Description: SCORE has a detailed description of the concept of registered agent on their website.
What is a Registered Agent and Do I Need One?
Business owners choose to incorporate or form a Limited Liability Company (LLC) to help protect personal assets from business liabilities and to provide tax-deductible benefits for employees and owners. Both of these useful structures for small businesses and entrepreneurs are formed via an official state filing. As a state-recognized business entity, there are several legal and tax documents that your company will receive each year from the state.
Most jurisdictions require corporations and LLCs to designate and maintain a Registered Agent to receive and forward such documents on behalf of your company. The Registered Agent for your corporation or LLC must be located at a legal address (not a PO Box) within that state, hence they are sometimes referred to as “Resident” Agent. Your company‘s Registered Agent is required to be available at all times during normal business hours to receive documents and tax notices from the state and service of process from any legal proceedings.
Failure to maintain a Registered Agent can result in loss of corporate or LLC status. Equally important — if a responsible party is not available to receive service of process at all times, then your company could be unaware of a legal claim and a judgment may be entered against you.
It is not a good idea for businesses to serve as their own Registered Agent. Rather, the safest route is to select a reliable third party such as a service company. Using a service company as Registered Agent provides peace-of-mind for busy business owners:
- It gives you the freedom to let business (and vacation!) take you out of the office.
- It provides a layer of privacy, protecting you from being served with a legal proceeding in front of customers, clients, vendors or neighbors.
- It allows you freedom to change locations as your company grows, without filing costly changes of address with the state each time.
The Registered Agent serves a critical purpose and is an important part of protecting your corporate status and your company‘s future. It is important that small businesses select a highly reliable company to serve as their Registered Agent. Incorporation and LLC service companies often provide Registered Agent service as part of their formation package. Look for a company that maintains a nationwide network of offices and serves as a full time Registered Agent in all 50 states plus District of Columbia, so that they can service your company‘s needs as you grow.
A good Registered Agent has long-standing relationships with Secretaries of State. They should forward to you, via traceable overnight courier, all service of process the same day it arrives, summarizing the vital information, including who is bringing suit, in what court, when process was served, the nature of the case and how much time you have to respond. Plus, they should receive and promptly forward official state documents such as franchise tax notices and annual reports.
Furthermore, according to Illinois Secretary of State, the registered agent is not necessarily the person who incorporated the company. It is the person that the state sends all correspondence (i.e. lawsuits) to. Once an annual report is filed, the person who filed it comes off the database. The state does not know who the owner of a company is and it is not in the corporation papers. If a company does not file an annual report by five months after the due date, the state will dissolve the company as a legal entity. The company can still be doing business.
Secretary of State, Corporation Information (12/94)
Date Last Revisited: 2/5/07