When you were forming your business, you probably heard the term “registered agent” tossed around. During that time, you probably also asked yourself, “Why do I need a Registered Agent?” Although Registered Agent service can go unexplained or overlooked, it is a very crucial component of maintaining your company. 

Let’s answer why you need a Registered Agent by breaking down their 3 most common requirements and responsibilities.

1. Location. Nearly every state requires that you maintain a Registered Agent that is physically located within the state of your corporation or LLCs state of creation or formation. For example, if your LLC was formed in Delaware, your Registered Agent cannot be located in Maryland. Your Registered Agent’s Registered Office must be in the state of your company’s formation.
2. Duties. Your Registered Agent is required to forward you all legal documents, state notifications, state fees, and state tax notices. Examples of these documents may be: Service of Process (lawsuits), Annual Report Notices, State Announcements, Annual Tax Notices, State Fee Late Notices, Company Status Notifications, and so on.
3. Availability. Because many of the above mentioned documents are extremely time sensitive, your Registered Agent must always be available during common business hours, Monday through Friday. For this reason, your Registered Agent must also be a physical person with an actual location – PO Boxes will not be accepted as Registered Agent’s Registered Office by any state.
4. Privacy. Your Registered Agent’s address is public record. This means that if you were to use your own address as the Registered Agent’s address, the public can access that information. Maintaining a separate Registered Agent other than yourself provides privacy and protection from unwanted parties finding your address.

Keep in mind that you can still incorporate your business in any state. American Incorporators offers a nationwide network of Registered Agents that are available to represent you in any state. A Registered Agent is there to make sure you receive all notifications in a timely manner. Essentially, your Registered Agent’s main purpose is to make maintaining your business a little easier for you.

These articles provide great highlights regarding Registered Agent service.

Being Your Own Registered Agent Can Be Risky

Maintaining Registered Agent Service & Other Compliance Tips

If you have any questions about Registered Agent service, feel free to post them below. Don’t forget to visit our Learning Center, where you can find more overviews of Registered Agent functions and requirements.

“Where do I incorporate?” is a question that our incorporation specialists answer on a daily basis – and it’s a very good question to ask.

The fastest answer is “it depends.” When you’re deciding to incorporate your business, there are many things for you to consider. We’ve compiled these 3 important questions for you to ask yourself when deciding what state is best for incorporating your business.

• Where will you be conducting business?

We recommend incorporating your business in the state where you will be handling the majority of your business transactions. For example, if you live in Connecticut and will be conducting your business primarily in Connecticut, we would suggest Connecticut as your state of incorporation. Keep in mind that this is not a requirement, but is highly recommended to avoid any possible complications.

• Where do you plan on opening your business bank account?

Some banks may require that your business be incorporated or qualified (defined here)  in that bank’s state. So, if you’ve incorporated your business in Texas, but you try to open the bank account in Oklahoma, your bank may deny your request to open a business bank account. This is not always the case. It is best to review this with your bank of choice prior to incorporation. Try asking them if they require you to be incorporated or formed in that state in order to open a bank account.

• Are you familiar with the desired state of incorporation’s annual compliance requirements?

Nearly every state requires corporation and LLCs to pay a variation of an annual fee in order to keep your company in good standing. The name of this fee varies by state, but may be referred to as “Annual Report,” “Franchise Tax,” or “Annual Registration.” The following components of the annual compliance may vary as follows:

Price. Some states have annual fees as low as $9, while others can reach upwards of $500.

Due Date. Certain states only require you to file once every 2 years, while others require a yearly filing. You’ll find that the actual due date can vary from a specific date or month, to simply the anniversary of the company’s incorporation.

Filing Options. Many states are offering online filing options, but some states still require reports to be sent in through mail.

Our State Specific Information section is a great resource to find thorough information regarding incorporation requirements and annual report information. If you do your research and ask the necessary questions, you’ll successfully incorporate your business in your state of choice. These inspirational articles are great examples of entrepreneurial success across the nation:

John Pepper’s Boston Burrito Empire

Chicago Cupcake Makeover Success

Don’t hesitate to ask any questions or share your incorporation success story!

Over the next week, we'll focus on helping you understand the basics of company formation. Before you start your business, it's best to have the business become legally recognized by the state through incorporation or formation. Today, we'll do a quick overview of 5 important things to consider during LLC creation. 

An "LLC" or "Limited Liability Company" is a legal entity created by filing the appropriate certificate with your selected state of formation. This entity has "Limited Liability," which helps to separate your personal assets from your business liabilities. 

Here are 5 Important Things to Consider During LLC Creation: 

1. LLCs do not issue stock. Stocks are specific to Corporations - a different type of business entity that offers different benefits.
2. An LLC is a "pass through" tax entity. It is taxed like an "S" Corporation, where the profit or loss generated by the business is reported on the personal income tax return of the owners.
3. LLCs are typically owned and managed by the members of the LLC. On a related note, LLCs have members and managers, not officers or directors. Officers and directors are specific to Corporations.
4. LLCs are not required to create or maintain by-laws, but instead use an Operating Agreement. Operating agreements are set up internally within your company, and structure how you handle your business.
5. LLcs are not required to hold annual meetings. This provides more flexibility and offers a benefit if your members are located in varying distances.

Keep in mind that these are brief points and that there is much more involved when creating an LLC. You can learn more in our Learning Center.

Corporations are another type of business entity that may work best for you. If you'd like a quick overview of the differences between Corporations and LLCs, you can download our free Fact Sheet.

These articles from Inc.com also share some great points about what to consider when creating an LLC:

• More tips on determining if an LLC is best for your business 

• Tips for setting up an LLC Operating Agreement

What have you found helpful when setting up or managing your own LLC?