What does a Registered Agent do?

A registered agent is a specific individual who is appointed to send and receive a variety of legal documents for a business entity. Business laws vary slightly from location to location, but the general function of the registered agent is fairly typical in most places, including jurisdictions inside the United States, Canada, the United Kingdom, and Australia. If a business is a party to a lawsuit, the service of process, summons, complaint, response and other legal papers will typically be sent to the registered agent, who is then responsible for alerting the appropriate business owners about the documents. In other cases, she is responsible for some of the annual maintenance of the business. For example, she may be responsible for reminding business partners to file annual reports, taxes, or other yearly documents with the appropriate state or federal agencies.

Depending on the size of the business, various people may be acceptable candidates for a registered agent position. If the business is owned and operated by only one person, that person may act as the registered agent. If the business small and owned by a few people, one of those owners, or one of the shareholders, employees, partners, or members, may work as an agent as well. Some business entities are much larger. In those instances, an outside, third party, usually at a law firm or a service company, may be the best choice for the agent position — although an internal member of the business may be used.

There are several benefits to designating a third party to act as an agent. For example, the registered agent’s name and address is publicly listed on all legal documents, including the documents setting up the business entity. By hiring a third party, it gives the business owners some sort of public anonymity and keeps workplace gossip to a minimum. For example, employees may wonder why a legal summons is being sent to a business owner, where those same employees would be unaware of any legal proceedings if the summons is sent to an off-site address. In addition, most third party agents have detailed filing systems that keep businesses informed on filing deadlines, thereby preventing late fees from accruing.

If a registered agent does not perform her job duties, it can be unfortunate for the business entity. For example, if a lawsuit is filed against the business and the owner is not made aware of the lawsuit in a timely manner, the plaintiff may win the case by default. In addition, many jurisdictions have penalties for companies who do not have an agent. In some cases, failure to maintain an agent can mean that the company’s legal status can be revoked or stiff fees can be assessed.