Choosing a registered agent can be one of the more confusing parts of starting an LLC. What is a registered agent? How do you choose a registered agent? Can you change your registered agent? Can you serve as a registered agent for more than one LLC? It may seem confusing, but don’t worry—if you’ve got questions about registered agents, we’ve got answers. Read on for everything you ever wanted to know (and more!) about choosing a registered agent for your LLC.
What Does a Registered Agent Do?
A registered agent is, quite simply, the entity or individual that has been designated by the LLC to receive all official communications on behalf of the LLC. These communications can include tax correspondence from the IRS, communications about regulatory actions, service of process notices, and compliance-related documents. It’s important to note that a registered agent does not have the authority to act on the LLCs behalf in a proactive manner. They cannot enter into contracts or other legal agreements—they are simply the passive receiver of legal communications. They are obligated to forward any communications they receive in a timely manner to the LLC members.
What Are the Requirements for Registered Agents?
Your registered agent must meet two very simple requirements:
- The registered agent must be a resident of the state in which you registered your LLC.
- The registered agent must have a physical address. Documents cannot be delivered to a P.O. box or virtual mailbox.
With only two legal requirements, you might think anyone could serve as your registered agent. But there are a few important things you should consider before you finalize your decision.
Choosing a Registered Agent—Things to Consider
The biggest question you’ll need to answer when it’s time to designate your registered agent is whether you’ll serve as your own registered agent, or whether you will use a third party. For many people, the biggest issue with serving as their own registered agent is that the registered agent must always be available to receive government correspondence, service of process notices, and other important documents. This means that during normal business hours, the registered agent must always be present at the physical address you registered for your LLC. If your business often requires you to travel or take meetings offsite, you may want to consider using a third party as your registered agent to avoid any negative consequences of interrupted deliveries.
Convenience and continuity are other reasons many people select a third party as their registered agent. If your LLC’s place of business is the registered address, then you will have to update your registration any time you change locations. By selecting a third party, the registered address stays the same, no matter how many times you change location.
Third Party Registered Agent Services
Many LLCs ultimately end up deciding to use a professional registered agent service. This is an easy and convenient solution that ensures someone is always available during standard business hours to take delivery of notices and other documents on your LLC’s behalf.
Is a Registered Agent Absolutely Necessary?
The registered agent role may seem simple, but it is a critical role. You’ll be required to designate a registered agent when you file your LLC paperwork, but over time you may be tempted not to maintain that relationship. Don’t be fooled—it’s important that you always keep your registered agent status up to date. If you change your registered agent for any reason, you’ll need to file the appropriate form updating the state with the new information.
If you let your registered agent relationship lapse, you could find yourself in serious hot water. Your LLC may lose its good standing status in the state of registration and/or may be subject to fines, sanctions, and penalties. You could also miss important correspondence or service of process paperwork. This puts you at risk of having a default judgement issued against you before you even know about the lawsuit.
The role of registered agent is simple but critical to successfully starting an LLC. At PRIME, we can help you with your registered agent paperwork as well as the entire LLC registration process. Book a free consultation today to put your business on the fast track to success!
Registered Agent FAQs
Can I change my registered agent?
You can change your registered agent at any time, but you must update the state by filing the appropriate paperwork.
Do I have to pay my registered agent?
If you serve as your own registered agent, you will not have to pay for that service. Similarly, if you have a friend or family member that is willing to perform that service for you, you are not required to pay them. If you choose a professional third party registered agent service, you will pay a fee that can range from fifty to several hundred dollars, depending on the state of registration and other considerations.
Can I serve as the registered agent for my LLC?
Yes, you can legally serve as the registered agent for your own LLC.
Can one person serve as the registered agent for multiple LLCs?
Yes, there is no restriction on the number of LLCs for which you can serve as registered agent. Third party registered agent services typically fill that role for hundreds or even thousands of businesses.
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