In most states, all LLC owners must elect a registered agent when forming their LLCs. This agent receives correspondence from the government, which keeps the LLC compliant and operational. We delve into the legal obligations of registered agents and why hiring one is a good business move:
Roles of Registered Agents
The state will always communicate with your business regarding its legal obligations. And the only way to do this is for you to elect a person or company that will receive this correspondence, including:
- Tax Notices: You are probably painfully aware of how wry tax problems can be, especially when unsolved. The state will always communicate with you regarding any due tax payments and changes in tax policies. Keeping up with this information can help you avoid extra penalties, which can affect your business income,
- Compliance Notices: Your business must remain compliant for the state to allow you to operate it. And part of being compliant is filing reports with the state timely, paying any due fines, and keeping abreast of business laws. Missing out on deadlines can result in penalties or dissolution. The latter consequence is common in states which have strict filing dates,
- Service of Process: Your business can sue or get sued. And the only way to keep up with your legal obligations is to receive service of process on time so you can respond accordingly.
Please note that having a registered agent is not optional in most states, as the law explicitly requires one during LLC formation. You must also maintain a registered agent on your public records to maintain business compliance. Luckily, you can take up this role or hire a professional registered agent.
Benefits of Professional Registered Agents
To delegate or not to delegate? In business, you will often grapple with this question as it embodies two crucial factors – maintaining control and ensuring quality. On the one hand, you want to take charge of every aspect as it allows you to do things as you wish. But on the other hand, you cannot be on top of everything in your business. Sometimes, you must let go of some control, especially regarding receiving legal correspondence.
Let’s review some of the best reasons to hire a professional registered agent:
- When you don’t have a physical address: Per the registered agent policies, LLCs must have physical addresses where government officials can drop off documents. Otherwise, the service of process cannot be complete as nobody would sign off on the package. Hiring a registered agent is in your best interests if you currently do not have a physical address and instead have a P.O. Box.
- When you want to enjoy privacy: When government officials need to serve you with papers, they do not necessarily wait until your office or premise is free of clients. Instead, they can come anytime, provided it is within office hours. That can easily give rise to a situation where your employees or clients see you getting served, sparking rumors or worse. But when you have a registered agent, they can receive the paperwork, and your clients would be none the wiser.
- When you are not in your office regularly: Many people start businesses and realize they cannot stay put during office hours. Maybe you travel often or need to be out in the field. If you are not available, you can miss out on important documents. But if you have a registered agent to receive the paperwork, you can cater to tasks outside the office.
Ensure you choose an agent who can afford you all these perks.