If you’re new to starting a business, you may be baffled at the concept of a registered agent. Not only is this poorly-named term almost never explained to fledgling entrepreneurs, there is little mention of it anywhere in society at large.
Basically, a registered agent is a person who sits at a desk all day and waits for lawsuits on your behalf. Say what?
Since the bureaucrats of the Commonwealth of Pennsylvania are never to be outdone for their creative use of language, in our jurisdiction a registered agent is called a “registered office” or “commercial registered office provider.”
The Commonwealth wants to ensure that it’s possible for the public to contact the owners of a business if something goes wrong. If you operate a business, you are entering into the stream of commerce, and therefore must publicly avail yourself to be responsible for your actions. As tempting as it sounds, you can’t shield your business from legal liability by hiding its address. Kramer may have stopped his mail, but you can’t.
So, the government requires all businesses to officially state where people should send a “service of process” should there be something wrong. This can be a lawsuit, a deposition, or any other legal proceeding. Furthermore, this address is used for official correspondence from the Commonwealth of Pennsylvania. They will send you correspondence for things like the decennial report, certificates of good standing, and more.
You can act as your own registered agent, but keep in mind if you do this, you will need to disclose an address. Here are some reasons why you may want to outsource this to the professionals:
(1) You work from Home
Remember that a registered agent’s address is public record. Anyone can access the address and potentially send you solicitations, advertisements, or even show up at your door. When you use a registered agent, the likelihood that you receive unwanted advances will decrease. It also will keep you relatively safer, because you no longer have your home address listed as public. Keep the crazies out.
(2) You don’t have a physical business address
Let’s say you are operating a virtual business, which is a common phenomenon whereby there does not exist a single physical business headquarters (think digital tech nomad who runs a drop shipping business). A registered agent’s address must be a physical location that can receive paper mail, and a post office box cannot serve as a registered agent address.
(3) You don’t operate during normal business hours
A registered agent must be available during normal business hours to accept important documents. If you are coming and going throughout all hours of the day, or simply don’t like showing up to the office very often, you may miss a service of process (a document telling you that a lawsuit has been filed against you) which could cause you business headaches later. Having a registered agent do this work on your behalf guarantees that the documents will be collected and sent to you.
(4) You want to stay private
When a business is served with a service of process, it is delivered by an official person called a process server. Sometimes these people are local law enforcement officers. It can be an uncomfortable sight having the police come to a business office in front of customers or family members, so it’s best to keep those activities in the isolation of a registered agent’s office. Using a third-party to serve as your registered agent ensures the receipt of important communications are done privately.
Registered agents double as compliance officers for your business, because they often will provide you with reminders of when your annual filings are due, and even file on your behalf, allowing you to focus on running your business.
Just Get One
A registered agent is an indispensable tool when running your business. They keep your home or business address out of the public sphere (if that’s what you want), they operate during normal business hours, and they help you stay compliant. This typically costs around $50 to $100 per year and is a really easy thing to set up. Ask your ESQx attorney about this today.