I have many conversations about registered agents with my clients. Many people seem to think that they are required to have a registered agent, mostly because many of the DIY sites insist on adding a registered agent to the list of fees to form a business. But what’s a registered agent and do you actually need one? A registered agent is an entity (normally a company) which can take service of process on your company’s behalf. Service of process occurs if your business is sued. People have seen it on TV where the person knocks on the door, asks if John Doe is there and when the person responds, I’m John Doe, they’re handed an envelope with the words “You’ve been served!”. Overly dramatic yes, but more often service is also done via the mail, especially for businesses.
Why would you need a registered agent? Because you do not have an office in the state where you are a registered business. If you create an entity in Delaware, chances are you do not have an office there. Therefore, Delaware requires you to have a registered agent if you do not have a physical presence in Delaware. Here in New York, it’s also a similar circumstance. Don’t have an office in New York? You need a registered agent. However, if you do have a physical presence in New York, you do not need to have a registered agent. True, there are other reasons to have registered agent. If you are seeking true anonymity in your business, then it might be a good use of money to hire a registered agent. Many sites use the threat that you won’t receive your service timely if you don’t have an agent, but if you’re operating normally and receiving mail regularly you shouldn’t be worried by this. Most of our clients have no such issues and find themselves paying for a service that they truly do not need. And worse yet, it’s set up to auto-renew and it’ll cost you to change the status with the Secretary of State’s office to remove them from the filing. So, just like everything else, the question ‘Do you need a registered agent?’ is answered it depends. Feel free to ask before you make the choice, it just might save you some money.