You know how to run your business, you know how to handle your products, services, vendors, and employees. But do you understand the compliance side of your business? Typically, if you aren’t dealing with compliance needs on a routine basis, you have a lot of questions regarding registered agents. This article looks at six common concerns business owners have regarding registered agents and registered agent services.
What is a registered agent?
A registered agent, also known as a resident agent or statutory agent is responsible for accepting service of process of legal documents and renewal documentation and reminders for your business entity. This means they must be available during normal business hours, five days a week, 52 weeks a year. This also must be trustworthy because there are often fines, fees, and other sanctions for non-compliance.
Why do I need a registered agent?
Once you formed your business you created an entity that can be named as a party to a lawsuit. Because you no longer represent your company directly and most states do not allow you to accept service of process in a lawsuit, you need to hire a registered agent. There are a few states that will allow you to act as your own registered agent, but it is a best practice to put those responsibilities in the hands of experienced and qualified individuals or services. The registered agent will handle all the compliance needs with regard to accepting service of process, business entity renewal documentation, and notification to you of receipt of these papers all while keeping the nature of the business confidential and stopping the rumor mill that will happen if law enforcement officials show up at your place of business to service process of legal documents.
What are the benefits of using a registered agent service?
There are several advantages to using a registered agent service. First, they meet the availability requirements listed in paragraph one above. Second, they act as an extension of your compliance department with complete discretion. Third, they have offices in all states, so they are ready and available when you expand your business across state lines.
When do I need to get a registered agent? Every business is required to name a registered agent at the time of their business formation. It is recommended that you enlist a registered agent service during the initial stages of forming your business entity. If you missed this step an experienced registered agent service can assist you in filing the appropriate paperwork and fees to ensure you are compliance with state laws.
What are the consequences of not designating or maintaining a registered agent?
Failure to comply with the requirements that your business entity designate and maintain a registered agent in every state in which you do business could result in losing your good standing status and incurring penalties that may include additional fees and fines for non-compliance.
Why do I need a registered agent outside of my home state?
All states require that you designate a registered agent within every state in which you do business. Further, most states require that your registered agent have a physical location within the state. For example, if you have a business located in New York and you expand to open a second location in New Jersey (in this example, New Jersey would be considered a foreign business entity); you would be required to designate a registered agent with a physical location in New York and a registered agent with a physical location in New Jersey.
It is a best practice recommendation that you use a registered agent service to satisfy all of your registered agent needs whether those needs are in one state, fifty states, or somewhere in between.
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