Everything You Need to Know About Registered Agents
If you’re looking to establish a relationship with a registered agent (RA) for the first time – or are ready to switch from your current provider – you may be wondering about the options available and what type is right for you.
In recent years, digital RAs have gained popularity, and desire for information about this ascendant service is on the rise. Below are answers to some of the most common questions we receive about traditional and digital RAs.
What Is a Registered Agent?
Also sometimes referred to as a resident agent, service of process agent, or statutory agent, an RA is an appointed individual, organization or law firm that receives all legal correspondence (including service of process) and other official entity, tax and state mail on behalf of an LLC or corporation. RAs also file all annual reports and renewals of business licenses, registrations, DBAs, etc.
RAs are often external to an organization, but the role can be conducted internally. If an organization uses an external RA, the RA is expected to accept (and forward) all service of process and mail to you promptly as well as to notify you of upcoming filing deadlines.
Do I Need a Registered Agent?
Yes: LLCs, corporations and other business entities formed in the each of the 50 states and District of Columbia are legally required to have an appointed RA.
Whether you serve as your own RA or appoint a third-party, the following criteria must be met:
- RAs must be physically located within the state where legal and official documents are served
- RAs must have a permanent, physical address where mail can be delivered (not a P.O. box) – if you work from home and serve as your own RA, you will need to list your home address (not preferable for all)
- RAs must be physically available to receive mail throughout the year during normal business hours
- RAs often handle sensitive documentation (including summonses); if you act as your own or organization’s internal RA, you could be served in front of customers or employees, which you may not want
Due to these criteria, many organizations prefer to use an external RA service to handle legal and other official mail on their behalf. Furthermore, external RAs can help organizations save time and many – but not all – have deep knowledge of entity compliance matters, which can be an asset to organizations unfamiliar with the intricacies of entity compliance.
What Kinds of Registered Agent Services Are Available?
Several types of RA services exist, including:
National Registered Agents
A handful of well-known, well-established players dominate the RA market. These “big box” RAs are generalists who provide a laundry list of quasi-legal services in addition to RA services. Though they check all the boxes, they are often criticized for being unresponsive, unreliable and overpriced. Reasons cited are that they are difficult to get answers from, they often don’t conduct the filings you pay them to do, they are not proactive in general, and their billing is difficult to understand.
Local Registered Agents
Many smaller RA service providers exist to fill in the gaps left by traditional, big box RAs. These providers are usually specialists who only provide RA (and closely related) services and generally offer more focused attention to clients. Most of these providers are state-bound and do not have nation-wide reach, which means they aren’t a match for organizations that operate (or plan to operate) in multiple states.
Outside Counsel
Some organizations use outside counsel to serve as their RA, but this is fairly uncommon. While lawyers who provide RA services have the advantage of deep legal knowledge, their expertise generally comes at an exorbitant cost.
Digital Registered Agents
Like the name implies, digital RAs offer their services digitally through a combination of software and human service.
What Is a Digital Registered Agent?
Digital RAs leverage software to notify clients of upcoming deadlines and other related correspondence, to show filing status, to store documents, and to share legal and other official correspondence they receive with their clients. Mail received on behalf of their clients is often uploaded to a portal, where clients can view it and take action. The majority are equipped to serve as an RA for corporations with entities in any of the 50 states and District of Columbia – and some also support international entities.
Some claiming to be digital RAs are really just software with automated alerts and make it difficult to speak with anyone. Some specialize in RA services – and related entity compliance – services, while others offer more generalized legal services in addition their RA services.
What’s the Difference Between Traditional & Digital Registered Agents?
Digital RA services are rendered electronically, so they are inherently more transparent than those offered by traditional RAs. It’s also easier to monitor the work done by digital RAs. Because of this, corporations that work with digital RAs enjoy several advantages, including:
- Entity status is always available
- Mail is delivered faster through the software
- Documents are organized and easily accessible
- Organization charts are included
- Team members can be granted access on a per entity basis
- Billing is clear and straightforward
- Services are often more cost-effective
- Entity compliance issues will be rare
- Minimal time will be needed from you to ensure entity management compliance
Should My Organization Work with a Traditional or Digital Registered Agent?
Not all RA services are created equally – the RA your organization chooses to partner with can be either an asset or hindrance. The right RA will help to reduce risk and foster greater peace of mind.
If your organization operates in multiple states, has more than 5-10 entities, wants to scale, and values transparency, ease of use, and time savings, a digital RA will likely be your best bet.
Filejet is cloud-based entity management software combined with service. In addition to promptly uploading all SOPs and other correspondence to Filejet, 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 can spend more time on higher value work.