Why is a Registered Agent required when starting a business in USA?

What is a Registered Agent? 

A registered agent is a person or entity designated to receive legal documents and other necessary correspondence on behalf of a business. This includes documents such as lawsuits, subpoenas, and other legal notices. The registered agent is responsible for receiving these documents and forwarding them to the appropriate person within the business. The registered agent is also responsible for receiving other important correspondence including tax notices and annual reports. Most states impose specific availability requirements on registered agents, who must be open to accept service of process in the state every business day, during regular business hours.

Why is a Registered Agent required

Every state requires businesses to have a registered agent in the United States. The purpose is to ensure a reliable and consistent point of contact for legal and other important correspondence. This helps to ensure that businesses are aware of any legal issues or other important matters in a timely manner. In most states, the failure to properly designate and maintain a registered agent will result in the dissolution of the business.

Can I be my own company‚Äôs registered agent? 

Although a company owner may serve individually as a registered agent, there are a number of benefits to using a corporate or institutional registered agent. These include: 

Maintaining a Physical Address in the State

In order to serve as a registered agent, the person or entity must maintain a physical address within the state where the business is registered. This address is used as the official point of contact for legal and other important correspondence. If the company is registered to do business in multiple states, or if the owner lives in a state other than the state where the company does business, then an institutional registered agent must be appointed. 

Providing Privacy and Protection

By appointing an institutional registered agent, businesses can maintain a level of privacy and protection. The registered agent’s address is the official point of contact, meaning that the business owner’s personal address is not made public. This helps to protect the business owner’s privacy and reduce the risk of unwanted solicitations. 

Ensuring Delivery

If the business owner lists themselves as registered agents and then travels out of state, important documents may go undelivered. If this absence is prolonged, such that service on the company cannot effectively be accomplished, the company may be subject to harsh penalties, such as default judgments or dissolution.