Registered Agent – Legal News Update


What is a Registered Agent

A Registered Agent is often called a “Resident Agent”, “Statutory Agent”, or “Agent for Service of Process” depending on the state you are forming your entity in. A registered agent can be any adult who lives in the state your business entity is formed, or it can be a registered corporate agent that agrees to be your agent to accept service of process in case your business is sued.  The registered agent’s address may also be where the state will send the paperwork for the yearly renewal of the business entity’s compliance paperwork.  Putting the wrong person or business as your registered agent can have a negative impact on your business.

In most all cases, the registered agent for a business entity is assigned in the formation documents filed in the state where and when your entity is originally created. For example, a person forming a corporation in the State of Nevada or Delaware, would designate the registered agent along with the agent’s address on the articles of incorporation filed with the Nevada Secretary of State or Delaware Secretary of State respectively. If the agent cannot sign the articles to be filed, some states such as Nevada provide that the registered agent may be designated using a separate “Registered Agent Acceptance” form with the appropriate acceptance and signature. A representative of the business or the individual accepting responsibility as registered agent must sign this form or similar form to accept the responsibility of acting as agent.

What does a Registered Agent do

Businesses in today’s environment are either individuals doing business under their name or some fictitious name like a DBA.  This individuals running business this was are also known as sole proprietors, but other people run their business as some form of entity like a corporation or a limited liability company (LLC) in order to get more liability protections and tax advantages.

When a business entity is chosen as your business almost all states require that the entity designate and maintain an agent for service of process, registered agent, or statutory agent.  The purpose of this registered agent to provide a physical address, not a P.O. Box, in the state where your entity is formed and where someone is available during regular business hours to be able to receive a copy of any summons or complaint in a legal proceeding against your business.  Since a registered agent receives legal documents, we recommend that your registered agent is a knowledgeable attorney or law firm.  After all, wouldn’t you want legal documents to be reviewed first by an attorney to verify if the issue is really serious or not?  However, there are plenty of capable third parties that can act as your registered agent.

Generally speaking, a registered agent also receives legal and tax documents from the state government.

Normally a registered agent will forward these documents, notices and/or lawsuits to the business directly.  Information about persons or entities that may be willing to act as registered agents by state is usually maintained by the respective Secretary of State. Most states offer free access to their databases to find a business entity’s registered agent. A legitimate registered agent can help protect your personal information from appearing on the internet (like on the Secretary of State database). Some registered agents will put their address on your corporate documents instead of your personal details leaving you with an added layer of privacy protection.

Failure to maintain a registered agent may cause the state to revoke your corporate or LLC status, and in some cases assess penalties and fees against your business.

Who can be a registered agent

In some states you are allowed to serve as your own registered agent; however it is highly advised against doing so for all the reasons listed in the 5 Typical Functions of a Registered Agent below. Even if you do have a working office that is available to accept service of process during business hours, do you really want to be served in front of your employees and customers? That’s not exactly the situation where you will want to have to explain yourself to your employees. It is, however, recommended that you hire a registered corporate agent, preferably a law firm registered with the secretary of state to be your registered agent.

Advantages of having a Law Firm as your registered agent

For roughly $2 per week, you can enjoy the security and confidence of knowing a professional registered agent is protecting you and advising you of compliance dates. If your business is worth protecting then you should protect it with the services of a professional registered agent.

5 Typical Functions of a Registered Agent and the benefits of a Law Firm as your agent:

  1. MAIL FORWARDING. Normally a registered agent will forward these documents, notices and/or lawsuits to the business directly.  In other words the registered agent acts as an intermediary merely forwarding documents to your business. So the only real purpose here is have an address and name other than yours on public records.  With your consent a law firm acting as your registered agent may also act as your attorney of record.  This means that if a legal document is served on the law firm, acting as your registered agent, the document can be opened and analyzed by a legal professional and help you understand the pros and cons related to that document. The law firm can help put you at ease before you ever receive a lawsuit by explaining to you in detail what the papers are that will be forwarded to you, and help you understand your rights in the matter.  This way you are not shocked or upset about being sued and spending hours and days trying to figure out what you have to do next.
  2. MUST BE IN OFFICE AT ALL TIMES. A registered must be available during regular business hours in order to be able to receive a copy of any summons or complaint in a legal proceeding against your business. This means that because your lawsuit can be serviced at any time from 8am to 5pm, Monday through Friday your registered agent should be available during, at minimum, those days and times.  So if your business is a one man shop and that one man designated as the registered agent decides to step out for some lunch, or use the restroom, who will be there to sign for your lawsuit? Obviously, not receiving your lawsuit is not a good thing. If your registered agent or other appropriate person is not able to be served, you could probably lose the lawsuit by default and have a substantial judgment against your business without your knowledge. Generally speaking a law firm is open during regular business hours and by designating a law firm to be your registered agent you can have the freedom to travel and even leave the office for lunch without worrying about whether or not you are violating this particular rule.
  3. PRIVCAY PROTECTION. The state most often publishes the names and addresses of the registered agent. This means that you and your home or business address may be listed publicly on the secretary of state website for anyone looking to sue you. Therefore one benefit of having someone other than yourself as your registered agent is that the registered agent will often use their address as the officer/directors and member/managers addresses. This offers an added layer of privacy by preventing unscrupulous attorneys from properly identifying the individuals behind the company in an effort to attach them to the lawsuit. In some cases, the attorney trying to sue you may stop his probing here, especially if they see another law firm representing your interest as your registered agent. Having a law firm for this added layer of protection, in some cases, is much more powerful than you think.
  4. COMPLIANCE WITH LAWS. Running a business comes with a host of responsibilities and legal formalities to keep your business in compliance with the state so that your business is not forfeited, suspended or in some other manner revoked by the state. The law firm as your registered agent is familiar with the laws and annual filings to keep your corporation or LLC in compliance with the state and keep your business active.
  5. DOCUMENT STORAGE. With the growth of your business and the length of time your business will be around will also be the growth of the amount of state documents and other papers related to your business.  A law firm as your registered agent will keep and store copies of these documents on hand in case you need them for any reason in the future.  You may even be able to access your documents online via the law firm’s online server or software.

Lawyers are very familiar with the proper way to structure business entities and how to protect them. Many businesses have no idea the amount of power they have with a law firm as their registered agent.  At the time of writing this article the fee for registered agent with Legal Solutions 2 U is only $119.00 for the year.  In other words for less than $10 per month you can have an attorney at your finger tips as your registered agent. A lawyer will look at the complete situation, and can then advise you on the different circumstances that are suitable for your situation. Laws are there to help people, know how to use them properly. In fact, a law firm at your finger tips for an affordable price can actually help a person get protection in a more effective and efficient way.

For a free consultation regarding any issue that you might have, call Legal Solutions 2 U today at 855 – 77 LAW 2 U (855-775-2928)