by Deborah Sweeney | Featured Contributor
Starting a business involves making a lot of choices, and with those choices comes the opportunity to do plenty of research. You have to choose the right entity to file your business as, you need to become an expert on small business taxes, and you need to weigh your options when it comes to hiring a registered agent service or being your own registered agent. Consider this your registered agent (or RA) research.
First of all, what is a Registered Agent?
A registered agent is an “agent” of your corporation or LLC. You’re supposed to officially designate this agent at the time of your incorporation or LLC registration in accordance with state requirements. The main role of a registered agent is to act as the representative for accepting Service of Process, and to forward any and all official legal and tax correspondence from the state to you, the business owner. They receive business and legal documents from county, state, and U.S. agencies. These documents include such things as notice of litigation (as mentioned above) franchise tax forms and annual report forms. Basically, a registered agent is an individual or entity who receives documents relating to the corporation. In most cases, having a registered agent, whether you act as your own or hire a service, is mandatory.
Why exactly do you need one?
Once a business is formed on the state level, most jurisdictions require corporations or Limited Liability Companies to designate a registered agent to receive documentation on behalf of the company. You also need one to remain in compliance with state law. If you don’t register and designate an agent your company: can’t legally enter into contracts and gain access to the state court system, is subject to monetary, civil, and possible criminal sanctions, and/or cause your jurisdiction to revoke a business’s corporate or LLC legal status.
Registered Agent Conditions
Your RA must have a physical street address in the state your company is formed. This means no P.O. Boxes. Additionally, the RA must be available during regular business hours to receive service of process. Their name and address needs to be listed on the formation documents of the business and that information is kept on record as the official contact for the company. In fact, registered agent information is considered a matter of public record.
A small business owner can definitely act as their own registered agent, just be sure to understand all that that entails, like needing to stay open during standard business hours. You get to save some money and not deal with a third party service, but make sure you’re keeping everything compliant or you stand the risk of falling out of good standing.
You can also hire an outside service to act as your registered agent. Many business owners like this option because it gives them a sense of privacy. Were they to ever be served, the mail wouldn’t be delivered directly to them; it would be delivered to their registered agent. This way, if a document must be served to your company, it will be served to the independent third party, as opposed to serving you with legal and/or personal business documents in the presence of customers, clients, vendors, employees, and neighbors.
Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA
As CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.
Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites. She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.
In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.