One of the first things you’ll need to establish when registering your business is one or multiple registered agents. Your company will need a registered agent in the state where you started your company and any states where your business is registered as a foreign entity. Apart from the requirements regarding registered agents, it might be useful to have one anyway.
First, What is a Registered Agent?
Each state wants a point of contact for every business registered within its borders. In other words, your company needs a registered agent wherever it has a physical presence. While most businesses regularly receive a ton of physical mail, some correspondence needs to be handled in person. Legal notices, tax forms, letters from state agencies, and other important communications need to be delivered a certain way. A registered agent is an individual (or, possibly, a business) with the authority to receive these documents on behalf of a business.
Registered agents typically cost between $100 and $300 per year. Each state has different requirements for its registered agents, but one near-universal requirement is for the agent to keep regular business hours. The owner, manager, or employee of an LLC or other incorporated business is generally allowed to be a registered agent. Other times, entrepreneurs outsource this service to third parties—who may offer additional services beyond the essential duties of a registered agent.
So, You Don’t Need a Registered Agent. Is it a Good Idea to Still Have One?
There’s a good chance the answer to that question is, “yes.” Small business owners with only a few employees under their purview can usually manage as their own registered agent, but it can still be a lot to handle. As a founder of an LLC, partnership, or corporation, your hands are probably full just ensuring that your company turns a profit. Even though having a registered agent is an extra expense, getting some of those important obligations off your plate is invaluable. Knowing that someone else (whom you can trust) is being paid to keep track of important documents gives you peace of mind.
Another benefit of having a registered agent is privacy. If you operate a brick-and-mortar business that has customers coming and going all day, would you want them to see your company getting served with a lawsuit? Conversely, if you don’t have a brick-and-mortar store, you might work non-traditional business hours. Having a registered agent who does keep regular hours ensures that your business is receiving important correspondence.
Each State is Different
In many cases, you aren’t given a choice on hiring a registered agent. Other times, you might have a choice on either acting as your company’s registered agent or hiring someone else—if you need one at all. Lockhart IP helps small business owners figure out the best strategy for their registered agents so the important things are taken care of and they can focus on their strengths. Want to discuss your options with our team? Reach out today to schedule a consultation.