A Quick Overview of Registered Agents

A registered agent is someone designated by a business to receive official legal documents. Under most states’ laws, the registered agent (“RA”) must have a street address in the same state where they are registered. Every LLC, corporation, and limited partnership that was formed in a particular state does business in that state is required to have a registered agent. 

Common legal documents that the RA may receive include things like:

• Lawsuit paperwork
• Subpoenas
• Legal notices from the state entities or taxing authorities

If a company does not have an RA, then it cannot file or defend a lawsuit in a particular state. Those businesses are also subject to fines that could be as much as $500 per year (or more in some situations).

A registered agent is required to be available during normal business hours to accept service as necessary.

Designating Your Registered Agent

You have a couple of options when deciding who should be your registered agent. In most situations, small business owners will choose to be their own registered agent. You simply have to meet the following qualifications to serve as a registered agent.

1. You are over the age of 18
2. You are a resident in the state where you want to serve as an RA
3. You have a physical address (no PO Boxes) located in the state that is the same as the business address
4. You are available during business hours to accept service of process

You also have the option to hire a company that can serve as your registered agent. There is a fee for this service that varies a great deal. Some agents will only charge an annual fee of under $100, but others may be significantly more.

For most business owners, hiring someone else is not necessary, and it is certainly the most cost-effective option to be your own registered agent if possible. However, if you live out of state or you want to ensure that someone is always available during regular business hours, designating a company as your agent may make a lot of sense.

Some small business owners who work out of their homes also prefer that their home address not be listed with state authorities because they do not want service of documents to occur in front of family members, children, or neighbors. They may also be concerned about the embarrassment of having legal papers served while they are with a client.

How to Designate Your Registered Agent

Registered agents are required to file a statement with the Department of State, Secretary of State, or other state authority. That statement can be part of your original formation documents, however. If you are a sole proprietorship, you will not need to file other formation documents, so designating a registered agent may be the only formal paperwork that you file in your state. 

If you need to change the registered agent, you can also file a separate form to do that. You should also update the registered agent information if your agent moves or changes their name, too. Some entities can also change their registered agent as part of their annual report.

Keep in mind that changing a registered agent is only allowed if the Board of Directors (if you are a corporation) permits it. That means that you will need a corporate resolution to change the agent if you have a corporation or other similar legal entity.

Setting Up Your Registered Agent

Because many states’ laws require that you have a registered agent, most businesses will include this information in their initial formation documents. However, you can change your registered agent whenever you would like. You simply have to fill out the required documents and forms to make this type of change.