What is registered agent? You need a registered agent if you have an LLC. When it comes to choosing how you’ll satisfy that requirement, you’ve got some options.
If you are a small business owner who has recently decided that a limited liability company, or LLC, is the best business structure for your business, and you have started preparing your Articles of Organization, you probably already know that you will need a registered agent.
But what is a registered agent? Who should you appoint as your LLC’s registered agent, and how do you decide?
What Is a Registered Agent for an LLC?
LLC registered agents are individuals or entities designated by the LLC to receive service of process notices, government correspondence, and compliance-related documents on its behalf.
Generally speaking, the term “agent” refers to someone who has the authority to represent an individual or an entity, or to enter into transactions on behalf of that individual or entity, but registered agents are different.
The registered agent for an LLC has one primary function: to receive and process court papers and other important correspondence on behalf of the LLC. In addition, a registered agent must forward such materials to the LLC in a timely manner.
Registered Agent Requirements
A registered agent must meet a few simple requirements in order to qualify. A registered agent must be a resident of the state in which your LLC is registered.
A registered agent must also have a physical address where documents can be delivered. This means a P.O. box cannot be used.
Even though these requirements are simple, you should carefully consider who you should appoint as your registered agent.
Nominate yourself or another LLC member
At first glance, naming yourself or another member of your LLC as your registered agent may seem to be a good idea. However, there are a few things you should keep in mind.
A registered agent must always be available to accept service of process notices, government correspondence, and other important documents. The registered agent must always be available at the physical address you registered during normal business hours.
Deliveries cannot be made if the registered agent isn’t available-for example, if the person you designated takes holidays or occasionally goes off-site to meet with a client.
Other considerations? As a rule, if you designate a member of your LLC as your registered agent, the physical address you use for service will be your business address. That’s where your registered agent is most likely to be during regular business hours. As a result, it can be quite embarrassing if someone sues your LLC and serves notice of the lawsuit in front of your customers or clients.
You’ll also need to file a change of address for your registered agent if your business moves. A third-party registered agent allows you to move your business as often as you like without affecting the address of your registered agent.
Third-Party Registered Agent Services
As your LLC’s registered agent, a registered agent service can receive documents on your behalf and forward them in a timely manner.
Since these firms are professional registered agents, you can rest assured that someone will always be on hand during normal business hours to take delivery of notices and other documents on your LLC’s behalf. You can also count on them to forward notices and other documents promptly.
If you do not have a registered agent, what happens?
At the time of LLC registration, you will generally need to name a registered agent. You must file a change of registered agent form if your registered agent changes.
When you register your LLC, you may feel tempted not to maintain a registered agent. In the absence of a registered agent, you will face serious consequences.
The state in which you registered your LLC may no longer consider it in good standing. In addition to potential penalties and fines, your LLC could, among other things, lose its ability to enter into contracts or bring lawsuits.
Additionally, you run the risk of not receiving service of process or other important correspondence that requires a response.
For example, if you do not receive a service of process regarding a lawsuit, you will not be aware that you are being sued. You won’t be able to respond in a timely manner if you aren’t aware that you are being sued. It is unlikely that you will attend the court proceedings. A default judgment may be entered against you.
If you fail to respond to government correspondence relating to compliance, you may be subject to fines and other sanctions.
An LLC registered agent provides a basic and simple function, but it is also extremely important. The process of selecting a registered agent that can perform this function effectively is important for both your LLC and your own peace of mind.
