Starting a new business venture is often an exciting, yet daunting time for first time founders and seasoned entrepreneurs alike. There are several seemingly similar aspects that can often create confusion regarding which official addresses serve which purpose. With this in mind, Lloyd & Mousilli has prepared this brief explainer to ensure you are utilizing your company’s Registered Agent and Business Address properly thus avoiding costly compliance issues.
What does a Registered Agent Do?
The Registered Agent is a business or individual that the company must designate to accept service of process documents, in case of a lawsuit, on behalf of the company. The Registered Agent acts as the liaison between the Company and the Secretary of State, which means they can receive official government notifications, including tax forms and compliance information, on behalf of the company.
Appointing and maintaining a Registered Agent is a state law requirement in all 50 states. The consequences for failure to update the Registered Agent vary depending on the state but can lead to additional fees due and in some instances, suspension of the company’s right to transact business.
Why is a Registered Agent Service Recommended?
As outlined above, your company will need to appoint a Registered Agent. In some states, a principal of the company may serve as the Registered Agent, if they physically reside in the state that the company is registered in. However, in most instances the better solution is to appoint a Registered Agent Service to handle this important administrative function for the business. In addition to being easier from a management standpoint, it also creates an additional layer of privacy by not disclosing physical addresses of those associated with the company in public records.
What is a Business Address?
A business address is the place where the company primarily operates business from. In some instances, this is a home office of one of the principals of the company.
Why Do You Need a Business Address?
The Company needs to use this address for opening business bank accounts or merchant accounts, opening accounts with its suppliers and vendors, receiving statements, invoices, payments, and bills, filing for legal contracts, licenses, and permits and communicating with its customers.
As our world moves more and more online, many companies may believe they simply do not have a physical business address. However, there are several practical matters as listed above that necessitate designating a physical business address.
If you would like to consult with Lloyd & Mousilli regarding taking on your company as a client to help ensure all of these compliance matters are adhered to, you can do so here.