What is a Registered Agent?

A registered agent, also referred to as an annual agent, resident agent, or a statutory agent, is a designated individual or company through which all service of process (SOP) - the procedure of delivering legal notice or summons from a court body - is received.

Registered agents represent business entities such as limited liability companies (LLCs) or corporations, and are mandated in each state under different specifications.

Although registered agents are usually lawyers or designated service companies, employees and owners of the companies themselves may also serve as registered agents.

Because business entities such as corporations and LLCs provide liability protection and tax benefits that are not shared by self-employed or unincorporated companies, registered agents serve to provide the business entity with an address to which all legal services of process can be administered in the event of legal action or court summons.

Registered agents also serve as the recipient address for all tax and legal documents issued by the state or federal government. In addition, it is the responsibility of the registered agent to notify the respective business of all legal proceedings.

Failure to maintain a business' designated registered agent can lead to a suspension or invalidation of the company's legal entity status. Likewise, a registered agent who fails to perform his or her state-mandated duties can have a costly effect on the business itself.

As different states have different regulations with respect to who can serve as a business entity's registered agent, complications can often arise regarding operations that span multiple states. But in general, a registered agent must be a resident of the state in which the agent is appointed.

Corporate officers are allowed to serve as registered agents in all states, as are corporate lawyers.

In states that allow business entities to serve as their own registered agents, the entity in question must be legally authorized to do business in that state. However, many other states require a third-party registered agent - a practice that has opened up a market for businesses to provide such a service.

Since a registered agent serves as the channel through which all legal proceedings are sent, a third-party agent can help restrict knowledge of lawful or financial matters to those responsible and no more - a benefit for business entities that wish to keep such matters private.

Additionally, the appointment of oneself as registered agent commits one to being at the location specified during normal business hours, without exception, year-round. For smaller businesses or startups with a mobile or traveling staff, this can become significantly prohibitive.

However a third-party agent, by nature, is granted with a certain degree of control and cost. Small businesses wary of delegating may be wary of appointing a third-party agent.