Estimated reading time: 2 minutes, 30 seconds

You probably know that starting a business requires an innovative idea, a solid business plan, and a funding source to launch. But, do you also have the Registered Agent ready to go? Do you need a Registered Agent?

What Is A Registered Agent

A Registered Agent is someone officially designated to be responsible for your business to handle any tax or legal documents. The name and contact information for this person, your agent, is filed in the jurisdiction that the company is founded, registering them to make it official.

Many states require businesses to have a registered agent, so when you incorporate, you should check. Still, even if it’s not required in the state in which you incorporated, it may be a good idea to have one. Since anyone can be listed as a Registered Agent, you can list yourself or your business, but there are many reasons that a third party may be a better way to go.

Benefits Of A Third-Party Registered Agent

A third-party Registered Agent means that there is always someone to receive important information even when you, as the business owner or officer, are not available. This means you can go to that conference, to a client meeting overseas, or maybe even take a vacation, and know that, if something happens that requires legal action, someone will be there to receive the needed documentation and notify you.

Having a third-party Registered Agent in the state you incorporate in means that you don’t have to incorporate in the state in which you reside. Many companies take advantage of generous business laws in states on the other side of the country, set their Registered Agent in that state, and continue to do business out of their house or office back home.

Using a third-party Registered Agent also protects your privacy. Whoever is listed as the Registered Agent is listed in the public record and can be identified by anyone looking to solicit services or snoop into the business. Listing an outside agency as a Registered Agent keeps your information just a little more secure.

Choosing A Registered Agent

Like many things related to setting up your business, having the right expert in the right position helps your business grow. A good Registered Agent will know which documents are mission-critical and which can wait until you’re available.

If your company is vulnerable to legal action, then it’s good to have a third-party Registered Agent available to intercept documents and keep an eye on proceedings. Other companies that don’t routinely file paperwork or run risks with legal action might fare well without one or act as their own Registered Agent, but then they assume the risk that they can handle whatever comes their way.

At some point in developing your business plan, you will want to consider whether the risk is worth the savings to forgo a Registered Agent, be your own Registered Agent, or hire an expert. While it’s not necessary, it could be vital.

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