Why Do Small Businesses Need a Registered Agent?

What is a registered agent?

A registered agent is an individual or company that serves as your business’s official point of contact with the state. They receive and forward important legal and government documents, such as service of process notices, annual report reminders, state correspondence, franchise tax forms and other compliance materials.

Having a registered agent ensures you don’t miss critical paperwork or deadlines that could affect your business’s standing.

Who needs a registered agent?

Any business that registers with the state is required to have a registered agent. That includes corporations, limited liability companies (LLCs), limited partnerships (LPs) and limited liability partnerships (LLPs).

Sole proprietorships and general partnerships don’t need a registered agent because they’re considered “common law” entities; they aren’t registered with the state in the same way and don’t have the same reporting obligations.

How to appoint a registered agent

Most states require businesses to list a registered agent when filing formation documents. The process of choosing one can vary slightly depending on where you operate, but here’s how it typically works:

• Choose your registered agent: You can serve as your own agent, choose an employee to act as your agent, or hire a professional registered agent service. The person you choose must have a physical address in your state of formation (not a P.O. box) and be available during standard business hours.
• File with your state: When you form your LLC or corporation, list your registered agent on your Articles of Organization (for LLCs) or Articles of Incorporation (for corporations). Most states make this step easy with online filing through the Secretary of State’s website.
• Get consent: If you’re appointing someone else, obtain their written consent to serve as your registered agent. Several states require this documentation before your filing is approved.
• Pay your filing fees: State formation fees, which include your registered agent designation, typically range from about $50 to $500, depending on your business type and location.

How to change your registered agent

At some point, your business may need to switch registered agents. Perhaps you’ve moved or decided to work with a different provider. The process is straightforward and doesn’t take long to complete.

• Choose your new agent: Identify the individual or service you want to represent your business and confirm they meet your state’s requirements, including maintaining a physical address and being available during normal business hours.
• File the change form: Submit a Statement of Change of Registered Agent (or your state’s equivalent form) through the Secretary of State’s office. Many states allow you to complete this step online.
• Pay the filing fee: Fees are generally modest. Most states charge between $10 and $50 to process a change of registered agent.
• Notify your previous agent: Let your current registered agent know you’re making a change. You may need to wrap up any remaining details in your service agreement.
• Keep your records updated: Keep copies of all the documents you’ve filed, and update your business records to reflect the new agent’s information.

What are the benefits of using a registered agent?

A registered agent is more than a compliance requirement: They’re a valuable partner in keeping your business organized, private and in good standing with the state. Here are some of the main advantages of working with one:

• They protect your privacy during legal matters: If your business is ever served with legal documents, your registered agent receives them on your behalf. This prevents uncomfortable situations that could hurt your company’s reputation, like being served in front of employees or customers, and keeps your personal address off public records. The agent accepts the documents, organizes them and forwards them to you privately so you can respond appropriately and on time.
• They serve as your official point of contact: Registered agents receive and forward important legal notices, annual report reminders and other state correspondence to ensure your business remains compliant. They also help keep your mailbox and your personal address clear of unsolicited mail.
• They ensure you never miss important paperwork: If you travel frequently or operate outside your state’s time zone, a registered agent ensures your business remains reachable during standard business hours. For an annual fee that typically ranges from $50 to $300, depending on your state and provider, they’ll handle official deliveries and help you stay on top of filing deadlines.
• They make it easier to expand into new states: While you can act as your own registered agent in your home state, you’ll need a local agent if you register your business elsewhere. Professional registered agent services have nationwide networks, making it simple to stay compliant as your business grows across state lines.

Who can be a registered agent?

A registered agent can be either an individual or an organization authorized to operate in the state. Many business owners appoint corporate officers, directors, attorneys or certified public accountants (CPAs), while others choose to work with a professional registered agent service (or take on the role themselves).

To qualify, a registered agent must meet a few basic state requirements:

• Have a physical street address in the state (P.O. boxes don’t qualify).
• Be available during regular business hours to receive official documents.
• Be a resident of the state where the business is registered (if an individual).
• Be at least 18 years old.

These requirements ensure that important legal and government documents always reach a reliable contact who can handle them promptly and securely.

Can I be my own registered agent?

Yes, if you meet your state’s requirements. Many small business owners choose to act as their own registered agents, especially when they’re just starting out and want to minimize startup costs. However, there are trade-offs to consider before taking on the responsibility yourself.

Serving as your own agent means:

• You must list a public address for official notices.
• You’re required to be available during business hours to receive time-sensitive documents.
• You may have to handle unexpected legal or government correspondence in person.
• You’re solely responsible for tracking and meeting filing deadlines to stay compliant.

These responsibilities can quickly become stressful, particularly if you travel often, work remotely, or run your business from home.

According to the U.S. Small Business Administration, hiring a third-party registered agent can help ensure compliance and reduce administrative burdens. Professional agents are reliable, stay current on changing regulations, and keep your legal correspondence organized.

What happens if my business doesn’t have a registered agent?

If your business is registered as an LLC or corporation, state law requires you to have a designated registered agent. Skipping this step can create real problems, such as:

• Your business could be dissolved by the state: Without a registered agent, the state can administratively dissolve your company, which means you lose the legal right to operate under that business name.
• You could miss important legal notices: If your company is sued or receives official documents and no one is there to accept them, you might not find out until it’s too late to respond.
• You may face fines and penalties: Many states charge annual penalties — often between $200 and $1,000 — for failing to maintain a registered agent.
• You risk losing your good standing: Falling out of compliance can hurt your reputation, limit your ability to apply for financing, or stop you from entering contracts with vendors or partners.

In short, appointing a registered agent isn’t just a legal box to check: It’s a safeguard that keeps your business legitimate, informed and ready to grow.

Jennifer Post contributed to this article.