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BizReport : Law & Regulation : May 30, 2019

Taking The Confusion Out Of Getting A Registered Agent

Managing an online business can be less expensive than maintaining a brick-and-mortar location. However, running a business online doesn't mean you can skip the rules established by the state and federal government.

by BizReport

For example, you still need to pay taxes, file for trademark protection, protect your assets by forming an official entity, and have a Registered Agent available during standard business hours.

Whether you form an LLC or a corporation online, you need a registered agent to keep your business in good standing with the state. Registered Agents are also called Statutory Agents, Resident Agents, and Agents for Service of Process. Not having a Registered Agent can have dire consequences for you and your business. Before getting into those consequences, let's look at the reason Registered Agents exist.

What a Registered Agent Does

A Registered Agent's primary duty is to receive official correspondence on behalf of your business. This correspondence can include official letters from the Secretary of State or government agencies, process notices if your business is sued and you need to appear in court, and tax forms.

Every legal entity needs a Registered Agent

According to Incfile's guide on Registered Agents, all businesses formed as legal entities are required to have a Registered Agent. The guide will also tell you what you need to know about, including the requirements a Registered Agent must meet, and the specific duties they're expected to perform.

If you live in the state where you do business, you can be the Registered Agent for your business, provided you have a street address and you're an official resident in that state.

Although many people choose to take on the duties of a Registered Agent, there are reasons not to. For example, you'll get a load of legal documents like franchise tax forms, annual reports, renewal reminders, and documents from the state. If you're not an organized person, and you easily lose track of paperwork, it's best to hire someone else for the job.

Consequences for not having a Registered Agent can ruin your business

There are consequences for not having a Registered Agent. When someone files a lawsuit against a business, they serve the Registered Agent with a notice to appear in court. If you don't have a Registered Agent, you won't get that notice. Not showing up to court can result in a default judgment against you.

Despite advice on the internet, not all state laws require that a defendant actually receive the notice to show up in court. In Georgia, for example, a process server attempted to serve a limited partnership (LP) through its Registered Agent, who happened to be the company's lawyer. The address listed with the Secretary of State was only a mail handling office, and the Registered Agent wasn't available to receive correspondence. A default judgment was issued against the LP.

Another potential problem is that you could have your business dissolved for failure to file required correspondence with the state. If you don't have anyone to receive notifications from the state, and you're unaware of paperwork you need to file, you could miss important deadlines.

The Registered Agent you choose matters

Appointing a Registered Agent isn't a casual decision. Think twice before calling up a friend to ask if they'll be your Registered Agent. Your Agent must be available in person during standard business hours. You can't rely on a friend to make that kind of commitment, even when they say otherwise. They might be home all day now, but in three months they might have a full-time job.

The best way to protect your business is to hire a professional company to handle your correspondence. It's what they're trained to do, and they do it well.

If you've signed on to be the Registered Agent for your business, it won't be long before you discover how difficult it can be. If you don't work regular business hours from a physical office (or your home), you're risking your business.

Hiring a Registered Agent is part of doing business

Consider the cost of hiring a professional Registered Agent part of doing business. You already have to pay for things like computer equipment, contractors, employees, internet, software, and other services. Add hiring a professional Registered Agent to that list, and make sure you don't miss any official correspondence that requires a timely response.


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