What is a Registered Agent and why should i use a Professional
Each state and most countries have their own laws regulating the formation and governing of entities like corporations and Limited Liability Companies (LLCs), but most require that these entities have a presence in their selected jurisdiction – either a registered office or a registered agent.
This is so each company has a local address staffed with a person on whom a summons and/or complaint can be served in connection with any litigation. Official communications such as tax notices and other official communications are also sent to this address.
Failure to have a registered agent can result in loss of “good standing,” which can affect a company’s ability to do business in that state. It can also lead to default judgments and financial penalties costing tens of thousands of dollars.
StartABusiness.com offers a secure, affordable solution for entrepreneurs.
We can serve as your registered agent in all 50 states, the District of Columbia, and most foreign jurisdictions – whether or not we originally formed your company. And we are considerably more cost-effective than other providers offering identical services – but without StartABusiness.com’s expertise, reliability and efficiency.
With StartABusiness.com, you’ll benefit from:
- Professional representation for your company
- A registered office and address as required by most jurisdictions
- Forwarding of Service of Process (SOP) and other official communications within 24 hours so you can react quickly
- Forwarding or furnishing of tax and compliance forms
- An annual Compliance Calendar to help you keep track of critical dates
- Convenient annual invoicing
While companies can appoint any individual to act as registered agent, professionals have the training and expertise to take quick action when served with a summons, make recommendations for further action and recognize unofficial communications and scam solicitations.
There are a number of factors to consider in deciding whether to appoint an individual or a professional registered agent. One of the risks is that an individual may not be at the office location registered with the state when process is delivered. This can result in a couple of problems. One is that in some states an unsuccessful attempt at serving the registered agent allows a court to order “substituted service” such as by serving the Secretary of State, or by posting or publishing the process documents. Substituted service is not as reliable in providing actual notice of litigation as direct service (such as in person delivery or certified mail, return receipt requested). This in turn can result in the company failing to respond in time, which can result in a default judgment.
Another problem with the registered agent not being in the office when the process server or mail carrier arrives is that the documents may be left with another person at the office. This sometimes results in neither the registered agent nor your lawyer receiving notice of the lawsuit in time to respond
Another risk is that an individual may move his or her office, or may leave the company’s employ, be transferred to another state, or for another reason need to be replaced. In those cases the registered agent’s name and/or address on file with the Secretary of State will have to be updated. If there is a gap in time before the records are updated the company may not receive notice of litigation.
Another risk is that an individual registered agent may mishandle or ignore the documents because of a lack of training, or because he or she was busy with his or her own regular work, or was distracted by personal issues.
While the choice of registered agent is ultimately up to the client, companies (especially those who do business in multiple states) should be aware of possible pitfalls if a professional registered agent is not appointed.