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Nonprofit Education

What is a Registered Agent, and Why Does My Company Need One?

When starting a company – whether a nonprofit or for-profit business – it is important to know that most (if not all) states will require that you have multiple addresses on file, all of which serve a different purpose. Here is a general breakdown:

  • Physical address – To begin with, the state wants to know what address you are conducting your physical business in. This information will be public record. This can be a home address, an actual brick-and-mortar business address, or a third-party provider (like a virtual office).
  • Mailing address – About as simple as it sounds – this is where the state will send mail to (from them). Commonly, this is the same as the business address. Another popular option is to use a PO Box or alternative mailing option when you don’t want important mail going to the actual business location.
  • Registered Agent Address – Finally, the state requires a registered agent address or an “agent for service of process.” This is where it can get a little confusing. Your registered agent can range from an individual person to a corporation, either of which is designated to do the same thing: receive official company and legal documents, such as state compliance documents, lawsuit papers, subpoenas, and other official legal or business paperwork.

Registered Agent Explained

A common misconception is that the Registered Agent is basically a mail-forwarding service. It is not. Here is a bigger breakdown:

Regardless of where you were incorporated, every company is required to designate a registered agent. Regardless of whether you are a for-profit, nonprofit, or limited liability company – you are a separate entity and can be sued and served with legal papers. Additionally, the state periodically sends important business compliance and tax information and wants to ensure delivery to minimize any disruptions to the business. To facilitate this process, the state requires businesses to designate a Registered Agent on file to deliver these papers. From there, the Registered Agent is expected to ensure the business receives such important and official documents.

So essentially, the requirement of a Registered Agent is to ensure businesses can be easily reached for official purposes. This role is more important than ever with so many businesses being run remotely or out of residential addresses.

Think of it this way: a Registered Agent is a backup plan to guarantee your important legal documents make into your hands.

What Specifically Does a Registered Agent do?

  • Accept service of process and official mail on behalf of your business.
  • Notify you when they receive official mail, notifications, or documents for your business.
  • Forward important documents to your business in a timely manner.
  • Maintain an in-state physical address (called a registered office). This address does not receive “normal mail”.
  • Remain open during regular business hours to accept any notices on behalf of your business.

Registered agents fill a critical role for companies, so any business in the process of choosing one should carefully consider their options. For most businesses, this means deciding between hiring an outside agent, serving as their own registered agent, or choosing someone outside the company. So, which do you do?

Hiring an Outside Agency

Each state has an authorized third parties who provide registered agent services – including us! Through our partnership at Legalinc, BryteBridge provides registered agent services in all 50 states. If your business operates within more than one state, having a designated registered agent to represent you in every location can greatly simplify and streamline the process for your company.

When clients hire BryteBridge/Legal Inc. to be the registered agent, your important documents received are scanned as soon as it arrives. From there, the document is uploaded to a secure portal to quickly notify your business of any important correspondence. Additionally – if it is critical – we will attempt to reach you by phone. This is helpful if your business is facing a lawsuit or pending compliance issues of the business.

Serving as your Own Registered Agent

While not advisable, another option is to act as your own business’s registered agent. Every state allows company officers to be named as Registered Agents. For smaller businesses, you can typically just list yourself as the business’s Registered Agents. Here are some important things to consider beforehand:

  • You must be available during business hours – To receive paperwork, you must be present during normal business hours. Unless you operate out of a brick-and-mortar location, the odds are that, during normal business hours, you will be at work, and it is inadvisable to be served with legal paperwork at your place of business. Even if it is nothing serious — it could be a detriment to your company morale.
  • Registered Agent Address is Public Record – The address of a registered agent is publicly listed, meaning you can receive all types of junk mail sent to your business. Or, if you chose to list your home instead, to your house.

Additional Alternatives

If you have a CPA or lawyer, they can often serve as your registered agent. Additionally, it’s common that any resident of the state you do business in can serve as your Registered Agent.

Selecting someone associated with your business is often a good idea, especially if the state regularly delivers important paperwork to the registered agent. It can be difficult to find someone you trust to handle receiving and acting on such important and delicate matters. Like we mentioned before, attorneys and CPAs are a good option, but oftentimes their Registered Agent services might not be their core focus, and it can be expensive. A good middle-ground is to go with an outside agency — like BryteBridge and our partners at LegalInc.

Every business works differently, so be deliberate in your thought process. Review the information we have given you, and if you have any more questions, feel free to give us a call at 1-877-857-9002!

A couple of pointers before we leave: If the costs of having a registered agent are the deciding factor, then staying within your company might be a good choice. If you want to keep matters involving the company private, then it will probably be worth paying someone outside the company. No matter who you choose, you can always change  as your business needs evolve.

FAQS

If a business puts the Registered Agent address on bank accounts and other company records will the Registered Agent notify them of the mail or documents received?

No, they should not use the RA address for anything other than tax or legal purposes or when a Registered Agent’s address is specifically requested, such as when the state requires it.

What should a business consider when they want complete privacy while meeting state requirements?

If a business is operating out of their residence or other location that they do not want to be made public, they should consider the following.

  • Mail– For receiving their regular mail correspondence, they should consider a P.O. BOX, virtual mail provider, or virtual office provider to receive, scan and forward all other mail.
  • Legal & Tax Documents – Consider using a third-party Registered Agent to receive legal and tax documents and forward them to the business.
  • Physical Address – Consider using a third-party such as a private mailbox provider, virtual mail provider, or virtual office provider to provide an official address and receive mail.

If a business operates in multiple states, do they need a separate Registered agent in each state?

Yes, they must have a separate registered agent in each state they are operating in, even if they don’t have a physical address in that state i.e., foreign registrations. If your business operates within multiple states, having a designated registered agent to represent you in every state can simplify and streamline the process greatly for your company.

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