If you’re planning on registering your future business as a limited liability company (LLC), you’re probably already overwhelmed by the multitude of tasks that come with becoming an entrepreneur. But there’s one important aspect you should pay great attention to, if you want to do things by the book and ensure your company is set for success: you need to designate a registered agent for your business.
It’s a requirement for limited liability companies operating in the US to have a registered agent. A registered agent’s job is to receive important legal documents such as service process notifications, tax forms and other similar documents on behalf of the company it represents. Not having a registered agent can bring serious consequences. If your company fails to comply with the LLC requirements in your state, you risk getting fines and penalties, and ultimately you can lose your business.
So, let’s dig deeper into the topic and take a look at some of the aspects you must be aware of when choosing a registered agent for your LLC.
Why you need a registered agent for your LLC
First and foremost, we must explain why having an LLC registered agent is so important. When you choose to register your business as an LLC, you draw a line between you as an individual and your business. That way your personal assets and your business assets are legally separated.
A registered agent strengthens this distinction, ensuring the proper functioning of your business. The registered agent is in charge with receiving service of process notices, government correspondence or compliance documents that are sent to your business and then pass the information on to you, allowing you to focus your energy and time on more important aspects.
Besides acting as an intermediate for your LLC, the registered agent will also keep an accurate record of all the essential information related to your business, so you’ll know where to find the necessary documents and data whenever you need them.
But what if according to your state’s regulations you don’t have to appoint a registered agent for your LLC? Even when this is not a legal requirement, designating a registered agent is still a smart decision. Do you really want to spend your time reading legal correspondence, going through tax notices or struggling to stay up to date with compliance standards? You definitely have better and more important things to do, like trying to grow your business, so it’s best to let a registered agent take care of all these aspects for you.
When you decide to designate a registered agent for your LLC, there are some criteria you have to keep in mind.
The first thing you should know is that a registered agent can be either an individual or an entity. If you decide to appoint a person as an LLC registered agent, that person has to be over 18 and live in the state where your LLC is formed. If you choose a company to act as your registered agent, you must make sure the company is authorized to perform business transactions in the state where your LLC was registered. When hiring a third party as a registered agent, remember that different companies will charge different prices for the services they provide.
If the individual you’ve selected as a registered agent moves out of state, he’ll no longer be able to represent your business. Similarly, if the company you’ve hired no longer has an office in your state, you’ll have to choose another entity to serve as a registered agent. Both individuals and businesses must maintain a physical address in the state where you formed your LLC if they want to act as a registered agent for your business. Using a post office box address is not accepted.
It’s also possible for an LLC to be its own registered agent, provided that its physical address is in the same state where the LLC was created. Members of the staff can also be appointed as registered agents, as long as they reside in the same state. The registered agent’s address is a matter of public record, so the LLC has the obligation to list it in the LLC’s articles of organization.
Your LLC’s registered agent, whether we’re talking about a person or a company, has to be available during regular business hours.
It’s up to you to decide if you want to be your own registered agent, or if you want to hire a company to act on your behalf. However, there are strong reasons why we advise to go with the second option. Here’s why choosing a third-party as a registered agent is a much better solution:
- You’ll have peace of mind – when you have a business to run, it’s easy to lose sight of certain aspects. You can miss important deadlines or you can be out of town when an important notice arrives. But when you hire a third-party as a registered agent, you’ll have someone to take care of your legal correspondence at all times.
- You’ll avoid awkward moments – a registered agent will save you the embarrassment of receiving legal documents in front of your staff or clients.
- You’ll be able to change your address – if you want to change your business location, you can do that without the need to inform the state of your new address and pay fees for the change.
- You’ll be able to expand business operations – if you want to do business in other states as well, a third-party registered agent will be able to make the process easier for you.
- It will protect you against legal issues – a registered agent will ensure you don’t lose track of important paperwork, so legal issues will be kept at bay.
- You’ll enjoy more flexibility – you won’t be tied to your office during regular business hours if you choose to hire a third-party as a registered agent.
- You won’t waste your time with junk mail – you’ll spare yourself the trouble of going through tons of junk mail, if you have a registered agent for your LLC.