The state of Delaware states that acquiring a registered agent is the second most important part of starting a business after choosing a business entity type. The law in the state requires that every single business entity maintains a registered agent and that this may either be an individual or a business. If it is a business it must have the authorization to do business in the state of Delaware. Additionally, the registered agent must have a physical street address within the state. If a business is physically located within the state then it may act as its own registered agent. However, if the business is not located within the state the business will need to use a different avenue. The most common way of solving this administrative requirement is to use a registered agent service which one can learn more about here.
The Need For Registered Agents
A registered agent is the person or business that receives important documents on behalf of a business such as service of process notices. The registered agent acts as the point of contact between the business and the state in which it is formed, in this case Delaware. The state needs a method of contacting a business that is reliable and secure. That is why registered agents are mandatory. However, just because a business can serve as its own registered agent this does not mean that it should. There are many benefits of using a registered agent service to fulfill this requirement and these benefits will be discussed below.
Privacy
A registered agent’s address is published online for all to see and this often results in a registered agent receiving a great deal of spam mail. Using a registered agent service will ensure that a business owner does not need to disclose their address to the public and be overwhelmed with junk mail.
Discretion
When a business is served with a lawsuit this is often carried out by law enforcement officers. This can be a very undesirable situation for a business especially if there are likely to be customers around. A registered agent service will receive these notices and discreetly pass them on to a business to ensure that they can avoid embarrassment and stay informed.
Compliance
As a registered agent is a legal requirement, not having one will make a business potentially lose their good standing with the state. Additionally, a registered agent service will inform a business of the various legal requirements which they have such as filing an annual report. In this way a business can stay up to date with all their relevant legal requirements and not risk falling into bad standing with the state of Delaware.
Additional Services
A good registered agent service will assist a business in other ways as well. For example, a registered agent service can keep important legal and tax documents on file so that a business owner does not have to. Additionally, a registered agent service can digitize files for a business so that they have all their relevant paperwork stored on a computer instead of in a file cabinet.
Flexibility
A registered agent is expected to be available to receive documents every business day of the year. This can be a very onerous requirement especially for a small business. Using a registered agent service will mean that a business owner will be able to take days off or go on holiday. Additionally, this creates the ability to live outside of the state in which a business is formed. As many companies are drawn to Delaware for its business climate, this is a very useful addition to have.
Final Thoughts
Businesses in Delaware need a registered agent for two compelling reasons. Firstly, this is a legal requirement and not having a registered agent will potentially lead to heavy fines and losing good standing with the state. Secondly, a registered agent service can bring a business a great deal of benefits which can make operating their business much easier. These benefits include: increased privacy, discretion in dealing with legal matters, staying compliant with relevant requirements, receiving additional services to make managing a company easier and being able to enjoy the flexibility of not needing to be in the office every day.
