Business entities like LLCs and corporations are required to appoint a registered agent when they form—and to have a local registered agent in every state where they transact business.
This requirement for a registered agent or registered agent service came about as an aspect of due process. Due process states that before a lawsuit or other legal action can move forward in the courts, all parties must be properly notified. The most basic function of a registered agent is to ensure your business is properly notified when involved in a lawsuit. The registered agent will forward all state and legal documents.
If you choose to designate yourself or another member of your active company, such as an LLC, C Corp, or any other entity type, there are a number of things you should keep in mind.
First, a registered agent must always be available to receive service of process notices, government correspondence, and other important documents. This means the registered agent must always be present at your registered physical address during normal business hours.
If the registered agent can’t be found—for example, if the person you designated takes holidays or even occasionally goes off-site to attend a meeting with a client—delivery can’t be made, and the consequences can be quite severe.
Other considerations? Generally, if you designate a member of your LLC as the LLC’s registered agent, the physical address you use for service will be your place of business or your personal residence, as that’s where your registered agent is likely to be during regular business hours. It can therefore be quite embarrassing if someone sues your company and serves notice of the lawsuit in front of your customers, clients or family members.
And if you move your business, you’ll have to file a change of address for your registered agent. With a third-party registered agent, you can move your business as often as you want without it affecting the address of your registered agent.
Please be aware that there will be a yearly charge for this service in the anniversary month that the entity was established in. This will vary by state.