Negosentro | Forming a limited liability company (LLC) or other type of business has become so easy that the process can be completed in minutes. A number of states have related laws that can prove especially attractive to entrepreneurs looking to establish their own businesses.
In just about every case, a newly formed LLC or corporation will need to be assigned an authorized, registered agent who actually resides in the state in question. That leaves many newly minted business owners wondering how best to satisfy this requirement. In most cases, though, it will be fairly simple to determine the most appropriate way to move forward.
The Importance of Establishing an Official Point of Contact
The question of whether to hire a resident agent or to proceed some other way crops up quite often when a new business is being formed. The simplest types of businesses, like sole proprietorships and partnerships, do not give rise to this issue, but most of the rest do.
The reason for this is that corporations and other types of companies are treated as persons under the law for certain specific, strategic purposes. They can own property just like individuals do, and can also be sued and held legally liable for negligence and other types of torts.
Not actually being real, live people, though, companies have definite limits. Actual human beings need to oversee, support, and staff businesses, and others must be able to recognize which ones are authorized to do so.
Most states allow non-residents to form businesses like LLCs in accordance with their laws. In every such case, an important part of the process will involve designating an agent who is authorized to receive legal services and other official communications. Registering the name and address of this agent with the state ensures that others will always be able to contact a business as needed.
Weighing the Options Appropriately
In some cases, it will be practical for a business owner to act as the registered agent for the company in question. In others, a consideration of issues like the following will reveal that hiring an agent will make more sense:
- Residency. The single most common and frequently dispositive reason to hire a registered agent is simply that the owner does not live in the state where the company was formed. For obvious reasons, states inevitably require that the individual registered as a company’s agent live within their borders.
- Privacy. The purpose of requiring the registration of an agent is to make that person’s name and address available to all. Choosing to personally act as the registered agent for a business will always have privacy-related implications.
- Efficiency. The types of communications that are normally directed at registered agents tend to be important. Companies that provide registered agent services to others are generally well equipped to accept and manage such documents and contacts efficiently.
- Availability. A company’s official, registered agent needs to be available throughout normal business hours. Having someone else take on this responsibility can easily be attractive and helpful.
An assessment of these four issues should normally reveal whether it will make more sense to act as a business’s registered agent or to pay someone else to do so. In many cases, the question of residency alone will make hiring a registered agent the only realistic option. In others, simply weighing the various pros and cons will make the better choice clear.