Monday, June 15, 2015

What Is a Registered Agent for a Corporation/LLC?

Almost all corporations and LLCs are required to have a registered agent in the state where the company is formed or doing business.
A registered agent is formally known as a "registered agent for service of process" and may also be known as a resident agent, statutory agent, or agent of record. The registered agent receives important legal, tax, and corporate compliance documents for the company. The following is a list of some documents that gets sent to the agent:
  • Tax-related documents from the IRS, the Franchise Tax Board, and other government tax entities.
  • Normal corporate filing documents, such as reminders for filing the statement of information and other information sent by the secretary of state.
  • Notice-of-litigation mail (mail that initiates lawsuits) and legal documents when others want to formally contact you or send you notice.
Keeping accurate corporate records with the state is important. You may not get the full benefit that a corporation or LLC offers if information is not kept up to date. Failure to comply may result in fines and possible loss of good standing with the state.

Who Can Be Your Registered Agent?

There are certain restrictions and conditions to becoming a registered agent for your business. In general, an individual or business can become your agent if the following requirements are met:
  • An agent must physically reside in the state. This can be a residential home or office.
  • The agent’s address must be a physical street address. PO boxes are not allowed.
  • The agent must be available during normal business hours to receive important state and legal documents.
  • A business cannot be its own agent. However, an officer, owner, director, or manager of a business can be the agent for the business. A physical address different from the business address is required.
  • The individual’s name and address is required if the agent is a person.
  • If the agent is a business, it must be a corporation and be certified with the state. In this case, usually the corporation name or some record ID is required to identify the business as your agent when you file.

How Private is Your Business Record?

A registered agent’s address is public record and can be viewed by anyone. Some states include the company’s legal address, while others only show the agent’s address. This means that anyone can search and find the address to contact you, including marketers.

Caution – Don’t Get Confused!

There are many businesses that use your public contact information to send you mail encouraging you to pay a handsome amount of money to file the annual statement of information on your behalf. Frequently, they use a professional corporate seal on the envelope and use terms such as “Corporate Compliance Department” to make their mail look like a legal document.
Many people get confused and assume that the mail is a legal document from the government, which it is not. By law, these businesses must disclose that they are not a government entity. So make sure to read the letter in detail.
Filing a statement of information is a simple matter and costs very little: $25 in California. The above-mentioned businesses typically ask $70 or more to do the same job.

How to File a Registered Agent for Your Business

There are a few ways to use or change the registered agent for your business:
  • When you start a new corporation or LLC, you can identify your initial registered agent in your articles of incorporation or articles of organization, respectively.
  • You can change your registered agent on file by filing your statement of information.

Choosing the Right Registered Agent for Your Business

There are many registered agent services with prices ranging from approximately $40 a year to $300 or more. Each agency includes different services in its fees. Consider the following guidelines when choosing a registered agent:
  • If you need to register your company in multiple states, then you should look at national registered agent services.
  • If you only do business in one or two states, then you should look at less expensive agent services within those states.
  • Determine how much mail you think you will receive. Expect to receive extra marketing mail in the beginning if starting a new business. Existing small businesses normally do not receive much mail unless doing something out of the ordinary.
  • Check if your annual fee includes free mail forwarding. Some agents offer unlimited First-Class Mail forwarding (and probably charge $150 or more), while others include very limited mail forwarding for free. Some agents may charge you on a per-use basis. Make sure to find out how much it costs to forward the mail.
  • Some agent services allow you to use their address as your business address, while others may not. Get more information if this is a requirement.
  • Some agent services will not receive personal or normal business mail and may even charge you extra for this. If you are using the service to receive legal and government-related mail only, then you do not need to worry about this.
For corporations and LLCs, registered agent service is essential to maintaining good standing and keep your business running without encountering compliance issues. To find an agent that is right for you, make sure you understand what service you need and then choose the individual or business that fits you

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