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Five Questions to Answer Before Using an Individual Registered Agent

Every state requires that corporations, LLCs, and other formal business types (such as limited partnership) formed or registered to do business in that state have an in-state registered agent. Many states prohibit the business itself from serving as the registered agent, but most allow an individual associated with the business to fill this vital role. However, having an individual serve as registered agent often proves to be an unwise decision.

The following questions can help you decide whether having a professional Registered Agent makes sense for your business. If you answer “Yes” to any of these questions, you should definitely consider using a third-party registered agent.

1.Does your company do business in multiple states? Or, did you incorporate or form in a state other than where you do business?

Some businesses opt to form in a business-friendly state, such as Delaware or Nevada, even though their physical offices are located in a different state. And, businesses often expand into other states as the business grows.

When you register your company to conduct business in other states than your formation state, you must have a registered agent in each of those states. The Registered Agent must have a physical address in the state: A post office box or private rented mailbox won’t do. This often makes it difficult to find an individual to serve in each state where you must have a registered agent. In contrast, a professional registered agent company provides expert service in any state. And, it is easy to add additional states as your business grows.

2.Do you set your own business hours or work from multiple locations?

Your Registered Agent must be available during normal business hours at a fixed location to accept important documents, such as Service of Process, from the state.

In many states, if the Registered Agent is not available to accept Service of Process (which initiates a lawsuit), the papers may be left with any individual at the registered agent’s address. This could result in critical documents getting overlooked. And, if the agent is unavailable, most states allow the lawsuit to proceed via substituted service. Unfortunately, this often robs your business of the opportunity to defend itself.

If you set your own hours or aren’t tied to an office (for example, if you are a real estate agent or landscaper), using a professional, third-party Registered Agent ensures that a trained professional accepts these critical documents and promptly brings them to your attention. You never risk missing important state or court documents.

3.Will your address ever change?

A Registered Agent’s address must always be current in the state records. Any changes to the address require a formal state filing, which is often accompanied by a fee. By using a professional third party service as your Registered Agent, you never have to worry about updating the state records – no matter how many times you move over the years.

4.Do you want to keep your address private?

A Registered Agent’s address is publicly available. That means that anyone has access to it—including marketers, mailing lists, and spammers. As a result, Registered Agents often receive unsolicited junk mail for their business.

If you wish to keep your company or personal address information confidential or simply wish to reduce the amount of time you spend winnowing out valuable documents from junk mail, opt for a third party Registered Agent.  You’ll get an extra layer of privacy and won’t have to deal with as much unsolicited mail.

5.Do you see clients or customers at your home or business address?

Service of process (the notice that your company has been named in a lawsuit) is frequently delivered by local law enforcement officers. If you use your business address, it can be awkward if customers or clients are present when the process server arrives. If you use your home address, you may find yourself on the receiving end of questions from your neighbors. With a professional registered agent, any Service of Process is delivered discretely.

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