Why Do I Need a Registered Agent?

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Most states require business entities to have registered agents, but even if your state doesn't, you should strongly consider getting one. Read on to find out more about registered agents and why you need one for your corporation or LLC.



What Is a Registered Agent?

A registered agent is a responsible third-party who is registered in the same state in which a business entity was established and who is designated to receive service of process notices, correspondence from the Secretary of State, and other official government notifications, usually tax forms and notice of lawsuits, on behalf of the corporation or LLC.

If you do not have a physical location in the state in which your business is registered, you must designate a registered agent to accept documents on your behalf. The state in which your business is registered needs to know it has a contact person for your business within the state at all times; accordingly, PO boxes are not acceptable addresses for registered agents.

What Does a Registered Agent Do?

A registered agent accepts tax and legal documents on behalf of your business, making sure you don't miss important information regarding tax payments, lawsuits, or judgments involving your business; a registered agent may or may not have a role in the operation of the business itself.

Can You Be Your Own Registered Agent?

While it is usually legally possible to serve as your own registered agent, it is advisable to designate a third-party to perform this important role.

By having someone else responsible for the receipt of tax and legal documents, you can have the peace of mind that someone will always be available to claim such important information, which means you can leave the office freely, go on vacation, etc., without having to worry about missing any deliveries.

What Are the Benefits of Having a Registered Agent?

Besides not worrying about missing important documents, having a registered agent also means that you will not have to accept potentially embarrassing legal and tax documents in front of clients. Another advantage is that, as your registered agent's address will remain the same, you can easily change your business location without necessarily having to file more paperwork to change your address with the state for each and every move.

What If I Don't Designate a Registered Agent?

A business that does not designate a registered agent may risk falling out of "good standing" with the state in which it is registered. Penalties can include license revocation, fines, and the inability to enter into legal contracts and/or gain access to the state court system. Moreover, reinstatement proceedings could include further monetary, civil, and possibly criminal sanctions as well.

If you're ready to designate a registered agent, check out LegalZoom's affordable Registered Agent Service, available in all 50 states.