We know budgets are often tight for startups. Right now, as you prepare to launch a new business, you’re probably asking yourself where you can cut costs. Unfortunately, as you’ll figure out, having a Registered Agent is not an area you can avoid.
In fact, just about any limited liability company (LLC) or other business in the United States is required by law to have a Registered Agent on file. But how much does a Registered Agent cost, and what do they even do?
Here are some things you need to know before choosing a registered agent.
What is a Registered Agent?
Before you can select the right Registered Agent, it helps to know what their function in your company is. Essentially, your Registered Agent is the individual or business serving as the designated recipient of your business’s documents and correspondence.
Even if you haven’t heard the term “Registered Agent,” you might have come across a number of other names this position goes by. Here are some of the most common:
- Commercial resident agent
- Statutory agent
- Agent for service of process
- Resident agent
What are a Registered Agent’s Responsibilities?
Your Registered Agent serves as your company’s main collection point. And because official business documents are often time-sensitive, your Registered Agent needs to remain active, ready to receive your mail and take action when needed. This could mean simply signing for an important delivery or forwarding it on to your office for further discussion.
Here are just a few examples of the documentation that your Registered Agent may be responsible for:
- Any state and federal government correspondence, information or notifications
- Tax forms, invoices and other financial documents
- Service of process notices, such as those tied to legal notices or court appearances
- Outstanding requests to finalize unresolved reporting, permitting or other company filings
Is a Registered Agent Really Necessary?
Without a Registered Agent, you’re gambling with your company’s future. Imagine the fallout if you fail to make a scheduled court appearance, lose your company’s registered status or fail to file the necessary financial paperwork in time. Yeah, having a Registered Agent is that important.
We mentioned earlier that every company needs either an individual or business to serve as their Registered Agent. But the law leaves the selection process mostly up to you, the business owner.
Of course, your selected Registered Agent needs to meet a few basic criteria.
- Third-party companies only: Another company can act on your behalf, but your business cannot serve as its own Registered Agent.
- Must be a local agent: Any individual or business must reside in the same state where your company is based or be legally permitted to conduct business there, respectively.
- Physical street address: Your agent must maintain a physical street address in this state and, of course, be available during local business hours to receive your mail.
How Expensive is a Registered Agent for an LLC?
Now you understand how important a Registered Agent is for your business. But you’re probably still asking: How much will a Registered Agent cost? The good news there is that this depends entirely on you.
The Costs of Different Registered Agent Options
- using a third-party company: $100-$300 a year
- appointing someone in your company: free outside of time and salary costs
- appointing yourself: free outside of time costs
- using Incfile: free for the first year and $119 a year after
As we discussed, the requirements for who can act as your Registered Agent are incredibly loose. You could select a third-party company to handle this for you. This will generally cost you anywhere from $100-$300 a year.
You may also want to consider appointing someone within your company as the Registered Agent. Because this would be an individual, you can even serve as your own Registered Agent if you meet the criteria. However, there are a few scenarios in which you cannot be your own Registered Agent, including:
- If your business isn’t based in your personal home state
- If you don’t want your name publicly tied to your business
- If you cannot guarantee you’ll be able to accept your mail
While there may not be any fees to be your own Registered Agent or to appoint someone in your company, consider if you or they have the time available to commit. A Registered Agent must be available during business hours. Will you need to pay an employee to perform this role? In the end, it may be less expensive to pay a Registered Agent service.
Appointing yourself or an employee to be your LLC’s Registered Agent might allow you to keep expenses down. However, not all costs are strictly monetary. Perhaps acting as your company’s Registered Agent sounds like one responsibility too many. In that case, a Registered Agent service — such as the one we provide at Incfile — might alleviate that pressure and streamline your operation.
Companies that offer these services will fulfill all the duties of your Registered Agent without any of the stresses you would otherwise face. Many business owners turn to Registered Agent services to solve this issue. And, with costs ranging from $100 to $300 each year, a Registered Agent service is often well worth the money.
But at Incfile, we’re so confident in our ability to represent your business that we offer our Registered Agent service completely free for the first year. This gives you the chance to experience our easy-to-use service for yourself before having to worry about the Registered Agent cost. And it’s now available to any business incorporated anywhere in the United States. After the first year, your Incfile Registered Agent service will cost $119.
If you want more information on how Incfile’s Registered Agent service can enhance your business, check out our website for details.