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Small Business Resources

Why Use a Registered Agent When Incorporating a Business?

Every business needs to transition and move forward when it comes to growth, so if your small business is progressing towards new avenues, including incorporating, then it is always a good idea to use a registered agent for that. While you can choose to be your own registered agent, there are a few important reasons why you need assistance in incorporating a business.

What is a Registered Agent?

In the United States, every business that is incorporated such as a partnership, LLC or corporation must register as a legal entity. Your business needs to have a registered agent representing it in order to be declared as an incorporated company to the state. To put it short, a registered agent is the one that receives all your important documents and federal notices by the state on your behalf.

A corporate director, CPA or your attorney can also act as a registered agent for you, but let’s face it; they have other pressing issues to take care of, so it is always best to hire a separate person to act as your registered agent.

Here are the top reasons why you need to hire a registered agent for your company:

You Would Rather Spend Time Building Your Business

Compliance requirements take a lot of time and can be quite laborious. You will need to fill out lengthy forms that will often include business jargon. If you aren’t a seasoned business owner and this is your first time incorporating a business, then it is likely that some things can puzzle you.

Most business owners prefer to have a registered agent do all this work for them so that they can focus on the actual issues in the company. Filling out forms and meeting deadlines to submit the paperwork is the least of their worries.

You Are Incorporating a Business in a State Other Than Your Own

Having a registered agent with a physical address is a legal requirement for incorporating a business. If you don’t live in the state where your company needs to be incorporated, then you will definitely need to hire a registered agent as you can’t represent yourself to be one. For instance, if you formed a Texas corporation or LLC while your company is located in California, you can use a registered agent to satisfy the legal requirement.

You Have a Home-Based Business

The address of a registered company is a matter of public record and a legal requirement. That said, if you incorporate your business and give your home address, then be prepared to get unsolicited marketing and junk mail from people. If you want to reduce the amount of junk mail that you receive, just hire a registered agent. That way, you will not have to give your own address.  The junk mail will be delivered to the registering agency’s address only.

You Don’t Have Normal Business Hours

A registered agent is important for receiving any important documents or mail that your company gets and for that, normal business hours should be maintained. If for some reason you don’t work on a regular schedule, then consider getting a registered agent to handle all the mail. This way, you won’t miss out on any important communication between you and your clients.

You Are a Frequent Traveler or Don’t Have a Physical Address

If you have a business that entails a lot of travel and you aren’t physically present, then using a registered agent to handle all your mail will be much better. For instance, what if you work off-site? What if you are a real estate agent and you have to run around showing clients houses that are on sale— in this case, you will be at ease knowing that a registered agent has all your important documents.

You Use a Post Office as Your Business Address

You can’t represent as a registered agent if your business address starts with a P.O Box. This not only shows that your business has a dubious background, but it is also illegal as an incorporated business needs a physical address.

You Have a Business in Multiple States

When you incorporate a business that is located in several locations other than the state where it was formed, then it is imperative that you have a registered agent in every state where your business operates. If you don’t do this, then it will be illegal and you might get a notice of penalty sooner or later.

Your Address is About to Change

If you are relocating to another city or state, then it is important that you register your company’s address again with the Chamber of Commerce. Changing the address will require you to fill out forms once again and pay a fee that you need to pay to the state. If you have a registered agent, then you never have to worry about all the updating as they will do all the work for you.

Why You Should Incorporate Your Business

If you have a small business or startup and are not sure what the next step should be, then the best thing to do is to have it incorporated. Here are some benefits to incorporate a business:

Protects Your Personal Assets

Having other shareholders in your company helps protect your personal assets. Corporations and LLCs let the owners separate their assets in such a way that they incur the least amount of loss and gain profit according to their investment.

Adds Credibility to Your Business

Incorporating a business instantly adds credibility and a good status to it. Adding ‘Inc’ or ‘LLC’ to your company will give it the legitimacy and authority it needs in the eyes of potential clients and other stakeholders.

It Saves on Taxes

As a sole proprietor, you won’t be able to enjoy all the tax benefits and exemptions as corporations and LLCs do. Once you have incorporated, you will receive tax deductions that will save you on thousands of dollars in the long run.

Looking for a registered agent? Contact BryteBridge and let us help you incorporate your business.