What is a Registered Agent?
A registered agent is a business’ means of receiving official communications. Each state requires business entities to appoint a registered agent so that the business has a reliable point of contact. When a business is sued, service of process (notice of a lawsuit) is sent to a business’ registered agent. That way a business owner cannot hide from a lawsuit and a lawsuit cannot commence without the business owner having been notified. Also, when the state sends annual report reminders, tax notices, and other official mail, that mail is sent to the business’ registered agent.
Why Businesses Need Registered Agents
Pretend that a someone walking past a business on a snowy day slips and falls outside that business and decides to sue. When the lawsuit is formalized, the person who slips goes to court and wins a default judgement against the business because the business was never notified that it had been sued. That’s what life would be like without registered agents.
Since business entities like LLCs and corporations essentially have all the rights of an individual, but no ability to communicate because they are inanimate beings, it is the registered agent’s job to ensure all communications are received and delivered appropriately. To further illustrate the point, imagine you need to deliver a message to a rock. The rock cannot talk, acknowledge, accept, or sign for any communication. How do you deliver the message to the rock? Hopefully a person has been appointed as the rock’s registered agent. The registered agent can talk, acknowledge, accept, and sign for all communications on behalf of the rock, just like they do for LLCs and corporations.
Registered Agent Requirements
Although each state has its own statutory requirements, without exception, registered agents everywhere, whether they are a business or an individual, must meet the following requirements
- If the registered agent is an individual, they must be at least 18 years old.
- Registered agents must be able to physically receive and sign for service of process and other official documents at a physical location, commonly referred to as their registered office. This means that registered agents must have real addresses, not just a P.O. box or virtual address.
- A registered agent must be a legal resident or authorized to do business in the state where they have been appointed to serve as a business’ point of contact. This means that if a business operates in all 50 states, they must have a registered agent physically located in each state.
- The registered agent must have a registered office in the state where they have been appointed.
- The registered agent must be available to accept service of process and other notices at their registered office during normal business hours (9am to 5pm).
- A registered agent must also be responsible for tracking and forwarding the documents they receive to a business’ official communications contact (typically the business owners).
Registered Agent Advantages
Most small business owners will serve as their own registered agents, however, there are some scenarios in which this doesn’t make sense or will complicate a business. For the following reasons, hiring a registered agent will benefit a business.
Registered agent services typically cost somewhere between $100 and $300 per year. For some businesses, this fee is easily paid for as business owners don’t have to worry about tracking additional paperwork. A professional registered agent service should have an electronic notification system that tracks and notifies in place to track and notify a business whenever annual reports are due and whenever they accept any mail or notice on behalf of a business they represent.
One of the added benefits of hiring a registered agent service is that some professional registered agents will let business owners list their address on the business’ formation documents. That allows a business owner to keep their address and personal information off public record. This provides added security from would be hackers of state databases, junk mail, and solicitors. If a business owner lists themselves as their own registered agent, likely they’ll be required to list their home or business address, which could be embarrassing if the business gets sued and the local sheriff is who gives notice (happens more than you might think).
Companies without a Physical Address
If a company is strictly online without a physical office, hiring a registered agent provides a business with a reliable location where service of process and official mail can be delivered. However, for online companies that receive a lot of everyday mail, they may need to hire a mail forwarding service in addition to a registered agent.
Atypical Business Hours
Registered agents must be available to accept official notices and service of process during normal business hours. If a company doesn’t have regular hours or the business owner is out of the office a lot, they may need to hire a registered agent.
Doing Business in Multiple States
Registered agents are required in each state where a company is authorized to do business. If a business owner serves as their own registered agent in their home state and then expands to do business elsewhere, they will need to hire the services of a registered agent in the new state, as registered agents must have a physical address where they can accept and receive service of process.
If you are doing business in Montana and need a registered agent here, we offer Montana registered agent service for $60 a year. We’ve also met some good neighbors to our south, if you need a registered agent in Wyoming. If you are seeking registered agent service elsewhere, please contact Northwest Registered Agent for assistance,.