The Malta Independent 21 September 2021, Tuesday

6 Myths About Registered Agents in the U.S

Wednesday, 15 September 2021, 08:00 Last update: about 5 days ago

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Are Registered Agent Services Useful? Let’s Find Out

Many E.U. businesses have a presence in the U.S. and vice-versa. With local perceptions being quite strong on both sides of the atlantic, it is inevitable that many businesses will continue to have a presence in numerous continents, despite the drive to fix corporation taxes around the world. 

If you are starting a business in the U.S, you will likely know that every separate legal business entity is required to have a specified party (known as a registered agent), that receives all important government and state documents and handles any company-related notices that are received.

According to recent government surveys, a very significant proportion of operating entrepreneurs fail to recognize the potential risks that they are subjecting themselves (and their personal assets) to by opting to operate as their own registered agent. 

This is particularly the case in 2021; the explosive growth of the e-commerce industry has given rise to a variety of different online services that have irrevocably altered the ways in which we do business- including LLC formation services, registered agent service providers, and automatic business name AI-powered programs. 

Below we will discuss the 6 most common myths relating to registered agents, delineating the reasons for their persistence and counterbalancing them with industry facts and analysis.

Myth #1: A Registered Agent Is Basically A Glorified Mail Service

Whilst a prolific number of business owners have inadvertently fallen to this fallacious claim, there is actually a significant amount of work and preparation that goes into adequately managing the position of a business’s registered agent.

This is because there is a lot of junk and insignificant mail that needs to be sorted through, and this needs to be done carefully when considering the importance of correctly funnelling any service notices or other important government documents to business owners quickly and without fail on a consistent basis.

This means that, in reality, mail sorting tends to be a ‘’by-product’’ of or an additional benefit to the valuable services that an adequate registered agent service provides.

Myth #2: I Can Handle Being My Own Registered Agent

Whilst being your own registered agent is by no means impossible, it is definitely not the most efficient or fruitful approach. 

This is particularly the case for individuals who are operating in multiple U.S states, as some states have different legal prerequisites that need to be satisfied and having to maneuver through the legal rigmarole involved independently whilst effectively running your business can be extremely stressful and impractical. 

Myth #3: I Can File My Annual On Or Close To The Due Dates

This is simply not true in a lot of different cases, as not every state has an online filing mechanism, and where signed documents are required (such as in Washington D.C), leaving filing to the last minute can easily result in a missed deadline.

Varying budget cuts and personal changes among different state departments can also play a pivotal role in this, as some states can take as much as four months to get back to you. 

Myth #4: All States Require The Same Information

State requirements and legal prerequisites can actually vary quite significantly depending on the state that you work in.

For example, Oklahoma, South Carolina, Arkansas, and Wisconsin only mandate financial information from Corporation structures. 

On the other hand, a state like Colorado only requires a primary business address and the personal information of a business’s designated registered agent. Maryland, Texas, and Alabama require extremely comprehensive financial reports which detail a business’s total profits and assets. 

Myth #5: I Do Not Need To Keep Notices From My State After Individually Marking The Deadline

Whilst this myth isn’t technically false, it fails to grasp the fundamental value of consistent and succinct reminders which consist of crucial financial information that a business may require to file their report with their relevant state and federal agencies- such as any passwords or pin numbers needed. 

Myth #6: My Business Structure Doesn’t Require A Registered Agent

Unless you are a sole proprietorship or a general partnership, you will likely be legally required to designate an individual as your company’s registered agent. 

Even where this is not a legal requirement, data shows that most entrepreneurs elect to do this anyway, as it is generally very affordable and can save them a significant amount of stress, hussle, and worry.

Final Thoughts

Overall, the benefits of hiring a robust registered agent service are widely known. 

They can provide busy business owners with ‘’peace of mind’’, and allow them to tailor their precious time towards important, growth-related business decisions without having to worry about mistakenly missing a deadline or occasionally filing the wrong document. 

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