Attention any organization with aspirations beyond local borders: the role of the registered agent is something you need to know about. It serves an important function in cross-jurisdictional operations, ensuring your entity can receive legal and other official correspondence.

The registered agent is a person who maintains a physical address and is available for contact during regular business hours – that’s a real-life, actual human, not a P.O. box or an email address, but someone who can sign for correspondence. The registered agent role is so important, it is mandated by law in many jurisdictions to ensure companies can be contacted at any time during business hours.

Without a registered agent, organizations risk being in the dark about their entity status, and could be issued legal and state documents without their knowledge.

What does a registered agent do?

So, what is a registered agent, and what do they do? The registered agent’s primary function is to provide a physical space with a human presence that is available to accept official notices and service of process, and to notify the responsible parties if any legal documents arrive. They must maintain office hours from 8am to 5pm, Monday to Friday, and meet whatever other conditions are stipulated by the jurisdiction in question.

Whether they are a business or an individual, the registered agent handles entity documents such as:

  • Compliance notifications or documents
  • Subpoenas for information
  • Process notices
  • Tax notices from the IRS and local tax authorities
  • Corporate filing notifications
  • Wage garnishment notices

The registered agent is generally used so that an organization does not miss any important mailings of information that may have to do with lawsuits, taxes, judgments and so on.

Why do organizations turn to a registered agent?

In short, organizations turn to registered agents because it’s a requirement in most US states. Businesses formed within a US jurisdiction must have an official contact in the form of a registered agent, and this contact will be the person with whom the state communicates all important filings, as well as any changes in organizational requirements.

If you plan on expanding your organization into another state, you must have a registered agent who is legally incorporated and/or a resident in that state and has a physical business address there. The same goes for international expansions – if your legal HQ is in, say, Delaware and you want to start operating in Amsterdam, you’ll need to explore both the Dutch requirements around registered agents as well as appointing a local representative to act on behalf of your organization in official matters.

Some registered agents provide additional services beyond merely handling correspondence and official notifications to give added value. Regardless of whether you use the registered agent for these added extras or just for the agent role, they can provide both security and privacy – it means you won’t have to accept potentially embarrassing legal and tax documents in front of clients, and it means your business or personal address won’t be part of the public record.

Is a registered agent necessary?

Whether you already use a registered agent in your jurisdiction of incorporation, it’s likely you’ve been told you’ll need one as soon as you start to operate in another jurisdiction – and by “jurisdiction,” we mean either another country or another state, as many states (especially in the US) operate under their own legal framework.

Given that a registered agent is used to ensure due process can be served, and that the registered agent serves as an official point of contact between your organization and the state, not using one does put your organization at a disadvantage. Acting as your own registered agent means that you must maintain regular business hours throughout the calendar year so that the organization is always available for official business.

If you choose not to designate a registered agent, you run the risk of non-compliance in the jurisdiction in question, which can lead to larger compliance and governance issues:

  • Your organization may not receive legal documents, such as notices to file or court summonses, in time. This could lead, for example, to your company being sued without your knowledge.
  • You risk losing your good standing with the jurisdiction, without which you may be prevented from bringing a lawsuit of your own, expanding to other jurisdictions or obtaining financing.
  • Authorities could even administratively dissolve your company if you lose your good standing in that jurisdiction. You would then need to re-file formation documents to have your company re-registered, but in the interim, you would lose the protections of a registered company and could be held personally liable for any company issues.

Remember, certain jurisdictions mandate the use of registered agents under certain circumstances, so it’s important to check with a local expert before embarking on explorations for a potential new market.

What is the registered agent’s role in entity management?

The registered agent is often a paralegal with experience in executive administration and will perform such duties as filing business forms and local licenses, tax permits and other documentation to maintain corporate compliance in that jurisdiction. In this sense, they become a crucial part of the organization’s entity management team.

This is a role that is more than a friendly face with a physical address; the registered agent helps to keep the entity running smoothly and compliantly by dealing with entity documentation and ensuring the corporate record is kept up to date. They can reduce the risks and complexities involved with corporate compliance filings and improve compliance management to help avoid costly penalties and delays in production brought on by late or incomplete compliance filings.

Not only that, the registered agent can take the burden of document retrieval and data searches away from the in-house legal team. By handling some of the more manual and repetitive tasks involved in corporate compliance, a registered agent’s services can help to free up the corporate secretary and legal operations teams to start playing a more proactive and strategic role in governance and compliance.

How entity management technology can facilitate collaboration with a registered agent

What is a registered agent, then? It is an essential partner to your corporate compliance processes, and a way to enable your in-house team to be more strategic. But to do this effectively, the registered agent needs access to your entity data – and they need to know that the information they have access to is the most up to date it can be.

This is why many registered agents work with organizations through entity management software (EMS). These platforms help to streamline processes, getting the right information to the right people at the right time.

Entity management software, such as Diligent Entities, can benefit the registered agent’s role by:

  • Creating on-demand documentation
  • Enabling data reconciliation with state and local records
  • Providing annual report calendars and processing services
  • Helping with SOP notices and garnishments
  • Filing change-of-agent forms and receipt processing

Entity management software creates a single source of truth for the corporate record, as well as a central repository for the registered agent to file any entity documentation, notices and so on that they are dealing with.

Diligent Entities drives compliance further by integrating seamlessly with Diligent Boards and a secure file-sharing platform to create the Governance Cloud, an all-in-one governance ecosystem that makes working with third parties, such as a registered agent, much easier and more secure. Get in touch and request a demo to see how Diligent’s suite of compliance and governance technology can help your organization to stay in touch and in compliance.