When setting up your corporation or limited liability company (LLC) or other business entity with your state, one question you might encounter in the paperwork is, “Who is your registered agent?”

If you’re thinking, “Wtf is that?” and “Do I need one?” let’s answer that question.

What is a registered agent?

A registered agent (RA), also known as a resident agent or statutory agent, is a person or company designated by a business entity to receive legal documents and official government communications on its behalf.

If the government or a court official needs to send you any official communications, it sends them to your RA, who ensures they get to you.

Think of them as reliable postal workers, but they handle essential paperwork instead of junk mail.

What kinds of documents will your RA receive?

The main function of a registered agent is to receive service of process—a document that notifies you that a lawsuit has been filed against you or your business entity.

Other time-sensitive documents your registered agent might receive include:

• Notice of wage garnishments for employees
• Legal summonses, motions, or requests to produce documents
• Correspondence from the state government
• Compliance-related documents

Who needs a registered agent?

Any business that registers with the state needs to appoint a registered agent. So if you have a sole proprietorship or general partnership, you won’t need one. But if you register your business as a corporation, LLC, limited partnership (LP), or limited liability partnership (LLP), designating an RA will be part of the registration process.

Do you need a registered agent?

In short, yes. If you register your business with the state, you will likely be required to identify a registered agent. The real question is, do you need to hire a third party—either an individual or a service—to act as your registered agent?

Not necessarily. 

You can list yourself, a business partner, a friend, or an employee as the RA for your business as long as whoever you name meets the state’s requirements. While requirements vary from state to state, your registered agent usually has to:

• Be at least 18 years old. Minors cannot serve as registered agents.
• Have a physical address in the same state as your business. You can’t be the registered agent for your business if you’re located in another state, and you can’t use a PO Box. If you have an LLC in multiple states, each state will require you to have a registered agent with a physical address in that state.
• Be physically present during standard business hours. They must be available during standard business hours to receive documents—usually from 9 am to 5 pm Monday through Friday.

However, there are some reasons you might want to hire a registered agent service. This might be your best option if:

• You’re registering to do business in another state. Most states require your RA to have a physical address in the state. If you want to do business in another state but don’t have a permanent location there, hiring a registered agent can help you comply with the requirements.
• You’re not available during business hours. Maybe you travel a lot for work, keep odd hours, or are a digital nomad who works from anywhere with a laptop and a Wi-Fi connection. Hiring a registered agent service ensures someone is available during normal business hours to receive important legal notices, tax documents, and other official government correspondence.
• Privacy and discretion. Once you form an LLC and designate a registered agent (which may be you), it’s a matter of public record. Anyone can search your state’s business entity database and find out who holds the role of RA for your business, so you might want one for privacy reasons—especially if you work from a home office. You also might simply prefer not to have legal papers served at your place of business (because, let’s face it, it’s not the best look in front of clients), a professional service provides a separate address for these documents.

Registered agent services typically charge an annual fee ranging from $150 to $300.

This might seem like an unnecessary expense if you’re just launching your business, but using a service means you won’t have to change your RA any time there’s a staffing change in your business.

Also, a registered agent service knows what to do with the documents they receive on your behalf and likely has a process for handling them quickly. You probably don’t have to worry about a service of process getting lost in their inbox or completely disregarded.

Can you change your registered agent?

If you initially appointed yourself or an employee as a registered agent but want to change it to a professional service, it’s usually a pretty simple change. Most states provide a change form you can download or complete online. You may have to pay a small fee—usually around $25 to $50.

It’s easy to overlook updating your RA information—especially if you initially appointed an employee who’s no longer with the company. But this is an important role, so review it regularly and make updates when needed.

Stay on top of your regulatory requirements

For some small businesses, hiring a third-party registered agent doesn’t really make sense. This might be the case for you if you have an office or storefront, keep regular business hours, only operate in your home states, and aren’t concerned about privacy.

However, if any of the above reasons for hiring a professional service strike a chord with you, getting someone outside your company to handle that responsibility can ensure your business stays on top of its legal obligations.

If you need help deciding, please reach out.