Registered Agent Q&A: Help for Small Business Owners

    When you’re starting a small business, time is of the essence. The sooner you file your Articles of Incorporation, the closer you are to opening your doors and sharing your business with the world—so it’s important to fully understand your incorporation requirements from the beginning to avoid any lengthy delays or rejections.

    In most states, having a registered agent on file is one of those requirements. This Q&A is designed to better understand your registered agent requirements as well as highlight potential concerns involved in acting as registered agent yourself.

    What is a registered agent?

    Registered Agent Q&A for Small Business Owners

    Registered Agent Q&A—for Small Business Owners

    When a business is incorporated, it becomes a legal entity—a legal person—just like you and me. (Of course, a corporation has limited rights and powers; a corporation cannot vote or be married, for example.) But for practical reasons, a corporation must have an individual as the point person for the business, someone to whom correspondence may be sent or legal papers may be served. (It’s hard to have a face-to-face interaction with something as abstract as a business entity.)

    A registered agent is that point person. If the state needs to send a notice to your company regarding any compliance news or filing deadlines, they send the notice to the registered agent. If someone sues your small business, the registered agent is served on behalf of the corporation. Or if another company needs your permission in order to register a name similar to yours, the contact information available to them is the registered agent’s.

    What types of businesses need a registered agent?

    Any business that has been organized at the state level and is a separate legal entity from its owners is required to have a registered agent on file: corporations, limited liability companies, and nonprofit organization, for example, are all required to provide a registered agent in their Articles of Incorporation (or Organization, in the case of an LLC). Foreign corporations—businesses that first incorporated in one state and then expanded into and registered with another—are also required to list a registered agent in each state.

    [Note: there are a few states, such as Minnesota and New York, that do not require a registered agent, though they do allow businesses to list them in their records if they choose.]

    Does it matter who is the registered agent?

    In terms of state filing requirements, no, it doesn’t matter—anyone can act as registered agent, provided that person is a resident of the state of incorporation and has a physical address there. This person can certainly be involved in the company in other ways (and in many single-owner businesses, the owner frequently acts as registered agent as a matter of course), but he or she is not required to have any other connection to the corporation at all. The important part is that the registered agent’s address is listed as the registered office address of the business. (The registered office can be, and quite frequently is, different from the principal office address—where the corporation is physically located.)

    Of course, there are other factors to take into account. Since a registered agent’s information is a matter of public record, a small business owner may want to think twice before putting his family’s residence address down in a freely searchable government database in connection to the company. And you can’t just put a friend of yours down as agent and plan to tell him later—acting as registered agent means having a legal responsibility to be available during business hours, and it is the registered agent’s legal duty to pass on state and other correspondence and notices to the business principals.

    Can registered agents be hired?

    Yes: registered agents can be either individuals or business entities themselves, called “commercial registered agents.” While available to any corporation, commercial agents are especially useful for three types of business owners:

    1. The home business owner who wants to secure the privacy of his family;
    2. The entrepreneur who wants to incorporate in a state in which he does not live;
    3. The business owner looking to expand into neighboring states by filing as a foreign corporation in these new states.

    It’s not difficult to find a good commercial registered agent—there are many national companies that have offices in all fifty states, so it’s simple to locate one for whatever state your business requires.

    Last note on registered agents: when searching for a commercial agent, it’s worth your while to compare terms and conditions—many registered agents offer perks, such as document scanning, compliance newsletters and reminders, and updates on new state regulations and legislation that affect your industry.

    Registered Agent Solutions, inc. is a great one that we’ve worked with quite a bit, but however you go about it, you should be able to find a commercial agent for somewhere between $100 and $150.

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      2 comments on “Registered Agent Q&A: Help for Small Business Owners
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