What is a Registered Agent?
A registered agent’s purpose is to receive formal notices and other communications in the state where you are incorporated, and forward these to your company, whose office is often in a different state. For instance, someone can validly serve your company with a lawsuit by serving it on your registered agent.
A company must choose a registered agent early in its life cycle since a registered agent has to be named on either the Articles of Organization for an LLC or the Certificate of Incorporation, also called a Charter, for a Corporation. The registered agent’s address must be in the same state in which the company’s Articles of Organization or Charter are filed.
What is a Registered Agent NOT?
It is NOT a mail forwarding service. Many companies (such as Harvard Business Services) offer both Registered Agent services and Mail Forwarding services. These are different services. The distinction is this: You are required by law to list a registered agent address in the state where you incorporate on your charter so that service of process (a lawsuit) might be sent to you there. A mailing address has a separate purpose and is the address you’ll use for your startup for contracts and taxes, amongst other things. If you want an address you can list as your mailing address and share with others, you need a mail forwarding service. Any mail that’s not a lawsuit or something similar that’s accidentally sent to your registered agent (assuming you haven’t bought mail forwarding services from the registered agent) will be returned to sender.
Who should be the registered agent?
There are two commonly used options when selecting a registered agent: (1) a registered agent service whose single job is to be a registered agent, or (2) an individual, such as the founder, their lawyer, or an employee, provided that this person's address is in the state where the company is incorporated.
When selecting its registered agent, a company should keep a couple of things in mind. You should know that there is no particular magic to being a registered agent. Most people are not even aware that they can choose a lawyer or even themselves as a registered agent. Delaware, for example, requires a registered agent to fulfill the following core requirements: (1) accept service of process and other communications directed to the company, and (2) forward these notices to the company.
Anna lives in Massachusetts and is planning to incorporate her company in Delaware. Because she doesn’t have a Delaware address, she will need to retain a registered agent in Delaware.
Barbara lives in Massachusetts and is planning to incorporate her company there. She needs a registered agent in Massachusetts. Because she lives in Massachusetts, Barbara can use her Massachusetts address and list herself as her company’s registered agent.
Don’t mess it up
Very few people will use individuals for registered agents. The importance of the role is why many companies choose professional registered agent services. Although being a registered agent is not particularly difficult and mainly involves having an address in a specific state to receive mail, there could be serious consequences if a registered agent doesn’t fulfill their obligations. For example, the tax documents and other legal notices that are sent to the agent’s address are important and, if missed, could result in fines or other penalties. Or if the company isn’t made aware of a lawsuit that was served on the registered agent, a default judgment could be entered against the company without its knowledge. When in doubt, go with a professional service.