What is a Registered Agent, and does every business need one?

Europeans could not travel to the U.S. lately, yet new business registrations are up in the past 12 months – of which many were from European entrepreneurs doing business in the U.S. This is largely thanks to a well functioning system – where Americans keep registering new businesses despite a travel ban. Let’s take a closer look at some of the tools they deploy:

Businesses need an array of specialized support systems to operate smoothly and successfully. Regarding legalities, businesses would need to track and be informed on federal laws, regulations, mandates and guidelines related to the individual industry. This may seem intimidating, but by hiring registered agent services, they would take charge of the business’ legal matters. According to The US Small Business Administration, LLCs in most states in the US must designate a registered agent. An example of one of these states is Florida, where a Florida registered agent is legally required for every formal business in the state.

What are registered agents?

A registered agent is an entity, an individual or business, that accepts tax and legal documents on behalf of a business. They are also commonly known as a resident agent or a statutory agent. The registered agent receives mail on behalf of the business, informs the business of legal notices and sends annual filing report reminders. Other than that, registered service agents offer compliance by keeping the clients business on top of state requirements, they offer a peace of mind to their clients, they offer flexibility allowing the business to choose their business hours to suit them, and they offer privacy by listing their address as the business’ address. Ultimately, the service provider acts as a gatekeeper for businesses.

Does every business need a registered agent?

Businesses such as LLCs, corporations or other formal business entities, require a registered agent. Businesses such as sole proprietorships and general partnerships do not need a registered agent. When filing business formation paperwork with the state, business owners need to name their registered agent, or registered agents if the business has branches in multiple states. If the name or address of the registered agent changes in the future, the business owner has to make sure an additional form is filed to update the state’s records.

Does registered agent’s have to be an entity?

Registered agent services are the common choice seeing that they offer professional services. The actual business cannot be its own registered agent, but the business owner, their spouse or even employees may act as the registered agent for the business. Although the laws vary between states regarding this, there are a few general restrictions about who is able to be a registered agent. Registered agent’s are required to be at least 18 years old and are required to have a street address within the state of the business. The registered agent also has to be physically present at the address during business hours at all times.

Registered Agent Services

Although the business owners, their friend, family member or employee are legally allowed to act as their own registered agent, it is not advised. Not using a registered agent service does save money, but the service offers benefits which makes the service far more capable. Registered agent services offer:

  • Having the business owner or the employee as the registered agent puts the business at risk of embarrassment. Legal action may be served in front of customers, clients and/or co-workers. Additionally, seeing that the registered agent’s address has to be made public, this may present as an issue if the business is based from home or if the registered agent is a family member or friend.
  • If a business lists an individual as their registered agent, they would have to make sure the person’s identity and address details are up to date if any information had to change. They also run the risk of the individual not being at the address at all times due to various reasons. If a business had enlisted a registered agent service provider, they would not have these concerns.
  • Peace of mind. Enlisting a registered agent services will provide reassurance that they are experienced and professional. This will also ensure that important documents end up in the correct places.
  • Each state requires a registered agent. If business owners choose to use individuals as registered agents and if their businesses are based in more than one state, they would need a registered agent in each state. If a registered service agent is enlisted, they will act as the agent in multiple states.

The bottom line

Selecting a registered agent may not seem like the most important step in business formation, but they fulfil an important role in maintaining a business. Even though it is not advised, businesses are allowed to list an individual as their registered agent. But, to ensure a hassle-free journey, businesses are advised to enlist a registered agent service to meet their needs.

FacebookTwitterRedditWhatsAppTelegramLinkedInEmailCopy Link
Go Back
Written by



    Leave a comment

    Your email address will not be published. Required fields are marked *