If you’re planning to start a business or have done so already and would like to look at your alternatives for a business structure, you may have come across LLC as an option. Whether you’ve reached the stage where you’ve prepared your formation papers (or Articles of Organization, as they’re sometimes known), or you’re just getting to grips with the procedures involved, it’s important to know that you’ll need a registered agent to move forward.
What does a registered agent do?
A registered agent for an LLC is somebody who has been designated (by the LLC) to legally receive notice of business-related correspondence, such as government correspondence, service of process notices, and compliance-related documents. Their role is simply to receive and forward any legal documentation related to the LLC they are associated with.
While this may seem like a basic function at best, it’s an element of your LLC that will have serious consequences if it isn’t properly handled. Choosing an individual that can adequately fulfill this role will be important for your business now and in the future, as well as for your own peace of mind. Let’s take a look at why.
Why do I need a registered agent for an LLC?
You may feel that appointing someone to receive your mail is pointless, but as a matter of fact, this individual will be your official point of contact with the state. The state requires a registered agent, and they are asking you to have an official contact on file for your business as you begin and continue to operate.
This is because the state wants to know that you are able to maintain effective corporate compliance, which can manifest in your ability to promptly reply to legal correspondence. Your chosen agent will also need to inform you of legal notices, send annual report filing reminders, and more. Your company’s good standing will be affected by how well you tackle these issues, and both resolve and respond to the legal mail sent your way. Businesses of all sizes need to have a trusted agent in case any of the following items are sent or requested:
- Tax forms
- Official government correspondence (for example, an annual report)
- Legal documents
- Legal summons (Service of Process)
- Notices of a lawsuit
Who can be a registered agent for an LLC?
The great news is that selecting someone to act on your behalf isn’t going to be difficult. As long as the chosen agent is a resident of the state where you register your LLC, you should be fine. They will need an official address where documentation can be mailed, so those with P.O. boxes won’t be eligible.
You or a registered member of your LLC
You may decide to designate yourself or a member of your LLC as your registered agent. While many states will allow this, be aware that agents are always expected to be available to receive the documentation the Government may send.
It may seem like a strange thing to require, but you need to be present at the address you register at during typical business hours since the agent needs to be available to receive correspondence at any given time. This means that the agent is expected to be on-site and not take any significant time away from the address (to go on holiday, for example). Penalties can be quite severe if something is sent by the state and isn’t received.
Friends and family members, or an agent of your own choosing
The agent you select doesn’t have to be associated with your business, or a professional in any capacity. It can simply be someone you trust. There are no legal stipulations, as long as they meet the following requirements:
- The person chosen must be 18 years or older
- The person chosen must have a physical address in the state where the business is formed
- The person chosen must be available in person during normal operating business hours
Third-party registered agent services
With the above in mind, it may be worth your time to look into hiring the services of a registered agent service as your LLC’s representative. Third-party companies consist of professionals, and they will likely have worked with an array of clients, so you’ll be able to rest easy knowing that there will always be someone available to take delivery of all the necessary documents when they arrive. They will also be well-versed in forwarding notices and more, so delays won’t be an issue.
Should I use registered agent services?
If you don’t appoint an agent, your business could be significantly fined, and you could lose the good standing you may previously have had with the state you are registered in. If you change your chosen agent, you must also submit a form to verify doing so. If this information isn’t up to date, the consequences can be severe (you could even lose your business’s ability to enter into contracts or bring forward lawsuits). This can make it especially important to designate someone professional.
The benefits of a registered agent
If you appoint an agent to receive correspondence on your business’s behalf, you can enjoy the following benefits:
- Registered agents give you an unparalleled level of security, so you can keep your focus firmly on simply running your business.
- Important tax and legal documents will be automatically received and either forwarded to you or filed away for safekeeping.
- You’ll be better able to maintain a functional work-life balance, as business and personal mail will be kept separate and dealt with accordingly.
- You will have additional support from your agent, knowing that certain legalities are being kept on top of.
- As your agent’s address will be displayed on the public record and not your personal or company location, you can feel safe that any issues that arise won’t be associated with your business and potentially damage your reputation.
Workhy helps you through all company formation processes
Workhy can be your best asset when establishing an LLC within the United States. We can help you throughout the entire process of starting and running your business, including registered agent services. So don’t hesitate to get in touch with us.