A business entity designates a registered agent to play a very crucial role in the company’s legal affairs and compliance with the requirements of operating in a given jurisdiction. A registered agent (also called a “resident agent” or “statutory agent” depending on the state) is an adult or authorized business that a company assigns to receive all official legal and tax documents from the state government.
The main purpose of a registered agent is to give a legal address within the jurisdiction where they can be reached during normal business hours to handle legal matters such as Service of Process (SOP) in the event of a lawsuit or any other pressing documents that need prompt action. It is the job of the registered agent to forward these important suits and notices to the business entity itself.
Registered agents are helpful to a business entity because it is often difficult for companies to keep track of any legislative changes in specific jurisdictions or monitor due dates for legal forms. So it is useful to assign someone to receive registered or official government mail for the business, including franchise tax and annual report forms. A registered agent can be anyone as long as they have a physical address (not a P.O. Box). Some businesses try to hit two birds at once by having their registered agent be the company lawyer as well.
Usually the registered agent of a business entity is assigned as the formation documents are filed for a given jurisdiction at the time the entity is first created. The consequences of neglecting to assign a registered agent can be very bad for a company. If a business never receives notice about a lawsuit or summons, a plaintiff could win the case by a default judgment with no one there to defend the business, which could result in potentially large monetary losses or other PR headaches for the business entity. When a registered agent fails to perform the duties necessary, a jurisdiction may revoke a business’ corporate or LLC status.
States may also give business entities (like SignatureFiling) permission to act as a registered agent for other businesses. This is acceptable so long as at least one of the officers of the business chosen to serve as registered agent is a resident of the jurisdiction. These registered agency businesses develop efficient processes for alerting companies whether their government filing status is in good standing or not.
Mandating a business entity to designate a registered agent is essentially a scare tactic from the state to protect a business entity from any possibility of its own negligence or ignorance in handling important legal documents. It is best for business entities to view this as a blessing and take care to designate the most trustworthy person or business entity they can to serve as registered agent.