You probably came across the reference to a Registered Agent while filling out the paperwork for your Limited Liability Company (LLC). Now you’re wondering what is a Registered Agent? What is a registered office and what should I do now?
Well, here at Simply Tax Compliant we’re trying to build a place where new business owners like you…get the answers to those questions.
Let’s get down to the nitty gritty the legal definition…
In United States business law, a registered agent (also known as a resident agent,¹ statutory agent,² or agent for service of process³) is a business or individual designated to receive service of process (SOP) when a business entity is a party in a legal action such as a lawsuit or summons.
Wow, what a mouthful. What it really boils down to is a person who can receive legal documents for your business. See now wasn’t that easy.
Basically, you, as a business owner, need to designate a person within your company to receive documents on your behalf. Now when most people start their business they designate themselves. That’s not always the case.
What do you need to be a Registered Agent?
In most states, the requirements for being a registered agent are pretty simple
You MUST have a street address located in the state where the LLC is formed. For example, if you have your LLC in Texas you can’t use a street address in Alabama.
Your registered agent should be available at the address during normal business hours to receive any documents on behalf of your LLC. Now, this doesn’t mean you are tied to your office. But it’s nice to have a person who can receive documents on your behalf. This is more important if you have more than one location. You know like a headquarters.
Your registered office can be an office or even a virtual address, it can be your home address or a friend or relative you just need to make sure that they can act as a service of process.
A service of process is the place where you designate someone to accept legal documents on your behalf. Don’t get mired down but the minutia. But they have to be able to accept things like complaints, summons, or subpoenas.
Who Can be Your LLC’s Registered Agent?
You have three options for designating your LLC’s Registered Agent.
Option 1: Most commonly you can act as your own LLC’s registered agent. It is free which makes it the best option when you are on a low budget.
Option 2: You can use a family or relative with their name and address designated. A great option if you have family members who you trust to take care of these matters for you.
Option 3: You can hire a commercial Registered Agent, generally for a fee. Make sure you research the service beforehand as some will act as a virtual mailing address and some will not.
How to Choose which option to use for a Registered Agent.
| Options | Criteria | Notes |
| Use Option 1 | Do you have a street address in the state where you are forming the LLC? | |
| Use Option 2 | Do you have a family member or friend who you trust to receive legal papers? | |
| Use Option 3 | If you are forming a second location in another state (aka a Foreign LLC) Then Option 3 is the best way to go. If you don’t want to use your home address then a Registered Agent is the way to go. |
Definition of a Commercial Registered Agent
A Commercial Registered Agent is a company that specializes in receiving Service of Process on behalf of businesses nationwide. They typically charge between $100-300 per year.
Once hired, they will receive Service of Process on behalf of your LLC and then forward it to you by mail at any address you’d like. Most will also fax or email your documents if preferred.
Putting it All Together
Now that you understand that you need to designate a registered agent you can pick which option will work best for your company. Just remember that all 50 states have slightly different criteria so make sure you look up the rules for registered agents in your state.