Registered Agents, Business Addresses, and Mailboxes
Starting a small or mid-sized business seems like it has enough pitfalls, and then the LLC or incorporation form demands a "registered agent" and a "business address." For the business owner not well versed in legal jargon, these terms are strangely opaque. What is a "registered agent"? Isn't the "business address" where the business gets its mail? Not necessarily, but there is an easy way to learn the difference.
Businesses Don't Do Business At Their Address.
For legal purposes, a "business address" addresses where the principal work is carried out. It may be the actual physical location of the office or workshop, but it may not be. If a boat repair shop is down at the docks, and the boss sits in an office downtown, then the "business address" is the downtown office. The primary work center is in the office.
A business address is where general mail is received. It is needed for bank accounts, vendor accounts, licensing and permitting, and other official communications. Business addresses are required to open a business because other companies, banks, and local governments need to know that a company physically exists somewhere to trade with them even in today's online world.
Talk to My Agent
A "registered agent" may be the person who owns or runs the business, but that is not a requirement. A registered agent may not even be a single person. The registered agent is the one who is designated by the business to receive government notifications (tax forms, regulatory compliance) and service of process on behalf of the company.
The owner of a business may be his or her registered agent, or a friend or family member may be designated as such, provided they reside in the same state. A business may also pay a third-party company to act as a registered agent. This last is often seen with larger corporations or places which transact across state lines. For instance, a company with a branch in Florida and headquarters in Delaware might designate a registered agent in Florida to accept service on behalf of their Florida office. Smaller businesses usually don't need to have third-party registered agents, but they must designate someone as a registered agent. There are potential commercial and legal consequences, such as fines or a loss of good standing. Also, lack of an agent means that if a business is sued or served, and no one is designated to receive service, the owner might never know a lawsuit has been filed against him.
What About Partnerships?
Anything above an LLC must have a registered agent and a business address. Any business entity must have a designated business address and a designated registered agent. There is no requirement for a general partnership to have both a registered agent and a business address, but if the partnership seems to be moving towards an LLC or wants to expand, it is good to name an agent and settle on an address.
It is less wise to use one's home address as a business address. In today's online world, home addresses should be kept as private as possible, to avoid security risks. Beyond the risk of hacking, there is the annoyance of having business junk mail sent continuously to one's home. Small businesses that need a business address should consider obtaining a post office box. Small companies should be aware that some shipping companies, such as FedEx, will not ship to post office boxes, even the private company boxes cleverly disguised as street addresses. Some types of government permits and licenses require a street address to be valid. Any questions or concerns should be directed to a local attorney who understands the nuances of business addresses, registered agents, and permitting and licensing requirements before the LLC documents are filed.
The blog posts provided on this website do not, and are not intended to, constitute legal advice; instead, all information, content, and materials available on this blog are for general informational purposes only.