If you have a limited liability company, registration of the LLC is typically handled by your state’s secretary of state.
But if you want to make sure all filings and notifications are done correctly and promptly, it is often wise to retain an experienced resident agent for this purpose.
Here’s what you need to know about operating as a registered agent for an LLC.
What is a Registered Agent?
The term registered agent describes the person or company designated to receive important state and federal documents on behalf of a business.
The person or business entity filing office acting as your registered agent must have an address in the state where your LLC or corporation is registered.
Incorporation documents typically list a registered agent, but it’s often a good idea to double-check and make sure that the address for the registered agent is correct.
Service of Process Definition
Service of Process is the basic step in establishing a valid, legal claim over property or assets. It involves no monetary payment, but it is not typically something a business owner needs to worry about.
But if you have an LLC, and you are using your registered agent to serve the process on your behalf, you need to be careful about who can come onto your business premises and legally make demands against you.
Any individual or business representative who is not the registered agent and serves process against your business will likely be immediately removed from the premises.
Why do I Need a Registered Agent?
A registered agent is used to accept service of process from an individual or company that has a valid legal claim to another party’s assets.
A registered agent may also be used to receive government correspondence that will require action on your part but which are not legally enforceable.
What does a registered agent do?
- Your registered agent will receive all legally required notices from the government on your behalf. You are not required to be present for process service, but it is good to keep track of the date, time, and details of process services.
- Your registered agent will also receive all notifications from your state regarding deadlines for filing necessary formation documents or tax filings.
- Your registered agent will accept delivery of income tax returns that you have either personally filed or that have been filed by an employee in your business.
- Your registered agent will also accept legal process documents that will need your authorization to be signed, such as contracts, deeds, or wills.
- Your registered agent will serve legal and valid court documents against your business at the same time that you deposit the necessary funds into your business bank account.
What documents will your registered agent receive?
Your registered agent will receive notifications of the following:
- Service of process was served on you or your business.
- Notifications of new court actions filed against you or your business.
- Notifications from a government agency regarding deadlines for tax forms, licenses, permits, and more.
- Any other notifications that are required by law to be served on your business.
Your registered agent will also receive all notices and filings that require your personal authorization. Some examples are:
- Contractual documents that require you personally to sign them for them to be valid, such as contracts with a real estate agent.
- A point of Contract that requires you to personally sign them for the contract to legally bind you, such as a contract to buy property.
- Notices of litigation against your business and documents associated with that litigation.
- Notices from the state regarding the business formation of new entities or changes to existing businesses
When to Hire a Registered Agent?
If you’re already doing business in a state where your LLC is registered, you can skip the registration step and simply appoint an agent when you register with the secretary of state.
But if your LLC is not yet registered in your state, or if you want to start a new company, then it’s worth noting that there are specific requirements that must be met before your business may be registered for service of process by an agent.
Registered Agent Requirements
There are several requirements to become a registered agent for an LLC.
- The registered agent must be a person or business currently licensed or qualified to do business in the state where the LLC is registered.
- The registered agent must have a physical home address in the state where your LLC is registered.
- The registered agent must be available at the physical street address and receive mail and all legal documents on behalf of your business.
- The registered agent must be a permanent resident (must not have moved out of state during their residency).
- The registered agent must agree to keep their information updated with the secretary of state’s office, maintaining their physical address, phone, and contact information.
- The registered agent may not be bankrupt or in debt over $1000 to another LLC or business.
- The registered agent must be the full owner of the physical address they are using to accept service of process for your LLC.
Can I be my own Registered Agent?
Yes, but if you are going to be the registered agent for your business, you need to be absolutely certain the address you list will always be a valid business location.
If you have a home-based business, then make sure your state allows this. If not, make sure you have an alternate address that is a physical location where all services of the process will be accepted.
Pros and cons of appointing a Registered agent
- By using a registered agent, you are never required to be present for process service on your business.
- You can appoint someone who is qualified and currently licensed or qualified to do business in your state as registered agents, rather than simply allowing the courts to choose someone themselves. This allows you to exert some limited control over the agent who will be accepting legal documents on behalf of your business.
- Using a registered agent does require maintaining a separate bank account for business deposits and payments.
- If an individual or company is not listed as your registered agent, then your business will be shut down if they receive any legal papers.
- A registered agent is only used to accept service of process on your behalf; it does not mean that you have any legal protection from a lawsuit against you. You can still be sued by someone who is not a party to your business, and he or she may proceed without notifying you.
How much does a professional registered agent cost?
Most registered agents can be hired for a nominal monthly fee.
If you are operating your business from your home, then it is often cheaper and easier to just have someone come by once or twice a week to accept service on your behalf.
If you can afford the extra cost, make it a priority to find an experienced (and reliable) registered agent.
A basic, one-time physical address service for an LLC start-up is typical $50.00. For an additional $20.00, you can also have the registered agent accepted online or by phone call.
More advanced services are available that can include mailing address updates and other remote services not typically offered by the state’s secretary of state site.
Should I use a Registered Agent Service?
Registered Agent services can be a good way to ensure your business is operating in compliance.
Although the service may seem expensive, it is typically worth the peace of mind to know important notices and documents will always be received on time.
If you choose not to use a registered agent, it’s important to remember that in some cases, there is no guarantee that the notice being entered into your business records will actually reach you.
What is a Registered Agent Service?
Registered Agent Service companies sell to a business owner an easy way to make sure they are always in compliance. These companies act as registered agents for your business.
A Registered Agent Service will typically collect fees from your business and then send them to the State of Incorporation on your behalf, making sure you are always in compliance.
Compliance with the Law
All states have regulations on how companies can conduct business and what obligations the business must perform. These regulations are enforced by their Secretary of State or small business administration.
Having a Registered Agent Service will ensure the business is in compliance with these regulations to ensure the business is always operating legally.
Peace of Mind
Having a Registered Agent service will ensure that the business is always operating legally to give peace of mind to those running the business. When there are no problems with the business, it is very easy to relax and focus on running the business.
Having a Registered Agent Service does not require the owner to have an office location. With these services, their office is your office, making it very easy for you to run your business from home as well as anywhere you want.
Having a Registered Agent service does not require employees to come to visit the registered agent. They will send the business legal documents and other notices on your behalf without coming to the registered agent’s location.
What are the fees charged for Registered Agent services?
An LLC start-up’s basic physical address service will typically charge between $50.00 and $100.00 per year. More advanced services can cost thousands of dollars annually.
There are several options for registering your business with a registered agent.
- The secretary of state will send a document to the physical address listed as the business office address. You (the registered agent) or a person responsible for delivering the document will then collect the notice at appointed business hours and place.
- You can apply online to register your physical address. In addition to the fee, you must also submit proof of identity and email address. The state will then send the notice electronically to your email address. The text is not in a readable format until afterward. This allows you to accept service electronically rather than having someone come by on your behalf.
- You can arrange with the secretary of state to accept service by fax. In this case, you will receive the document delivered by postal mail. That letter will be collected at your personal residence and will be available to be served on your behalf as described above.
- If you do not have a landline telephone number, you can arrange for a recorded message to be left on your answering machine, voicemail, or cell phone.
- Most states require that you collect service personally if the registered agent cannot attend in person.
What is the Best Registered Agent Service?
The best Registered Agent Service is one that makes sure you are in compliance with the law. There are lots of Registered Agent Services to choose from, so make sure you review them all before choosing the right one for your business.
ZenBusiness is an LLC registered agent service for $99/year. ZenBusiness will accept and file all documents on your behalf, making sure you are always in compliance with the law.
ZenBusiness provides unlimited LLC formations for one flat fee and guarantees no hidden costs except the annual fee. ZenBusiness offers a satisfaction guarantee of quality work, or they will refund your money.
ZenBusiness provides all your LLC formation needs, including official documents and license to do business forms from the state. ZenBusiness provides all your requirements, which include:
- LLC business name
- LLC owner name
- LLC agent
- address for the physical presence of filing entity (you)
- physical address where service of process can be found at any time.
- State Business License
- State Non-Profit License.
Premium service is only $1,600. Additionally, you can access your LLC registered agent service online by simply signing up on their website.
Further, they also provide excellent customer service and an option to have your LLC registered agent service taken care of by a third party (ZenBusiness does not act as your Registered Agent) for a flat fee of $300/year. You can contact them at [email protected] for a great alternative to registered agent service.
Are there any free registered agent services?
There are not free registered agent services out there. If you are being offered a service for free, then it is an illegal service.
There are some paid services that offer you a 30-day trial or a 1 month free trial period, but after that, you will be paying their monthly fee to stay with the business.
Many companies will offer discounts for paying the annual fee in advance. This could be around 10%-15% off the regular monthly price.
How Do I Change the Registered Agent for My LLC?
There are many reasons you may need to change the registered agent for your LLC.
- You are no longer able to work with your current registered agent.
- You have found a new, much more reliable, and experienced company in your area to handle all of your business needs.
- It is time to switch companies because they no longer offer the services you need or have stopped providing good quality work.
Changing a registered agent is a fairly easy process. If you are a sole owner, then the process is simple and only takes about 30 minutes.
You will need to provide the previous registered agent with a letter stating that you no longer wish to have them be your registered agent, and then file all of your documents with the secretary of state office. Once that is taken care of, you can hire a new company to be your registered agent.
How much does it cost to change my registered agent?
The cost to change your registered agent will depend on the state you are operating in.
In some states, it is completely free to change your registered agent, but in others, you can be charged anywhere from $50.00 to $400.00
What is the difference between a commercial registered agent and a noncommercial registered agent?
Commercial registered agents:
- Typically charge a higher monthly fee and offer more services. You can pay anywhere from $150.00-$200.00/month or more.
- They will offer services like registering your company’s website, filing stock offerings, and other advanced services that noncommercial registered agents do not offer.
Noncommercial registered agents:
- A noncommercial registered agent is a person who resides in the state where the business is registered to provide service of process for an annual fee, usually between $50-200.
- The noncommercial agent must accept all types of legal documents sent to them and can even be arrested if the papers are delivered to them, but they fail to accept them.
- Noncommercial registered agents cannot offer any services other than the service of process agent must supply within the State of incorporation.
Why do states require business entities to have registered agents?
Registered agent services are a requirement for every business to ensure that the company is operating legally.
States have the right to issue and file legal documents on behalf of businesses. States also require all businesses with registered agent services to file annual tax returns and pay annual taxes on an annual basis.
How can I tell if a company is in compliance?
When you are looking for a registered agent service, one of the most important things you should do before hiring them is check them out with the state’s secretary of state office.
Each state has a specific procedure to go through to be able to check out the company. Look for the required address and phone number of the office and contact them immediately. That way, you will be sure that your company is in compliance with all of its regulations.
Are registered agents and virtual offices the same?
Registered agent services and virtual offices are both a form of third-party service for businesses. As the name implies, registered agents are people that are hired to act as representatives for companies and customers.
Virtual office services, like Virtual Office 365, are designed to streamline and provide an easy way for businesses to set up their office without the need to go through the long and complicated paperwork.
- allow small and medium-sized business owners out there to take advantage of many benefits that most larger limited liability companies already have access to.
- include a receptionist, mail and phone forwarding, secretarial assistance, faxing capabilities, and much more.
- virtual offices are great for small business owners that don’t have a lot of money to invest in setting up their business. Many of these services are offered for a fraction of the price of an actual brick-and-mortar office.
Virtual offices do not require any state filings or tax filing obligations. They also do not require a registered agent service for your company.
Are registered agents liable?
Registered agents are not liable for any actions or mistakes that are made on behalf of the business. This means that they cannot be held responsible for your business’s phone calls, whether they answer them or not, or any other forms of contact.
They wouldn’t be responsible for making decisions in regards to the company unless they were consulted and given permission to do so. Most registered agents will have a form that you must fill out to become registered as a representative of the company.
It’s important to remember that registered agents are not your legal representative, and you should always follow proper procedures and speak with professionals when it comes to your legal needs.
In the end, registered agents are just there to help you find business solutions in the simplest of ways. You can do everything on your own, but if all you need is someone to accept legal documents or packages for you, then it’s always best to have a registered agent service on standby.