Organizations of all types – from startups and nonprofits to established businesses – must contend with licensing and registration challenges as they expand. These pros can facilitate the process for you.
The first line of legal defense for any business is its registered agent. When state agencies, courts and process servers need to contact the business, they will do so via the registered agent’s physical address. In turn, the agent forwards the documents to the business, giving the appropriate parties enough time to respond.
Business entities must appoint a registered agent in each state where they conduct affairs. Generally, the registered agent may be an individual or a service provider. However, businesses that register in multiple states or have multiple entities quickly turn to a professional registered agent service for representation.
Not every registered agent service provider is the same. A simple web search turns up dozens of options, each with seemingly similar services and varying price points. A top-tier registered agent will not only forward documents reliably, but will also offer various services, software and tools to support the business as it grows.
To make choosing a registered agent easier, consider these additional factors.
Most registered agent providers offer service either nationally or in single states or regions. Choosing a nationwide registered agent provider is generally more efficient and cost-effective in the long run.
With offices in every state, nationwide registered agents automatically help their clients meet the requirements throughout the country. This eliminates the need to search for and manage multiple vendors as the business expands to new states.
And, with a national registered agent, the business can expect consistent service across states (and even entities), which reduces the risk of missing a crucial document delivery.
Registered agent providers usually bill their clients on an annual basis. For that fee, the business retains the right to designate the provider in state records. In turn, the provider receives legal and government notices and forwards them to you. From there, what you pay — and the value you get — greatly varies.
Be wary of paying too much or too little for service. When reviewing registered agent service providers online, you’ll find prices ranging from “free” or $39 to over $300 per year.
Like your business, registered agent providers have costs associated with maintaining offices, staff and processes to receive and forward documents. All too often, deeply discounted agent rates are accompanied by annual rate hikes, hidden fees for document deliveries and questionable service levels.
On the other side, extremely high annual fees don’t necessarily make sense for the average small or medium-sized business, nonprofit or professional services firm. These organizations often need an agent to meet state requirements and grow — and would prefer to pay a moderate rate.
Client Portal and Software
Not all registered agent services offer your business the same level of technology. For example, when the agent receives a document, how are you notified? Believe it or not, some registered agents still mail documents to you, reducing the amount of time you have to respond.
To avoid missing a delivery, look for a registered agent service that electronically forwards documents to you and notifies the appropriate parties by email. Ideally, the agent will have a centralized portal to allow you to customize notifications to suit your needs.
As your business grows, you’ll need a registered agent in each state. When you’re vetting vendors, ask how easy it is to add new services. Can you quickly do this online?
Finally, a top-tier registered agent also provides technology to help your business navigate the rules and requirements of each state. With varying annual report deadlines in each state, your agent should send you accurate filing reminders (since many states do not). And if you need additional services to register or maintain good standing, the registered agent should offer to handle those filings for an additional fee.
Making a Change
Whether your business is well-established or is just starting out, now is a great time to review your registered agents. Each state has a searchable database of registered business entities. You can quickly look up who your business’s agent is in minutes. The results may surprise you, especially if your business operates in multiple states or has been around a long time. You may find service providers you don’t work with anymore, individuals no longer affiliated with your business and other outdated information.
Thankfully, this is easy to correct. Registered agent appointments are made in state records, which means you need to file a change form (and usually a modest fee) to update its information. Most registered agent service providers are happy to assist you with the change forms as an added service. They offload the paperwork, facilitating the process of consolidating your representation with a single vendor.
Harbor Compliance does not provide tax, financial or legal advice. Use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.