What is a Registered Agent?
Let’s begin with a brief explanation of an agent and what an agent does. According to Blacks Law Dictionary, an agent “is a person authorized to act for or in the place of another; a representative.” There are numerous types of agents such as apparent agent, general agent, listing agent, and registered agent, among others.
The registered agent definition explains that the registered agent is “authorized to accept service of process for another person, especially a corporation, in a particular jurisdiction.” It’s not just corporations, but limited liability companies need a registered agent, too.
Why does it matter?
Having a registered agent is required in most states for a plethora of good reasons. For starters, a registered agent receives legal notices and often indicates where the government can send tax bills. A registered agent is usually published, making it easy for people to know how to get in touch with the company. The most important reason why it’s important to have a good registered agent is so plaintiff’s know who is authorized to receive service in a lawsuit.
When a lawsuit occurs, usually defendants have 30 days to respond, sometimes less. If your company is hit with a frivolous lawsuit or charged legitimately through a civil complaint, it needs to be addressed quickly. Imagine how frustrating it would be to learn about a lawsuit after a week has passed. Many business owners have interviewed law firms down to the last day in order to secure proper representation, which places tremendous stress on the lawyers (and the fees for those lawyers).
In short, it’s best to have a responsible registered agent who will not let unnecessary delay derail proper responses to legal proceedings.
How to Save Money?
Saving money in the early stages of a business is often a good idea. If you fall into this category, then consider serving as your own registered agent or finding an affordable alternative. While there are sometimes advantages of outsourcing registered agents, it’s not always advisable.
If you want to save money early on, a great option is to be your own registered agent. More often than not, it is known that you are the owner anyway, plus you’ll save hundreds of dollars each year if you are your own agent (go look at the pricing structure of LegalZoom and its competitors – they take your credit card information and charge it yearly…letting you know in the fine print they are billing you over and over and over and the rate is “subject to change”).
Many of our clients are their own registered agent. You will get junk mail but otherwise you’ll also be the first to know about any important information pertaining to your business. It’s not a bad trade-off. One limitation is if you are out of the state where you are registered, then you will need a registered agent within the state.
The definition of registered agent instructs business owners to have a registered agent to accept service of process for a legal proceeding. It does not indicate business owners need to hire someone else to serve as the registered agent or that a lawyer needs to be involved. The best way to save money on legal fees in the early stages of business is to serve as your own registered agent. You can always change agents later.
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