Registered agents can help you navigate US complexity
Opinion 3 minute read

Registered agents can help you navigate US complexity

19 October 2014

Our American business expert recommends using a registered agent when operating in multiple jurisdictions in the US; here’s why.

The requirements that govern business entity compliance at the US state level are varied and complex. In companies with multiple entities in multiple jurisdictions, the busy corporate legal department is hard-pressed to both monitor all requirements and efficiently comply with them.

You could work with an experienced, full service commercial registered agent to help mitigate risks; the agent can provide compliance protection, governance assistance and help your department streamline litigation preparations. An experienced registered agent is uniquely positioned to minimise your exposure to risk by proactively combining two vital areas of knowledge: knowledge of your entity structure, and knowledge of each jurisdiction’s compliance requirements.

Almost all jurisdictions require the appointment of a registered agent to satisfy their entity registration requirements. Registered agents, also known as statutory or resident agents, are commonly perceived as a representative that receives and forwards service of process and official state notices. While the appointment itself is fairly simple and straightforward, the simplicity of this task can conceal the important issues at stake when selecting a commercial registered agent. 

The commercial registered agent can perform other vital roles in assisting with regulatory compliance. First, they could help businesses avoid default judgments by facilitating a rapid response to service of process. Second, they could manage required compliance filings and licenses, thereby helping businesses maintain their legal right to do business in the states in which they are duly organised or qualified. Third, the commercial agent could proactively warn businesses about legislative updates and other communications from the jurisdictions that may impact the conduct of business.

Thus, many forward-thinking in-house legal teams discover significant benefits when they strategically select a registered agent to be their true compliance partner.

The registered agent’s functions have commonly been perceived as being limited to forwarding service of process and mail from the jurisdictions. However, your registered agent is chief among your legal services partners to help you avoid the risks of non-compliance, which include involuntary dissolutions and default judgments.

In today’s budget-conscious climate, cost is naturally a consideration when selecting a registered agent. For multi-entity organisations, it’s helpful to frame this in terms of value vs. direct expenses. A full-service commercial registered agent provides the expert knowledge and infrastructure that you would otherwise have to maintain in your department. Their fees will typically be higher to reflect this. Providers offering lower fees typically provide less experience and narrower service capabilities.

This lack of resources can have a dramatic impact on the second type of cost to consider when choosing a registered agent – the unbudgeted costs of correcting mistakes, paying unexpected penalties and compensating for necessary services not provided by the lower-priced agent. Additionally, there is the hidden cost of time lost to compliance tasks which would have more productively been spent on strategic issues. In the final analysis, you may find that the consequences of inadequate risk protection to be extremely costly over time.

By understanding the full scope of the services a commercial registered agent could provide, your organisation could achieve significant peace of mind and streamlining of operations.

Choosing the right commercial registered agent can be the most efficient and cost-effective solution for managing compliance activities and reducing risk. An experienced full-service partner will perform their functions expertly, empowering you to stay focused on your core business and legal issues.

In the long run, you should be able to rely on your registered agent to keep the way clear to support your business’ growth plans. If you’re getting anything less than this, you’re not getting full value for the fees you’re paying.

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Written by

Dennis Day

Former Director of Global Sales

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