By: Katelyn J. Dougherty, Esq.
Originally Published December 18, 2019 – Updated December 22, 2022
When you form a business, whether it’s a corporation, LLC, or partnership, you’ll need to designate a Registered Agent. A Registered Agent is a person or entity responsible for receiving important legal and tax documents on behalf of your business. While you can designate yourself or a company officer as your Registered Agent, there are several benefits to using a third-party Registered Agent. Now, bear in mind, not all companies are created the same, so not all of the reasons below may apply equally to all businesses.
Here’s a look at the value of a third-party Registered Agent:
1. You Work From Home
A third-party Registered Agent can help protect your privacy. When you designate yourself or a company officer as your Registered Agent, your personal information becomes a public record. For example, a registered agent’s address is a public record, and, in some states, like Delaware, it is the only address that appears in the public records of the company. That means anyone can access it, and either send solicitations or show up at your door. By using a third-party Registered Agent, you can keep your personal information confidential, and reduce the number of solicitations your business may receive. It can also help minimize the chance that a stranger will show up at your front door.
2. You Don’t Have a Physical Place of Business Address
Registered Agents are required to have a physical address, as opposed to a post office box, because the state requires someone to be available during regular business hours. Having a post office box does not meet that requirement since the United Postal Services cannot serve as your company’s registered agent.
3. Your Business Doesn’t Operate During Regular Business Hours
A registered agent for a business is required to be available during regular business hours to accept important documents when they are delivered. If you set your own hours, have unique hours, or if you are always on the go, not only do you fail to meet this requirement, but you might also miss critical communications. Having a third-party Registered Agent means that they will receive the crucial documents ensuring they get to you. Furthermore, if your legal team is serving as your Registered Agent, they will be able to evaluate the communications in a more timely and efficient manner offering better legal protection.
4. You Want to Maintain Your Privacy Should a Legal Matter Arise
Although you hope for the best, anything is possible, even a lawsuit. When a business is served with a Service of Process (a document informing you that a lawsuit has been filed against you in court), it is often delivered by a process server, or a local law enforcement officer, to the address on file for the registered agent. Most people don’t want these process servers showing up at their office or place of business, especially in front of customers/clients and employees, or in the event you have a home-based business, family, friends, and neighbors. By using a third-party Registered Agent, you ensure the receipt of important communications promptly and privately. Furthermore, if your legal team serves as your registered agent, they can evaluate the suit more efficiently, ensuring that a response is filed and vital deadlines aren’t missed.
5. You Travel Frequently
If you travel for work (or pleasure), or you are a sole proprietor without any employees, and your line of work requires you to be gone from the office all day (such as a solo plumber), having a third-party Registered Agent allows you to be in compliance with state requirements so you can go out and focus on your business. With a third-party Registered Agent, you can have peace of mind knowing that your business is in compliance, and all important legal and tax documents are being received and handled appropriately.
6. You Want to Ensure You Are In Compliance
Compliance matters may not be your area of expertise or interest, and each state is different. Having a third-party serve as your registered agent helps you stay compliant, avoid unnecessary state penalties and fees, and maintain your company’s good standing in your state of qualification. A third-party Registered Agent can help ensure your business is in compliance with state laws because they know the legal requirements and can help ensure you’re meeting all deadlines and requirements. They can also provide you with reminders of when your annual filings are due, and even file on your behalf, allowing you to focus on the more important stuff, a successful business.
In conclusion, while you can designate yourself or a company officer as your Registered Agent, there are many benefits to using a third-party Registered Agent. They can help ensure compliance, protect your privacy, and provide additional services that can add value to your business. When selecting a third-party Registered Agent, it’s important to choose a reputable provider with a track record of reliable service and expertise in your industry.
Do you have questions regarding registered agent services for your business? Contact Us!
This Blog was written by Founding Attorney, Katelyn Dougherty.
DISCLAIMER: This blog is for educational purposes only and does not offer nor substitute legal advice. This blog does not establish an attorney-client relationship and is not for advertising or solicitation purposes. Any of the content contained herein shall not be used to make any decision without first consulting an attorney. The hiring of an attorney is an important decision not to be based on advertisements or blogs. Harbour Business Law expressly disclaims any and all liability in regard to any actions, or lack thereof, based on any contents of this blog.