What Is a Registered Agent?
A registered agent receives important legal and tax documents on behalf of a business—corporation or LLC. They also can receive services of process (SOP) when a business entity is a party in a legal action, like a lawsuit or summons. A registered agent may also receive paperwork from the state for the yearly renewal of the business's charter. Either a member of the company or a third party (like a lawyer or service company) can act as a registered agent.
Why Do Small Businesses Need a Registered Agent?
Owning your own small business is a 24/7 job. You work during the day, think about work at night, and probably even wake up mid-slumber to jot down a great new idea to improve your processes.
The point is, when you’re a business owner, you’re always working, even if you aren’t at work.
But what happens if you or your business is served a summons, a lawsuit, or official state documents and you’re not in? U.S. business law dictates that you must, at all times, have a registered agent available to receive these documents during normal business hours. This agent—which can be a business or individual—must be on hand to receive and sign for those documents. The idea is to make sure these processes (such as the receipt of tax documents or notice of a lawsuit) are as smooth as possible and to keep people from claiming the information got “lost in the mail.”
That’s why every business needs a registered agent. It’s also why many businesses—especially single-owner companies and smaller entities—often select a registered agent not on their premises.
After all, as hard as you work, you need a vacation now and again. Even if you’re too busy for that, you're going to have to head out and see clients or go to off-site meetings. A registered agent at another location will receive your paperwork for you and then make sure you receive them.
It might seem like a small role, but finding a reliable, professional registered agent is one of the smartest things you can do. Consider the following:
Say one of your products injures someone and they're feeling litigious, so they sue. Say you never receive the paperwork, either because you’ve been out on business or your registered agent is sloppy. Since you never received the paperwork to appear in court, you have no way of knowing that the case is happening, fail to appear, and lose a default judgement, all because of a simple oversight.
No one wants that to happen.
That's why you need a professional registered agent or someone you work with that you trust. Remember, this person or entity must be available to receive paperwork in person, so the address you give your state cannot be a P.O. Box. State law varies, but it's generally a good idea to choose a registered agent in the state in which you incorporated.
If you’re incorporating with Rocket Lawyer, we can help you find a registered agent and help you decide if you should serve as your own. Choosing one is a small but important step in forming a legitimate, legal business.
What Is Service of Process and How Will It Affect my Business?
Service is the delivery of legal documents, such as mail, fax, email, or personal delivery. Process refers to legal documents such as a lawsuit, asummons or complaint, wage garnishments, subpoenas for records, and official state correspondence. You are required to have a registered address with the state where you will receive service of process.
If you do not respond to certain Service of Process, you may have your company suspended or terminated. Also, if your company does not respond a to a legal notice such as lawsuit, you may get a default judgment instead of appropriate relief.
Can I Be my Own Registered Agent? You can, but you must be available during normal business hours. You also have to have an address located in the state where your business is registered and any states where the company is doing business. Your name and address must also be listed in public records.
Will I Fall Out of Good Standing with the State if I Do Not Have a Registered Agent?
If you don't maintain a registered agent you may be prohibited from doing business within that state. You may also be subject to monetary penalties.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.