What is a Registered Agent and When Do I Need One?

Most US states will require that all registered business entities have registered agents, however even if your particular state does not have that as a requirement then you should strongly consider getting one for your business.

 

Who is a registered agent?

A registered agent receives all important tax and legal documents on behalf of your LLC or corporation. Agents can also receive the services of process (SOP); this is when a particular business entity becomes a party to a legal action, like summons or lawsuits.

The registered agent may at times also receive paperwork from the state for the yearly renewal of your corporations or LLC business charter. The only people who can act as a registered agent in a company are:

•    Member of the company

•    Third party (Service Company or Lawyer)

 

When would I need a Registered Agent?

Every entrepreneur knows that owning a business is a full-time job. The main point here is that when you are a business owner, you are always working, even when you sleep at night, you are constantly thinking of ways to improve your venture.

Therefore, what happens when your business gets summoned for a lawsuit, or recieves state office documents while you are away on vacation? Do you pack your bags and leave? The United States business law dictates that you must at all times have a business agent that will be responsible for receiving these documents during normal business hours.

This particular agent, which can either be a separate business or an individual must be available to receive and sign the documents. The idea behind this is to make sure that processes such as receipt of tax, or notice of lawsuit run smoothly and to avoid situations where people claim the documents got lost in the mail.

That is the reason for having a business agent. It is also the reason so many business and corporations especially those that are owned by a single person often have a registered agent at another location, where they will receive the paperwork for the business and later ensure that the business owner receives them.

To many people, it might seem like a small role to play. But take this example. Your product ends up injuring a client, and they decide to sue. You never receive the paperwork, maybe because you are out on vacation or business or because the current agent is a bit sloppy.

So since you have not received the paperwork requiring you to appear in court, you will not be able to know when the case will happen, and fail to appear for the proceedings, losing a default judgment, all due to a simple oversight. I don’t think anyone wants that kind of thing to happen.

Because of that, you will need a professional and registered agent or a qualified Lawyer. However, you should keep in mind that this particular individual needs to be available to receive the paperwork in person. Therefore, the address that you give to the state cannot be a P.O. Box. It is generally wise to choose a registered agent that works in the state in which you were incorporated.

 

So what happens if I fail to designate a Registered Agent?

A corporation that fails to select a registered agent may risk falling out of good standing with the particular state that it has been registered in. The penalties that are involved though varies with the state include license revocation, fines and even inability to enter into legal contracts or gain access to the courtroom system.

The process that would be involved in reinstatement proceedings could include further monetary, civil, and even criminal sanctions as well. So why not get a registered agent to represent you? With the assistance of a qualified legal attorney, you can be able to get a qualified registered lawyer that will benefit your business.

 

Mollaei Law is a law firm specializing in business law serving businesses and entrepreneurs. We provide legal expertise in all stages of business development by drafting and reviewing contracts and agreements, assisting transactions and negotiating, forming LLC's and Corporations, registering trademarks and copyrights, business planning, and answering any legal questions you may have about your business.

Sam Mollaei, Esq., business lawyer, can be reached by email sam@mollaeilaw.com or via phone (818) 925-0002.