Most states require you to have an LLC registered agent. Find out what statutory agent is and why every small business should have one!

Statutory Agent Definition

A statutory agent is a business entity or an individual that accepts all your legal and documents on behalf of your LLC. A statutory agent is also known as a registered agent or resident agent in legalese, and you should not be confused between these three names of one designation.

The majority of states in the USA require LLC to have a statutory agent. The agent for your LLC can be yourself, a company, a professional, or a colleague, given that they meet the criteria defined by the state.

Furthermore, the statutory agent of an LLC cannot have the same name as the LLC. On top of that, the statutory agent, or the registered agent, has to have a real physical office where mail can be delivered. Unless the address of the registered agent is able to receive the mail, the state doesn’t register and approve the registered agent.

Depending upon the nature of the business, the registered agent is appointed on the basis of articles of organization, articles of incorporation, and certificates of authority for the businesses that are registered outside of the state.

The Purpose of a Statutory Agent

The Purpose of a Statutory Agent

 

The primary purpose of the statutory agent is to receive and forward the important mails, including the legal and tax correspondences in lieu of the LLC or the corporation. Typical documents delivered to the registered agent of an LLC or corporation are ‘Service of Process.’ Service of the process includes the notification of a pending lawsuit, as well as any mail from the secretary of the state, such as annual reports and tax documents which are usually sent by the state and federal taxation authorities.

When you understand the importance of these mails and receiving and forwarding of the business documents, you can see that Statutory agents or registered agents are a critical part of keeping statutory (state-registered) business entities in total compliance with the laws of the state. Perhaps they’re not as fragrant as a rose, but they are as important in your business as anything.

What are the Requirements for a Statutory Agent?

The laws for the requirements to become a statutory agent vary from state to state. In order to become a statutory agent for a statutory entity [which includes limited liability partnerships (LLP) and limited partnerships (L.P.), as well as LLCs and corporations], a company or an individual must meet a minimum set of qualifications requirements.

On top of that, the business entity must take legal and formal action to appoint the registered agent for the entity. In the majority of the states, the statutory agent must acknowledge the appointment of being registered as a registered agent. However, some states do not require registered agents to acknowledge their appointment.

Some of the general rules for a statutory agent across the United States are:

Can You Be Your Own Statutory Agent?

As explained earlier, yes, you can be the registered agent of your LLC or corporation. However, for that to be the case, you have to make sure that you are an eligible candidate as per the laws of your state to become the registered agent of your business.

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However, while it is a common practice of smaller LLCs to use their members as the registered agents, it is not a practice that is recommended. For example, when you register yourself as a registered agent of your LLC, you risk losing privacy. To register as the statutory agent, you would have to list your address, and it will violate the very purpose of forming an LLC – your personal privacy.

Furthermore, if you are a slightly bigger business, there will be a lot of legal actions involved in the course of your everyday business, and you will be receiving loads of emails and documents. It will add extra pressure on you about the paperwork and will take your time and energy. For this purpose, a wise course of action is to appoint experienced registered agents to handle the documentation of your LLC so that you can use your energies on the constructive side of the business.

David Jonhson

CEO

Does Your LLC Need a Statutory Agent?

Unlike the laws that vary from state to state when it comes to LLCs, one thing that remains common in all LLCs is for them to have a registered agent. Every state requires every corporation and LLC to have a statutory agent, and if there is no statutory agent for a corporation or LLC, they will not be registered.

It is because an LLC or a corporation can’t function without having a registered agent, as the registered agent has to be there for receiving and forwarding all sorts of notices and documents. Furthermore, this requirement gives the state and court access to you and eliminates the possibility of LLCs and big corporations to hide behind hundreds of employees.

Benefits of Using a Statutory Agent Service

While you may feel like a registered agent is beneficial for the state and courts, it is a lot more beneficial for you and your business. For a variety of reasons, having a registered agent always works out in your favor, and here, we have listed some of the major benefits of using a registered agent for your LLC:

Compliance with the Law

The laws about LLC are very difficult to be compliant with; especially there is a load of the legal formalities of LLCs. If you run a small LLC, you can manage your documentation, but as your business grows, the load of documentation also grows, and there comes a stage where you need a dedicated person to manage all the documentation.

It is where a registered agent comes of help. Since it is a dedicated designation for managing the documentation of LLC, compliance with the state laws becomes easier. Professional registered agents understand the way laws work, and they know how to tackle the problems related to the state and taxation agencies’ problems.

Privacy

If you register yourself as the registered agent for your LLC, you’ll probably be listing your home address as the point of contact of business. This will do no good for you and will only put the address of your home on public record. Once your address is on the public record, anyone can officially contact your business (typically with loads of junk mail). It could be a concern for you in terms of your privacy violation and receiving a lot of junk mails.

But if this notion worries you, having someone else as the registered agent will help you. In doing that, the address of your registered agent will be on the record, and you will not be bothered by it. In the day and age of “Big Data,” there are thousands of websites that are scrapping the data from here and there. So, it is always a wise decision to keep your personal data away from state records and from everywhere else possible.

Peace of Mind

Once you are into running a big business under the umbrella of an LLC or corporation, one thing you miss out on is peace of mind. With a lot of legal and technical formalities, you are always into something and don’t find time for yourself. It can be made even worse if you become the registered agent of your personal LLC.

To avoid this and to have peace of mind, appointing a registered professional agent for your LLC is one of the best decisions you can make. It will relieve you from a lot of fuss related to compliance with the law and handling the documentation and notices. With all your mails and documents handled by the statutory agent, you can have your fair share of peace of mind.

Risks of Not Having a Statutory Agent

Well, to begin with, you can’t incorporate your corporation or register your LLC without having a registered agent. But, if you have incorporated successfully and have later decided not to have a registered agent, you are faced with a plethora of risks and problems.

What not having a registered agent will do to you is that you will lose your certificate of good standing, this risking your limited personal liability as well. Furthermore, you will lose your right to due process, and you will also run a risk of being fined for not having a statutory agent.

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Costs of Statutory Agent Services

If you have decided to hire a registered professional agent for your LLC, the service can typically cost you somewhere between $100 and $300 per year. For all the medium and big business owners, it's well worth the fee to not have to worry about documentation and to keep track of the official notices and annual report due dates with the office of the secretary of the state.

How to Choose the Best Statutory Agent Service?

It is a very critical process, and you should pay all due heed to it. When hiring a registered agent, you should look for a professional service provider that has experience in the field. Furthermore, you should consider the value instead of the money and prioritize nationwide registered agent service providers instead of local providers.

General FAQ

Frequently Asked Questions

In this section, we shall take a look at some of the frequently asked questions about the registered agent services:

Unlike the laws that vary from state to state when it comes to LLCs, one thing that remains common in all LLCs is for them to have a registered agent. Every state requires every corporation and LLC to designate a statutory agent, and if there is no statutory agent for a corporation or LLC, they will not be registered.

When you are selecting a registered agent for your LLC, you should consider a professional service provider with years of experience in the field. Furthermore, choosing a nationwide service provider always comes with an additional advantage, as it can help you with matters outside of your state.

As a registered agent, one of the primary duties that you have is to receive and forward the important mails, including the legal and tax correspondences, in lieu of the LLC or the corporation. Typical documents delivered to the registered agent of an LLC or corporation are ‘Service of Process.’

Service of the process includes the notification of a pending lawsuit, as well as any mail from the secretary of the state, such as annual reports and tax documents which are usually sent by the state and federal taxation authorities.

The registered agent or the statutory agent of an LLC can easily resign by filing a certificate of resignation within your state. In that case, you can change your registered agent by filing a change of agent form is available in your state.

No. While a member of an LLC and an owner of a corporation can become their respective registered agents, an LLC or a corporation can’t become the registered agent of themselves. State laws don’t allow companies with a totally similar name to become the registered agents of LLCs and corporations.