you must research if the service is professional. At first glance, the responsibilities of a registered agent are simple.
Because of this, small business owners appoint individuals as long as they have an office address without looking at their availability.
Using such agents places your business at risk of missing out on notices requiring legal action. If you miss out on state legal actions, consequences may arise since you failed to respond to the notice.
But hiring professional registered agent services keeps you out of worry of missing out on notices even when they're out of office. A reliable registered agent service ensures they leave someone in the office during business hours.
Even though they may have urgent business trips or emergencies, they never leave their office unattended.
Additionally, if their office location or contact address changes, they immediately update the state, eliminating delays in correspondence with their clients.
With a professional service, you will receive prompt updates to act quickly.
Given the legal repercussions, hiring a professional registered agent company that handles time-sensitive documents and sends them to you promptly is worthwhile.
2. Choose a Nationwide Registered Agent
Appointing a company's registered agent is a general rule for all states. However, as you start your business, you might expect to expand to other states with time.
Having several registered agents in every state you expand might be costly and inefficient. You will spend time dealing with the different registered agents rather than running your business.
To avoid this, you should choose a nationwide agent. With a single provider, you can meet your entity's obligations, comply with state requirements and oversee annual filings sent to you.
An agent with nationwide coverage will support your business as it grows and expands while you have peace of mind.
3. Evaluate Cost of Service
When looking at costs, an excellent strategy is to evaluate the benefits the agent provides for the price. New business owners often think handling the legal paperwork themselves without hiring a registered agent is the least expensive choice. But, you take a large risk for very little savings.
Cheaper registered agent services might compromise on the level of service provided. A reliable and responsive registered agent is essential for promptly handling and forwarding important legal documents and state correspondence.
Opting for an inexpensive but less reputable agent could result in delays, missed deadlines, and potential legal consequences.
Ensure that they provide extensive experience handling LLC and Corporation formation filings, EIN applications, LLC annual reports, state payroll registration, and other business filings.
Read more about the cost of an registered agent for an LLC.
4. Evaluate Service Efficiency
Another factor that you need to look at is efficiency. Your registered agent should provide same-day electronic filing without any hidden or added fees.
A proficient registered agent promptly receives and handles crucial legal documents, state correspondence, and other official notifications on your behalf.
This efficiency guarantees that you are aware of any legal actions, compliance requirements, or important deadlines without delay.
As business entities grow and evolve, a capable registered agent can adapt to your changing needs. Efficient agents have systems in place to accommodate the expansion of your operations or the addition of new entities, saving you time and effort in the future.
5. Entity Management Software
A good registered agent service incorporates entity management software in its operations. Ideally, entity management software allows timely document submission in your chosen format. You'll check whether the agent uses the software and if the client gets access.
To obtain real-time information on your company's legal compliance level, it's also crucial to understand how the software communicates with government databases.
Your staff will benefit from having a user-friendly interface that provides access to documents, share notices, produce reports, monitor the state of your business, and even manage other crucial filings like annual reports.
By combining their entity management requirements into a single straightforward platform, you can reduce internal paperwork and improve internal reporting.
FAQs
Can I Use a Registered Agent as My Business Address?
Yes, you can use a registered agent as your business address. It's best to use it to protect your privacy, especially if you run a home-based business and don't want your home address to go on public record.
Do You Need a Registered Agent for Your LLC?
A registered agent for an LLC helps you to maintain good standing with the state by meeting essential deadlines, legal notices, and other annual filings like the annual report.
To help you choose the best service provider for your needs, we researched and reviewed the best registered agent services available in the market.
Our thorough evaluation encompassed factors such as reliability, responsiveness, expertise, privacy measures, customer support, and cost-effectiveness to ensure you opt for the best option for your business needs.
References:
- https://www.sba.gov/business-guide/launch-your-business/register-your-business
