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Should Your Registered Agent Be a Third Party?

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By Betty Wang, JD on September 18, 2013 9:34 AM

Should your registered agent be a third party?

First of all, what is a registered agent? It is the individual who is designated to accept legal documents served against your company when you're involved in a legal action. The registered agent for a small business can be an employee of the company -- or a third party, which is sometimes preferred. Usually, a third party registered agent is the business' lawyer or a separate service company.

All incorporated businesses need to have a registered agent. If you are considering hiring a third party to do this for you, here are some pros and cons to consider:

Pros

There are some advantages to having a third party be your registered agent. These include:

  • Being served. Your third party registered agent would be the one who needs to be served with legal paperwork, instead of you at your place of business. This way, you avoid disrupting the general work environment.
  • A separate address. A third party registered agent typically has his own separate address as your representative, and that address will be the one of public record and listed in most official public documents. This way, you can keep your legal correspondence separate from your general mailing address.
  • Keep track of deadlines. Commercial registered agents will have systems in place to help them keep track of the required deadlines and requirements you need to file in time. This can help you avoid penalties that are often coupled with missed required government filings.
  • Moving. If you retain a national registered agent service provider, you don't have to worry about finding a new one if you move. If your business is operating in multiple states or just planning on moving locations, you wouldn't have to worry about changing your registered agent's address.

Cons

While it's generally a good idea to have a third party registered agent, there are still a few drawbacks to consider, such as:

  • Money. Hiring a third party registered agent, especially if you decide to go with a commercial service or agency, is going to cost you money. If you're a penny pincher, think about whether it's worth the price.
  • Less control. Those who like to have full control over their business' affairs may want to be their company's registered agent. With a third party registered agent, you leave many aspects of your business in the hands of someone else.

Like all aspects of running a business, deciding on what type of registered agent is going to have pros and cons. Ultimately, it's up to you to decide what best suits the needs of you and your business.

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