Updated January 19, 2023

What is a Registered Agent

Read more about Business

Getting a registered agent is part of the LLC formation process. But does your business really need one? Find out what a registered agent is below.

A registered agent is a requirement for all LLCs and corporations. Every business must include this information when filing its formation documents with the state.

Still, some wonder whether their business actually needs one.

What is a registered agent? What do they do? Should you hire a third-party service for this?

Let's get into it.

What Does A Registered Agent Do?

A registered agent is an individual or agency that receives mail and important documents on a company's behalf.

These include subpoenas, court summons, lawsuits, state compliance notices, and tax forms. They then forward these to whoever's responsible for them in the company.

A registered agent also serves as a business's primary point of contact whenever the government or other institutions want to get in touch with the company.

Registered agents are also known by these names in other states:

  • Resident agent
  • Agent for service of process
  • Statutory agent
  • Registered office

Businesses are legally obligated to have one listed in their official paperwork (Articles of Organization or Incorporation) when filing to become LLCs or corporations. They must include the registered agent's name and street address in the state.

In most cases, anyone can be a registered agent as long as they're qualified. Learn more about the requirements in the "Who Can Be a Registered Agent" section.

What Are the Other Purposes of a Registered Agent?

Besides receiving legal documents and forwarding them to you, a registered agent can also:

  • Alert you about upcoming deadlines (like an LLC's annual reports)
  • Help your business comply with state regulations
  • Assist you with organizing and safeguarding important documents
  • File the necessary documents on behalf of your company

Note: A registered agent's level of involvement in your business activities depends entirely on you. They can't act on behalf of the business (except to receive important legal documents) unless they're authorized to do so.

Who Can Be a Registered Agent?

Most states allow anyone to be your company's registered agent. You can do it yourself, assign someone you trust (e.g., your business partner or lawyer), or hire a third-party service.

Some states also act as the default registered agents for all the companies formed in their jurisdiction. But you can still assign your own.

Note: If you're a single-member LLC or corporation, you can name yourself as the registered agent.

Regardless of who you choose, they should still meet the following criteria:

  • Must be 18 years old and above (if an individual)
  • Must be a resident in the state where the LLC/corporation was formed
  • Must have a physical street address in the said state (P.O. boxes and virtual addresses not allowed)
  • Must be available during regular business hours (9 a.m. to 5 p.m.) during weekdays (Mondays to Fridays) to receive documents and notices
  • Must be authorized to do business in the state (if a registered agent service)

Is a registered agent a member of an LLC?
Not necessarily; non-members can serve as your LLC's registered agent. You can assign another LLC member to be your company's registered agent. But this is up to you.

The requirements can differ in every state. So check your Secretary of State's website before assigning someone to the role.

Aside from these, business owners must also ensure that their registered agent's listed information is always accurate and updated. Doing so will prevent delivery problems in the future.

Why Do You Need a Registered Agent?

Here are some of the reasons you need a registered agent:

Compliance
You need a registered agent to comply with state regulations. Businesses filing to become an LLC or a corporation must include their designated registered agent's information in their Articles of Organization or Incorporation.

You can't form an LLC or corporation if you don't have a registered agent listed. You're also required to have one in every state where your business is authorized to do business.

Not having a registered agent can negatively impact your business. Find out how in the "What Happens If I Don't Have a Registered Agent" section.

Timely Responses
A registered agent can also help your company stay on top of legal matters. They're always available to receive legal documents and can forward them to you as soon as they receive them.

This allows your business to respond on time to things like lawsuits or court summons. You don't have to worry about suffering negative legal consequences just because you missed important documents.

Better Organization
You can stay more organized since registered agents screen your company's incoming mail. They can filter out junk mail and forward only essential mail and paperwork to your business.

They can also remind you of any upcoming requirement deadlines for your business. This will give you enough time to gather what you need and avoid penalties for being late.

Does an Online Business Need a Registered Agent?

Any business registered as an LLC or corporation must have a registered agent - even online businesses. This is a state requirement. All LLCs and corporations need to comply with this to avoid negative legal consequences.

Just remember that while online businesses can use virtual addresses, registered agents cannot. They must be a resident of and have a physical street address in your LLC's formation state.

If you don't have a physical address in your LLC's state, using a third-party service might be a good idea. These companies usually have physical offices in every state that serve as their registered address.

Can I use my home address as my Registered Agent address?
Technically yes, you can as long as it's in the state where your LLC/corporation is registered. But it's generally not advisable to do so.

This can pose risks to your privacy because your address will become part of the public record. Plus, it can blur the line between your personal and business matters. Some areas also have stricter rules about how home-based businesses operate.

It's better to use a different registered address or hire a registered service.

Can You Be Your Own Registered Agent?

Yes, you can.

In fact, it's the more affordable option since you don't have to pay anything to be your company's registered agent. But most advise against being your own registered agent.

Here's why:

  • Risks to Privacy: A registered agent's details (e.g., name and street address) are part of the public record. Anyone can access your information if you act as your own agent. This can be risky, especially if you used your home address for your registered address.

  • More Responsibilities: You'll be responsible for handling all the legal paperwork that comes your company's way. You need to be organized and ensure the right person gets the documents. Otherwise, your company might encounter legal problems.

  • Less Freedom: Registered agents must always be present during regular business hours to receive incoming mail and important documents. This leaves you with less freedom over your schedule. You also can't leave your registered address during this time because you need to personally receive all deliveries.

Assigning someone you trust also involves the same downsides with one other condition: you need their signed consent. You usually need to file this with your Articles of Organization/Incorporation.

Why Hire a Registered Agent Service

Some business owners hesitate to hire third-party companies as their registered agents, mainly because of the annual fees. But they actually offer many benefits, like:

Protects Your Privacy and Security
Registered agent services have their own physical addresses in the state where they operate. You don't have to risk your privacy and security by listing your personal/home address in the public records.

Preserves Your Credibility
A third-party service can help your business preserve its credibility and favorable impression among your customers. They'll receive the lawsuits and court orders on your behalf so that your clients won't witness you being served.

Offers Better Flexibility
With a third-party service, you don't have to constantly update your records every time you move. You can also start an LLC/corporation in other states without worrying about the address and residency requirements.

Besides that, you don't have to worry about missing important paperwork whenever you travel or are busy with other matters. Third-party services can even help you meet state requirements and retain your business' good standing.

Gives You More Control Over Your Time
You no longer have to stay put at one location during weekdays. And you can enjoy more flexible work hours because you don't have to be available during business hours.

How much does a registered agent cost?
Third-party registered agent services usually cost $99 to $300 per year. The exact price depends on the service. Some companies offer free registered agent services during the first year if you get their LLC formation packages.

Registered Agent Quiz

Should You Be Your Own Agent or Hire a Service?
Do you prefer keeping your name and home address private?Yes - Hire a service.
No - Be your own.
Does your business operate in other states?Yes - Hire a service.
No - Be your own.
Do you have a physical address/live in your LLC's state?Yes - Be your own.
No - Hire a service.
Are you always available during business hours?Yes - Be your own.
No - Hire a service.
Do your customers come to your place of business?Yes - Hire a service.
No - Be your own.
Do you travel often?Yes - Hire a service.
No - Be your own.

5 Best Registered Agent Services

If you prefer someone else to be your registered agent, here are the top 5 services you can try:

ZenBusiness

ZenBusiness is an online, all-in-one formation service that helps business owners set up their LLCs with the fewest hurdles possible. They guide clients through the entire process, starting with a free business name search. They even help you get a business domain name.

They also offer registered agent service as an add-on or on its own. This costs $199/year.[1]

You can also get their Worry-Free Compliance service which includes annual report filings and up to 2 business amendments per year.

With this, you can leave all the yearly filing requirements to their team. So you can focus on the other aspects of your business.

This costs $199/year.[2]

Pros and Cons

  • Reliable and efficient services
  • Straightforward pricing
  • Guided formation process
  • No free registered agent service included

Northwest Registered Agent

Northwest Registered Agent is another popular option.

Initially, they only offered registered agent services but have since expanded to provide formation packages. You can hire them once for a one-time fee or subscribe to their monthly services.

At Northwest, you can start your LLC for just $225 plus state filing fees, which includes a full year of registered agent services. You can purchase the registered agent service separately at a flat rate of $125 per year.

If you need the service in five or more states, the rate drops to $100 per year.[3][4]

Pros and Cons

  • Easy and seamless checkout process
  • Reasonable pricing
  • Dedication to customer privacy
  • Add-ons are pricey and drive up the total cost

Incfile

Incfile is at the top of the list when it comes to convenient LLC formation packages. But what stands out is that they only charge you for the state filing fees. This can save you money, especially since some states have expensive filing fees.

They also offer free registered agent services for one year as part of their formation packages. After that, you have to pay $119 per year to continue using it.[5]

Pros and Cons

  • Easy-to-use formation service
  • Affordable prices
  • Solid reputation in the industry
  • Slow customer service response

Rocket Lawyer

Rocket Lawyer is an online firm that mainly offers legal services to business owners. This means you can turn to them for LLC formation and legal advice and documents.

They have a subscription-based service that you can try for free for 7 days. It costs $39.99 per month after that. With a membership, you enjoy their basic services at no additional cost and discounted prices for others.

For example, their registered agent service costs $239.99 per year for non-members, but members get a 25% discount. You can also enjoy 40% off for their on-call attorney services.[6]

Pros and Cons

  • Intuitive user interface
  • Excellent customer support
  • Comprehensive legal and formation services
  • Expensive if you don't need legal services

Inc Authority

Inc Authority is another online service that offers its LLC formation services for free. Like Incfile, you only have to pay for the state filing fees.

They have more premium packages starting at $399 per year. These have additional services like annual report notifications and tax consultations.

Their registered agent services are free for the first year and cost $179[7] annually after that. You're automatically charged after the initial year ends. But you can cancel your plan beforehand.

Pros and Cons

  • Simple and easy-to-understand service
  • Budget-friendly
  • Excellent service quality
  • Expensive premium packages
  • No refunds (all sales are final)

What Happens If I Don't Have a Registered Agent?

There are a few things that can happen if you don't have a registered agent:

  • You can't form your LLC/corporation: The government requires all LLCs and corporations to list a registered agent in their formation documents.[8] Not having one means the state won't accept your registration.

  • You can miss out on important documents: This happens if no one is there to receive the paperwork on your company's behalf.

  • Your business might be subjected to fines/penalties: This can happen if you fall behind with compliance requirements or fail to respond to legal matters on time.

  • Your company might lose its good standing with the government: As a result, your business can't expand to other states, receive business financing, file lawsuits, or use its business name in the state.

  • Your LLC or corporation will be suspended/dissolved: Having a registered agent is a state requirement. They'll consider your company non-compliant if you don't have one.

Can you change your registered agent?
Yes, you can. But you'll need to update the listed information in your Articles of Organization/Incorporation.

You'll need to file a form (usually called "Statement of Change of Registered Agent") with your Secretary of State's office. Some registered agent services can file it for you.

You might also need to pay some filing fees. These usually range from $25 to $50.

Bottom Line

A registered agent isn't just a requirement for forming an LLC or corporation. They can also help you stay on top of things and ensure that your business complies with your state's regulations.

Not having one can cause many problems for your business. But it's not always easy deciding who to assign as your registered agent.

If you're acting as your own registered agent, make sure you're ready for the responsibilities involved. But, if you're going for a third-party service, picking a company that offers reliable services at reasonable prices is best.

References

  1. ^ ZenBusiness. Products & Pricing, Retrieved 11/10/22
  2. ^ ZenBusiness. Worry-Free Compliance, Retrieved 11/10/22
  3. ^ Northwest Registered Agent. How much does it cost to start an LLC?, Retrieved 11/10/22
  4. ^ Northwest Registered Agent. Registered Agent Service, Retrieved 11/10/22
  5. ^ Incfile. How much will it cost to renew my Registered Agent service?, Retrieved 11/10/22
  6. ^ Rocket Lawyer. Pricing, Retrieved 11/10/22
  7. ^ Inc Authority Pricing, Retrieved 01/18/23
  8. ^ U.S. Small Business Administration. Register your business, Retrieved 10/28/22

Write to Alyssa Supetran at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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