If you’re considering starting an LLC, you may be wondering if you need to engage a registered agent. The answer, unfortunately, is not as straightforward as we would like. Let’s take a look at the pros and cons of having a register agent for an LLC, so you can make the best decision for your business.
Introduction: what is an LLC?
A limited liability company (LLC) is a business structure that can combine the features of a corporation and a partnership/sole proprietorship. Like a corporation, an LLC has limited liability for its members. Like a partnership, an LLC has “pass-through” taxation. This means that the LLC itself does not pay taxes on profits; instead, profits and losses are “passed through” to the individual LLC owners and reported on their personal tax returns.
An LLC can be formed by one or more persons. There are no restrictions on the types of businesses that can be organized as LLCs. Generally, any type of business can be organized as an LLC, except for banks and insurance companies.
Unlike shareholders in a corporation, LLC owners are not protected from personal liability for the debts and obligations of the LLC. However, members of an LLC are not personally liable for the acts or debts of the other members except to the extent they have guaranteed those debts or obligations in writing.
What is a registered agent, and why do LLCs need one?
Most LLCs will need to appoint a registered agent. A registered agent is an individual or business designated to receive official correspondence on behalf of the LLC. The registered agent must have a physical address in the state where the LLC is formed and agree to be available during normal business hours to accept service of process and other official correspondence.
The role of the registered agent is important because it ensures that the LLC always has someone who can accept official correspondence and legal notices on its behalf. This is essential because, if the LLC were to miss an important notice or document, it could be subject to late fees or other penalties.
Appointing a registered agent is usually required by state law, and failure to do so can result in the dissolution of the LLC. Registered agents can be individuals or businesses, but they must have a physical address in the state where the LLC is formed. Many people choose to appoint themselves as their own registered agent, but it’s important to remember that this means making yourself available during normal business hours to accept service of process and other correspondence.
If you don’t want to be your own-registered agent, you can appoint another individual (like a friend or family member) or a professional registered agent service. Professional registered agent services are businesses that agree to serve as your LLC’s registered agent for a fee. Professional registered agent services are a good option if you don’t have someone else who can serve as your registered agent, or if you want someone else to handle this responsibility for you.
The benefits of having a registered agent
A registered agent is not required in every state, but we recommend having one for several reasons.
A registered agent also allows process servers to serve legal papers on the LLC without having to track down a member or manager. This is important because, if the LLC is ever sued, the process server will need to serve the legal papers on the LLC in order for the lawsuit to move forward.
Finally, a registered agent protects your privacy by keeping your home address off public record.
While you are not required to have a registered agent in every state, we think the benefits outweigh the cost (which is typically just a few dollars per year).
The duties of a registered agent
The duties of a registered agent are to receive and forward legal documents on behalf of the LLC. These documents can include, but are not limited to, service of process of lawsuits, tax forms, official government correspondence, and notice of meetings. The registered agent must have a physical address in the state where the LLC is formed and must be available during normal business hours.
How to choose a registered agent for your LLC
A registered agent is a person or business designated to receive service of process (SOP), legal notices, and tax documents on behalf of your LLC. Most states require LLCs to have a registered agent, and the agent must have a physical street address in the state where the LLC is formed. The registered agent’s name and address are part of the public record, so it’s important to choose someone you trust to protect your privacy.
You can act as your own registered agent, but there are some disadvantages to this arrangement. If you work long hours or travel frequently, you may not be available when process servers or government officials come looking for you. And because your name and address are on the public record, you may receive sales pitches from businesses trying to sell you products and services.
Another option is to hire a professional registered agent service, which costs $50 to $100 per year. This can be a good solution if you want the convenience of having someone else handle this task for you. Just be sure to do your research before hiring a registered agent service — not all companies are equally reliable or trustworthy.
The bottom line is that you need to choose a registered agent that you can rely on to be available during business hours, protect your privacy, and keep your information safe and secure.
How to change your registered agent
If you’re registered with a commercial registered agent service, you’ll need to contact them and let them know of the change. They will usually require you to fill out a form. Once the form is completed, they will file the paperwork with the state.
If you’re registered with the state, you’ll have to file a Change of Registered Agent Form with the state.
How to cancel your registered agent service
If you no longer need a registered agent for your LLC, the first step is to contact the registered agent and let them know that you’ll be canceling their service. The registered agent will then have 10 days to file a notice of cancellation with the state.
Once the registered agent has filed the notice of cancellation, you’ll need to find a new registered agent for your LLC. You can either choose an individual within your LLC or a commercial registered agent service. If you choose an individual, they must have a physical address in the state where your LLC is formed and be available during normal business hours to accept legal documents on behalf of your LLC.
If you choose to use a commercial registered agent service, there are many options available. Do some research and choose a service that meets your needs and is reputable. Once you’ve selected a new registered agent, contact the Secretary of State’s office in your state and let them know that you’ve changed registered agents for your LLC.
FAQs about registered agents for LLCs
No, you don’t need a registered agent for your LLC. But there are some good reasons to have one.
A registered agent is an individual or business that agrees to receive legal and official documents on behalf of your LLC. This can include service of process (if you are sued), tax notices, and other official correspondence from state and local governments.
A registered agent must have a physical address in the state where your LLC is formed. Many LLC owners choose to be their own-registered agents, but this isn’t always practical—especially if you live out of state or travel frequently.