Comparing Registered Agents for Mid-Market Organizations: Generalists vs. Specialists
The registered agent (RA) your organization partners with can be a value-add – or a roadblock. The right RA will keep you organized, help you maintain legal entity compliance, and allow you to reclaim time lost to grunt work. The wrong one will pull your focus from the valuable work you were hired to do, offer limited insight into the status of your legal entities, and may struggle to keep you compliant.
The “right fit” RA will look different for every organization. Enterprise organizations may need to partner with a vendor that offers a full and varied slate of transactional legal services in addition to RA services. Small businesses with very few entities and modest growth plans may work best with a local RA that offers limited, specialized services.
For mid-market organizations, the decision about whether to partner with a generalist or specialist RA can be a little less clear cut. Below is an overview of each – and the criteria to consider when weighing your options.
Generalist Registered Agents
The well-known “traditional” RAs that dominate the national market are generalists that take a kitchen sink approach to compliance and risk management. In addition to offering RA and associated entity compliance services, these “big box” vendors provide a host of other loosely related, quasi-legal services, like eRecording, brand protection, global corporate trust services, and more.
These vendors have expansive national and international reach – which means they tend to offer less attentive service to clients. Because of this – and because they offer so many services – silos naturally exist. These silos can lead to lags (or breakdowns) in communication and can cause important tasks and information to fall between the cracks.
To compound these issues, traditional RAs rely on manual processes to complete work. While they may have client facing portals, they aren’t backed by software. That means critical information is shared and updates are made by humans who may not have insight into the full picture of your legal entities – and may fail to consistently act in a timely manner. The upshot is that critical mail is not always forwarded promptly, and visibility into the exact status of entities is low – which can ultimately compromise your organization’s ability to maintain compliance.
Specialist Registered Agents
Local RAs and digital RAs both offer clients a more specialized service than traditional RAs. While the exact scope of work can vary, both types of providers are focused solely on providing RA and closely related entity compliance and management services. Despite this similarity, their target clientele – and the way they render their services – varies greatly.
Local RAs are generally bound by state and cannot work with organizations with multi-state entities, or those looking to scale nationally or internationally. Therefore, they are not an appropriate fit for the majority of mid-market organizations.
Digital RAs, on the other hand, offer clients specialized service and attention, but with greater flexibility and geographic reach – most operate in all 50 states and the District of Columbia and some also support international entities. (A word of note: some legal entity compliance software vendors “offer” RA services – but ultimately outsource the work to national RAs. Make sure you read the fine print.)
Truly digital RAs leverage software to share correspondence promptly with clients and automate related entity compliance filings (including annual reports, business license and DBA renewals, etc.). Software eliminates the risk of silos – and creates a single source of truth that can give your organization greater insight and peace of mind that entities will remain compliant.
How to Pick the Right Registered Agent for Your Mid-Market Organization
The services rendered by traditional, generalist RAs may be sufficient for enterprise organizations that require a broad slate of services and have the internal resources necessary to actively manage their vendor. But, for small- or mid-market organizations that may not require niche add-ons and don’t have the capacity to oversee the work performed by their RA, a more specialized service is likely more appropriate.
If you are a mid-market organization looking to establish a relationship with a new RA, we recommend you:
1. Assess your needs: do you require a wide or more limited breadth of services?
2. Assess your growth plan: do you plan to scale nationally (or internationally) or intend to operate within a limited geographic area?
3. Assess your values: when it comes to legal entity compliance, how important are insight and transparency to your organization?
4. Assess your capacity: do you (and/or your staff) have the bandwidth to actively manage your RA or would you prefer to take a more hands-off approach to entity compliance?
5. Consider your budget: are you content to pay fines and fees related to non-compliance – and expend human resources handling grunt work?
6. Consider your peace of mind: are you content to have limited insight into the status of your legal entities – and potentially only unearth issues when something major arises?
Filejet is a digital registered agent that specializes in keeping organizations’ legal entities compliant through its combination of cloud-based software and service. In addition to streamlining the delivery of SOPs and other critical mail, our unique blend of software and service automates the filing of all U.S. and international annual reports, business registrations, license and DBA/fictitious name renewals and more – so you focus on the work you were hired to do.
