Do you want to become a registered agent? Understanding how to become a registered agent is useful when dealing with different companies, namely LLCs. Someone has to accept subpoenas and applications on behalf of the company and this is handled by a registered agent, sometimes called a statutory agent. In our article, you can find out more about the procedure for becoming an agent, the requirements and functions as well as the advantages and disadvantages.
What is a Registered Agent?
A registered agent is assigned to a business or other formal structure to act as its representative. Also called a statutory agent, a resident agent, or a commercial clerk, their main task is to receive essential documents in the company’s name and forward them to the owner. This includes:
- Service of process such as summons and subpoenas;
- State correspondence like annual reports;
- Tax documents;
- Administrative notices.
At a first glance, it may seem like the job in question is that of a glorified clerk. But it’s exactly their efforts that are crucial for maintaining a compliant business, whether it’s domestic or foreign.
No business structure is allowed to legally operate in any state without first appointing an agent. Although the requirements for this position often differ depending on location, some of the general rules remain the same, stating that all companies must maintain an agent throughout their existence.
Who Needs a Registered Agent?
Business types that must appoint a registered agent include:
- Corporate entities;
- Limited or limited liability partnerships;
- LLCs, PLLCs, Series LLCs.
When a business entity goes through its initial formation, the state requires the organizers to provide their registered agent information during the filing, i.e. writing it in the formation documents. This means you have to find a candidate prior to registering your entity.
When you are ready to register, include your register agent information in your Articles of Incorporation (for corporate entities), state registration application (for partnerships), or Articles of Organization (for LLCs).
Keep in mind that this process must be repeated for each new state you choose to expand your business to. When you qualify as a foreign entity in another state, you have to find a registered agent in that state for handling all your documents within that jurisdiction.
Unlike limited partnerships, sole proprietorships and general partnerships are not required to create a formal structure with the state, so they don’t really need to appoint a registered agent.
Who Can Be a Registered Agent?
Most states tend to be fairly lenient when it comes to these rules. As it stands, you don’t need to obtain any special degree or pass any qualification tests to become one. Sometimes, owners even choose to appoint themselves to this position, mostly when there’s a need to cut down costs.
The only countrywide rule that applies to all entities is that they can’t act as their own registered agents. This is different from one of the owners doing it since they are acting as an individual separate from the entity. But that’s what prevents any company from being its own agent—by law, the agent must be legally separate from the entity it’s responsible for.
It’s possible to appoint almost anyone as a registered agent as long as they meet other state requirements. Some of the popular options include:
- Entity’s owner;
- Family member or friend;
- Member of staff, one of the managers, a business partner, etc;
- An attorney;
- An accountant;
- A company that provides business solutions.
While acting as your own agent or appointing a friend might seem like the cheapest and easiest solution, most experienced entrepreneurs choose to work with business attorneys or professional formations services. After all, running a company is a highly time-consuming job, and registered agents must be readily available at all times, which isn’t the luxury many owners can afford.
What is Required to Become a Registered Agent?
Disregarding a few outliers, most states are rather general in their approach to qualifying registered agents. It’s possible to be appointed as an agent if the candidate fits the following basic criteria:
- Individuals that want to become registered agents must be of age, so at least over 18 years old;
- Legal entities—both domestic and foreign—that wish to perform these duties must be authorized to operate in the state of registration;
- They must have a valid street address in the state (P.O. boxes do not qualify), which will act as their registered office;
- They should be present at their registered business address throughout working hours to receive correspondence.
Although the rules may seem a bit lax, keep in mind it’s more of a generalized set of guidelines that shouldn’t be used as the only source of information for choosing an agent. Certain states have specific rules for appointing registered agents, and skipping over them is likely to result in the rejection of your application.
In some jurisdictions, you are first required to obtain written consent from your future agent which must be submitted along with your formation documents. Consent or acceptance forms simply let the authorities know that the individual has agreed to act as your company’s agent.
There may also be a few additional administrative requirements. For example, in California, corporations that wish to be appointed as registered agents are required to submit Form 1505 or the Registered Corporate Agent for Service of Process Certificate. Some states also put limitations on which types of formal structures are allowed to be agents—for instance, you may not be able to appoint an LLC as your agent if the local laws forbid it.
If you want to start operating in other states, the existing agent won’t be eligible. When you register your company as a foreign entity, it must get its own agent with a local state address. Naturally, doing business in multiple states may be expensive due to annual service charges that include your registered agent fees.
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