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Do You Need A Registered Agent as a Corporation?

Do You Need A Registered Agent as a Corporation?

When creating a business entity, there is sometimes confusion as to what is required when appointing a registered agent. Any person who engages in the creation of a limited liability company, corporation, or other entity to do business in a State must appoint a registered agent for that business entity. The designated agent’s name and his or her address must be clearly noted on the entity’s formation documents filed with the State in which it seeks to do business. Let’s take a closer look at why you need a registered agent!

Here’s Why Your Business Needs A Registered Agent

States mandate that business entities seeking to do business within their borders must designate and document the name and address of a chosen registered agent within the State. For new entities, this is done at the time of formation; for existing entities looking to do business in a new State for the first time, it is done at the same time they file for authorization to do business in the State. The registered agent’s business address is often referred to as the registered office, and serves as the entity’s formal and legal “presence” within the State. Requiring businesses to have a “presence” in the State is important for several reasons. For example, when an entity must be sued for claims arising out of its business dealings in the State, the registered agent is the person on whom the summons and complaint that initiate the litigation may be served. Important Federal and State business, tax, and other business and legal records and communications may also be mailed to the registered agent.

Once such documents are received, the registered agent is obligated to forward the same on to the appropriate entity representative, which is typically the business entity owner or manager. Despite the differences in the structures of limited liability companies versus corporations, both types of entities are required to appoint and document a registered agent in every state in which they are registered to conduct business.

Eligibility to act as a registered agent

Eligibility requirements for registered agents differ between states, although the same fundamental rules apply to registered agents in every state. All states require that the registered agent be a minimum of eighteen (18) years old and maintain a physical street address in the state in which they serve as such. Therefore, a P.O. box will not meet this criteria. The registered agent must also be able to present himself/herself at the documented physical address during regular business hours for service to be completed and valid.

An entity can be selected to serve as the registered agent; however, a limited liability company or corporation cannot serve as its own registered agent. It should be noted that the majority of states do permit an employee or even the business entity owner to serve in this vital role. In some cases, business entity owners will opt to serve as their company’s registered agent to ensure all important legal documents are served directly to them as opposed to relying on the diligence of a third-party recipient, thus possibly delaying transmission of critical information.

Be careful when selecting a registered agent

Being a registered agent is a two-tiered responsibility. Merely accepting legal documents on behalf of your business entity is only the first tier of the registered agent’s obligations. The second tier is the timely delivery of received information to the proper representative of the business entity, be it the managing member or corporate officer, director, or other authorized agent. For example, if the registered agent does not timely forward important litigation documents, the business entity that was supposed to be served with those papers may be prejudiced in the court proceeding.

Registered agents play a key role in the communication hierarchy of any business entity. When chosen wisely, the business entity is free to focus on development and productivity rather than missed communication and debilitating litigation.

Fein, Such, Kahn & Shepard, P.C. is a registered agent you can trust

If you are planning on starting a business or already have one, you need a registered agent! Be mindful of the state requirements and eligibility guidelines when appointing someone to this critical role. Our legal team has extensive experience as registered agents. We are able to offer our firm’s services as an experienced registered agent and are fully equipped to represent your interests in accordance with the law. Contact Alan S. Golub, Esq. to find out more about why you need a registered agent.