Every business is required to appoint a registered agent to receive notices of a lawsuit (aka service of process) and other legal and tax notices. Whether you already own a business or you’re just starting, you need to understand why a registered agent is necessary and how it can safeguard your business.
Selecting just any registered agent to meet the bare necessities of registering the business can have serious consequences. Here are five reasons why your business needs a reliable registered agent.
Meet State Requirements as Your Business Grows
When you file articles of incorporation or articles of organization to form your business entity, you will be required to designate a registered agent. Without listing an agent that resides in that state (and consents to the appointment), the secretary of state will reject your filing until you do.
Registered agents are state-by-state appointments. As your business grows, you will need to list an agent that maintains a physical address in each one. Many registered agent service companies offer nationwide representation, meaning you don’t have to find and manage individuals or separate vendors.
Regardless of who or what company you appoint, plan to meet the requirement before you file to avoid costly delays.
Ensure Documents Are Reliably Delivered
The registered agent’s primary job is to receive legal notices and forward them to you. In the event of legal proceedings, response time matters.
Some registered agent companies might lack the technology or infrastructure to deliver documents electronically. Some might mail the documents to you, or worse, forward them to another office for central processing.
A reliable agent will also understand and embrace their role. For example, when a process server knocks on their door, they know how to sign for the papers and immediately work on getting the documents to you. On the other hand, will an individual have the same level of training and know what to do in the same situation?
Consider, too, that individuals have busy personal and professional schedules. It’s infrequent—if not impossible—that the average person will truly be available to receive documents during standard business hours, every working day of the year!
Protect Your Business’s Good Standing
In addition to receiving documents, your business’s registered agent can be a reliable compliance partner. For example, most states require business entities to file an annual report each year, but not every state sends these reminders. Instead, they rely on the business to track their own deadlines and file on time.
When choosing a registered agent, find one that helps protect your business’s good standing. An ideal agent will provide notices of deadlines even when state agencies do not. The agent might even offer filing services to take care of managing annual reports and other corporate filings.
As your business grows, the right registered agent will grow with you, offering a solution every step of the way.
Protect Your Privacy
The registered agent is your business’s point of contact with process servers, state agencies, and the court system. As a result, the agent’s information is readily available in public records. Anyone seeking to contact you is likely to do so via the name and address they find. Of course, this also means competitors and scam artists,can look up your business as efficiently as legitimate stakeholders.
Many businesses designate an individual, such as an owner or employee, as their agent to reduce costs. At the same time, they might list the business’s actual address or even the person’s home address.
As a business owner, would you feel comfortable with your personal information publicly tied to your company? Most likely, the answer is “no.”
By appointing a registered agent provider, the business lists that company’s information, not its own. Regardless of where the business registers, this adds a degree of privacy and security.
Maintain a Professional Image
If you’re like most business owners, you care deeply about your company’s reputation. The registered agent you choose can help uphold your professional (and even personal) image.
Take the above example once more. Imagine receiving a lawsuit in your physical place of business, in front of your employees and clients. Perhaps your home address is listed in state records, and you receive that lawsuit at home in front of your family, children, or guests.
Registered agent service companies are known for receiving and forwarding documents discreetly. They save you the potential embarrassment of receiving a lawsuit in front of your most important stakeholders—and that can make all the difference in your company’s long-term success.
Harbor Compliance does not provide tax, financial, or legal advice. The use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review the information you provide to us for legal accuracy or sufficiency.
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