Why Small Businesses Need Registered Agents

Recently, I was asked what makes registered agents so valuable to small businesses. I’m always happy to answer this question because I know entrepreneurs have a lot on their plates when they first start their business. After they incorporate, they must register for trademarks, obtain employer identification numbers (EINs) and doing business as names (DBAs), and file for relevant business licenses.

Registered agent working with small business owners

Somewhere in the midst of that compliance to-do list is finding a registered agent. Entrepreneurs have the choice of acting as their own RA or working alongside a third party that represents them. Either option is perfectly acceptable — so long as you have a registered agent for your business.

Why does it matter to have an RA and what can having a registered agent do for you? Let’s take a look at the critical role they play as your small business liaison.

Registered Agents, Defined

What is a registered agent and what does someone in this role do?

Small businesses that have incorporated or formed an LLC designate a service of process for their companies, in the event of a summons or lawsuit. Registered agents act as impartial receivers to these legal notices. They may be individuals or a third party, so long as they have been designated to accept official documents on behalf of the business. In order to act as an RA, a registered agent must also have a physical street address and be available during general business hours to accept documentation.

Why Do Small Businesses Need Registered Agents?

Registered Agents Help Businesses Stay Organized

At first glance, a registered agent’s duties may seem fairly straightforward. They accept official documents on behalf of a business. Sounds easy enough. Couldn’t everyone do it?

Acting as a registered agent is a role often misunderstood in business. Registered agents are actually the gatekeepers between your business and the state. They accept documents from the state that may include but are not limited to franchise tax forms, annual reports, and renewal reminders.

Once they have the documentation, an RA organizes the paperwork and separates any time sensitive items from the rest. These carefully organized documents are then passed along to the business owner. With their help, you’ll feel confident knowing that the business is organized and on track with its required paperwork and will remain in compliance with the state.

Registered agent helps you manage your business better

Registered Agents Provide Added Privacy And Security

This is particularly true for entrepreneurs that decide to use a third party registered agent service. Working with a third party RA allows small businesses to better maintain their privacy and security. You can rest easy knowing that unwelcome guests will not show up at odd hours to your business (or worse, your home!) and serve you with personal paperwork in front of everyone.

Instead, they’ll serve your registered agent. An RA accepts these documents on your behalf since their name and address is provided on public documents. This ensures you have an added bit of privacy. If there are any legal matters to discuss, the RA will discretely discuss it with you at a later date. This allows you to remain focused on your work while the RA acts as your confidant.

Working With An RA = Peace Of Mind

What else can an RA do for you beyond organizing your confidential paperwork and providing layers of privacy and security to the process? How about offer up some peace of mind?

Registered agents keep business owners updated on any requirements from the state. This allows small businesses to maintain their good standing with the state. Even if the state you do business in does not require a designated registered agent (which may be a bit unlikely as nearly every state does for LLCs and corporations), you may want to have one on hand simply to maintain your records and peace of mind.