Why use a Registered Agent Service?

Whether you are a fan of Dave Ramsey, or have simply decided to take matters into your own hands when it comes to making money with your own business, then you will likely wonder why use a registered agent service when it comes to your work? You are not alone. There are a number of benefits when it comes to hiring a company or person to act on your behalf as a registered agent. These include increased flexibility, privacy, improved compliance with the state and federal law, and representation in states that you may not be physically present.

What is a Registered Agent?

Before deciding if you should hire a company to provide a registered agent on your behalf (or a person), it helps to know what one is and does. A registered agent is someone that you hire (or nominate) to officially send and receive papers related to your business on your behalf. These can include annual reports, state filings, and other legal actions. These people are often referred to as an agent of service of process or a resident agent and can be used for other matters as well.

Registered Agent

How Does a Registered Agent Service Deliver Flexibility?

There are a number of ways that a registered agent delivers flexibility. First, if you are starting a side business, your day job or other requirements may not allow you to be available during the work day throughout the work week (or you may not simply want to be available). A registered agent service is generally available in these timeframes (and possibly longer on request). This helps ensure that they can receive any critical legal documents you may be expecting or do not desire a delay in receipt. The registered agent service also allows you to form an LLC in a state that you do not reside in (more popular for online businesses with no physical presence). In this case, you could reside in a tax unfriendly state like New York and choose to take advantage of a state friendlier to business like Delaware or Texas when it comes to tax law. Similarly, a registered agent that has a presence in multiple states can help you there as well if you need to have a physical presence in more than one state.

How Does a Registered Agent Deliver Improved Privacy?

Many business owners imply do not want to have their home address made public for any employee or customer to find. The registered agent’s address is public record, and this provides you an additional privacy buffer since the address can be used as your business headquarters. This also ensures that any lawsuits against your business are not served in front of employees (or customers) in that circumstance.

Registered Agents Help with Following the Law

Registered agents don’t stay in business very long if they don’t help their customers stay in compliance with the law if you choose a service that will remind you of any filings due and track them for you. They can also help located state-specific legal professionals and when required, experienced accountants. Many agents will also help you maintain copies of corporate documents in the event of loss on your end.

How Do You Choose a Registered Agent Service?

Depending on where you start looking, there will likely be a wide variance in the capabilities of the service. Many times, it is preferred that the agent have an office in the state that you have formed your LLC. Additionally, making sure that your service offers compliance management (includes those reminders for filing annual reports), document management (scanning of official documents for you to access/use), is available to answer questions when you have them, and offers thorough coverage (at a minimum in states you may need a presence, or all 50 states if dealing with a larger company). Many established registered agents will also offer material and/or guidance when it comes to helping new entrepreneurs form a new business.

What Happens if You Don’t use a Registered Agent?

If you decide to forgo hiring a registered agent, there are risks involved. If your business does not have one, then you could fall out of “good standing” with the state your LLC is registered in and face penalties. These penalties include potential fines, license revocation, and losing the ability to sign legal contracts or gain access to the courts. If you have to go through the reinstatement process, this will at a minimum cost you time and money, and potentially time in court taking you away from your business.

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