Selecting the registered agent for your LLC – Vital points to know
Have you been nurturing the idea of setting up your own business so that you could ditch your corporate cubicles for good? If you’re not satisfied with the little bit of salary that your 9-5 day job is providing you with, you must have thought of a lucrative business idea and you must have also decided about whether you wish to form an LLC or an S-Corp or a traditional partnership business.
Regardless of whether you’re forming an LLC or an S-Corp, you will require choosing a registered agent for the business and also include the address and name of the agent on the documents which are needed during formation of the business. Make sure you go through the below mentioned points before choosing an agent.
Registered Agent – Who is he?
If there is someone who wishes to sue your business, the party requires notifying the business about the lawsuit. There are few states, the law demands a copy of the lawsuit to be delivered in person to another business representative and few other states require it to be mailed. Who should actually receive the lawsuit on behalf of the business? The states need business entities to have the address and name of the registered agent on their files.
The registered agent is either the entity or the person who has agreed to stay available on business hours so that he could accept lawsuits and other vital papers on behalf of the business. There are some states which call you a statutory agent instead of a registered agent. Besides accepting lawsuits, they also receive tax notices, subpoenas or other official correspondence.
Who are liable to act as a registered agent?
The requirements for registered agents usually vary from one state to another but there are few rules like:
- The agent should have a street address within that state as only having a P.O box wouldn’t be enough
- The agent has to be available at that mentioned address during business hours
- An LLC or a corporation shouldn’t act as its own registered agent but one of its owners or employees can act as an agent
Is it okay to be your own company’s registered agent?
Naming an owner of employee to act as your own business’ registered agent can help you save money as third-party registered agents will demand fees which can sometimes be hefty. Here are the downsides of acting as your own agent.
- You might be personally served with lawsuit at your business
- Your address and name will become a part of the public records of your business when you file with the state
- You have to sift through lots of mails, notices, solicitations and documents which will be addressed to the business
- You won’t be able to travel often if you had been a traveler because you would be required to be present at the physical address given
So, as we see, it is always better to hire an outsourced registered agent to let go of all the stress of handling lawsuits and other vital documents.