If you’ve formed your business as a corporation or limited liability company (LLC), you’re required to maintain a registered agent in your company’s home state (and any other states where you’ve filed to operate your business).
A registered agent is a company or individual a business entity designates to receive service of process notifications (e.g., lawsuits, subpoenas, and court summonses), compliance documents (e.g., annual reports), and government correspondence on its behalf. After receiving important notices and documents, a registered agent promptly forwards them to the LLC or corporation so its owners can take action (if required) and keep them with their other business records.
What qualifications does a registered agent need?
States’ rules vary regarding the criteria someone must meet to serve as a registered agent. Common requirements and restrictions include:
- A registered agent must be a business entity in the state or an individual who is at least 18 years old and a resident of the state.
- Businesses may not act as their own registered agents.
- A registered agent must have a physical office (street address, not a P.O. box) in the state.
- A registered agent must be available to receive notices between 8 a.m. and 5 p.m. Monday through Friday at the location mentioned as the registered agent’s address on the LLC’s or corporation’s formation documents.
Benefits of choosing a third-party company to act as your LLC or corporation’s registered agent
Even if a business owner may appoint an employee, family member, friend, or even themselves as their LLC’s or corporation’s registered agent, that might not be the wisest decision. Things can slip through the cracks if the designated person becomes ill, leaves for vacation, is unorganized, or otherwise fails to be up to the task.
One of the biggest disadvantages of a business owner serving as their own registered agent is that their name and home address become part of the public record filed with the state, thus jeopardizing privacy.
For these reasons, it's advantageous for businesses to designate an outside company that has all the processes and procedures in place to reliably perform registered agent services. And if an LLC or corporation is located in (or intends to expand into) multiple states, a registered agent authorized to provide its services in all 50 states simplifies things—e.g., one point of contact for managing registered agent renewals, one central hub for all compliance documents, etc.
What should you look for in a registered agent?
Photo by Scott Graham on Unsplash
Not all registered agent service providers offer the same level of service and value. Cost alone does not tell the whole story. It’s important for business owners to consider their current and long-term needs and weigh their registered agent options based on whether the providers have the expertise and capabilities to support them.
Some questions to consider when comparing providers include:
- Does the registered agent offer a money-back guarantee if I’m unsatisfied? The hallmark of a reputable provider is that they’re willing to reimburse clients for an unsatisfactory experience.
- Does the registered agent include compliance monitoring to automatically inform me when an upcoming compliance deadline is approaching? Missed due dates can lead to fines and other penalties. Some providers include monitoring for free, others charge an additional fee for it, and some don’t offer it at all.
- Does the registered agent have a free online portal for viewing and managing all compliance requirements and documents? While it seems it would be a standard feature of registered agent services, not all providers offer the convenience of a user portal for keeping compliance documents and tasks organized.
- Is the provider authorized as a registered agent in all 50 states? This is especially significant if a business intends to expand beyond its home state.
- Does the registered agent provide a full suite of services to support business formation and compliance? Registered agents that specialize in more than just registered agent services bring a lot of additional value to business owners. So, consider whether the provider has extensive experience handling LLC and Corporation formation filings, EIN applications, annual reports, state payroll registration, and other business filings. Having all that expertise in one place can save time and simplify all aspects of managing business compliance.
- What do I know about the people who own and run the registered agent company? Some providers don’t openly disclose any details about their executive leadership and management teams. For reassurance that your LLC or corporation is in capable hands, look for a provider who has experienced individuals at the helm.
Value matters most when choosing a registered agent
You have many registered agents to choose from. Check with your state for a list of commercial registered agents that provide services in your state. Also, check reviews on Trustpilot to see how LLCs and corporations have rated companies that provide registered agents’ services.
As you research providers online, you will likely discover some remarkably cheap companies in the mix. Buyer beware! Many business owners have been misled by registered agents who offer prices that seem too good to be true. Those low-cost providers are infamous for poor customer support, limited capabilities, and inadequate expertise to address questions and issues.
As you can see, there’s much to consider besides price alone when selecting a registered agent. Think through what your LLC or corporation needs now and what it will need in the future, research your options thoroughly, and make an informed decision confidently.
