Formal business entities in the US, like LLCs and corporations, are required to designate a registered agent for the company. In fact, you can’t officially complete the business formation process without appointing a registered agent.
Registered agents play a crucial role for businesses in terms of government and legal correspondence. The Model Registered Agents Act (MoRAA) was enacted to simplify this role nationwide.
But so many business owners are still confused about the Model Registered Agents Act and achieving compliance—so we created this guide to clear up any confusion.
What is the Model Registered Agents Act?
The Model Registered Agents Act was initially enacted in 2006 but was later amended in 2011.
It was created by the American Bar Association and the International Association of Commercial Administrators in an effort to standardize the rules and regulations for registered agents for US-based businesses.
Since each state has its own rules, there is a significant amount of variance from state to state for registered agent requirements.
The act aims to unify laws, filing requirements, forms, and more, by each state adopting uniform policies for registered agents.
The Basics of the Model Registered Agents Act
Let’s take a closer look at the core components of the Model Registered Agents Act. This will give you a better understanding of how it works so you can apply the concepts to your business.
Registered Agent Role
Before we dive any deeper into the Model Registered Agents Act, I want to make sure you have a firm grasp of the registered agent’s duties. This section will be extremely useful for new business owners seeking a registered agent for the first time.
What is a registered agent?
The terms “statutory agent” and “agent of process” were commonly used synonyms for registered agents—but the Model Registered Agents Act made these alternative names a bit more obsolete, as “registered agent” has become the new normal.
Regardless of the name being used, registered agents perform the same basic roles.
They are an individual or entity that is responsible for having a physical address in the state you operate it. Registered agents will receive official government correspondence on your behalf.
Arguably the most important function of the registered agent is availability. Registered agents must be physically present during regular office hours to receive documents.
For example, let’s say someone files a lawsuit against your company. The service of process documents would be delivered to your registered agent’s office.
As a business owner, you could technically operate as your own registered agent. But that’s typically not recommended. That would mean you’d have to physically be available during all normal business hours at your listed address, and service of process could happen at your business.
Commercial vs. Non-Commercial Registered Agents
One major component of the Model Registered Agents Act is that it categorizes registered agents into two different categories—commercial and noncommercial.
In terms of the functions, roles, and responsibilities, there aren’t any differences between these two categories. But here’s how they vary in the eyes of the MoRAA:
- Commercial Registered Agents — It’s common for commercial registered agents to serve multiple organizations in the same jurisdiction. They file an official registered agent listing and can easily inform the state which entities they represent and manage bulk address changes. The vast majority of national registered agents are categorized as commercial in the states where they operate.
- Non-Commercial Registered Agents — Individuals and single-state registered agents typically fall into this category. They don’t have an official registered agent listing statement with the secretary of state, and they don’t represent hundreds or thousands of businesses. Non-commercial registered agents may not offer the additional services associated with a commercial registered agent.
If you were to list yourself as the registered agent of your small business, then you’d fall into the non-commercial category. A small registered agent entity in your home state that only provides services to businesses in that jurisdiction would be non-commercial as well.
Basically, any other registered agent is designated as commercial under the Model Registered Agents Act.
While the duties and responsibilities remain the same for both categories, there are advantages for commercial registered agents.
The Model Registered Agents Act has streamlined the process for registration in state offices for commercial registered agents. It’s a streamlined way for these registered agents to correspond with state officials, update information, and more.
State Adoption of the Model Registered Agents Act
While the MoRAA has helped streamline processes and create unity across state lines for the registered agent’s role, it hasn’t been adopted nationwide.
Currently, just twelve states have fully adopted the Model Registered Agents Act:
- Arkansas
- District of Columbia
- Idaho
- Indiana
- Maine
- Montana
- Mississippi
- Nevada
- North Dakota
- South Dakota
- Utah
- Wyoming
Other states have embraced certain aspects of the Model Registered Agents Act or enacted similar provisions for the same goal:
- California
- Colorado
- Delaware
- Hawaii
- Massachusetts
- Pennsylvania
- Washington
For example, Pennsylvania doesn’t have a specific designation for commercial registered agents. But the state requires registered agent service providers to designate a physical address within the state. Those registered agents can still register as a CROP (commercial registered office provider), even though Pennsylvania doesn’t have an official designation for commercial vs. non-commercial agents.
4 Solutions to Help With Model Registered Agents Act Requirements and Compliance
Navigating the waters of the Model Registered Agents Act on your own can be a bit overwhelming. To help simplify things for you and your business, check out the following solutions:
#1 — Northwest Registered Agent
Northwest Registered Agent stands out as one of the best registered agent services on the market with its exceptional support for both LLCs and corporations. One unique standout of this service compared to alternatives is its corporate guides—offering insight, expertise, and the knowledge you need to be successful.
Another reason why you should consider Northwest Registered Agent is its attention to detail. They have specific resources, information, and requirements for registered agents in all 50 states. So regardless of your location, Northwest Registered Agent can ensure compliance at the state level. These registered agent services start at $125 per year.
#2 — Incfile
Incfile is one of the most popular and reputable names in the world of business services. This organization has helped form 500,000+ businesses nationwide in the last 15+ years. In addition to its simple and low-cost business formation packages, Incfile also offers registered agent services in all 50 states. So whether you have an LLC or corporation, this will be a great option to consider.
Incfile will handle all of your documents, including IRS mail correspondence and legal proceedings. All of this information can be accessed through your simple online dashboard, and Incfile will automatically forward you all important mail. You can also get tailored notifications whenever Incfile receives documents on behalf of your business. The registered agent services cost $119 per year, and the first year is free with any business formation package.
#3 — Swyft Filings
Swyft Filings is another excellent registered agent service available in all 50 states. Getting started is easy—just fill out a quick questionnaire about your business, and you’ll be signed up right away. Swyft Filings leverages automated technology to help you ensure compliance using timely reminders for state deadlines.
Another benefit of Swyft Filings registered agent service is the automatic renewal, so you won’t have to worry about gaps in your service or compliance problems. Packages start at $149 per year, and they’re backed by a 100% money-back guarantee.
#4 — MyCompanyWorks
More than 60,000 businesses across the US rely on MyCompanyWorks for various business services. They provide registered agent services in all 50 states, including Washington, DC.
One unique standout of MyCompanyWorks is its simplicity for businesses that need to switch registered agents. So if you’re currently operating as your own registered agent or want to switch from a non-commercial agent, MyCompanyWorks handles this process with ease. With plans starting at just $99 per year, it’s one of the most affordable registered agent services on the market.
3 Quick Tips For the Model Registered Agents Act
To improve your experience with registered agents and ensure compliance with the Model Registered Agents Act, there are a few tricks and best practices you should follow. The following tips are ideal for beginners and first-time business owners.
Tip #1: Don’t Be Your Own Registered Agent
While it may seem easy to just list yourself as the registered agent for your business, we strongly advise against that.
For starters, registered agent services aren’t expensive. If you’re using a business formation service to start your LLC or corporation, you can usually get a free year of registered agent services included with your package.
Beyond that first year, a registered agent will usually only cost you between $99 and $150 per year. That’s a marginal fee when it comes to compliance and peace of mind.
If you are the registered agent for your own business, then you need to be available during regular business hours to receive government correspondence and service of process.
Is anyone actually going to check to see if you’re available from 9:00 to 5:00, Monday through Friday? Probably not.
But if someone sues your business and you’re not around to receive the service of process documents, it can land you in big trouble with the state. Furthermore, most people don’t want that to happen at their place of business in front of employees and customers. This can easily be avoided with a registered agent service.
Tip #2: Use a Commercial Registered Agent
Don’t just use any registered agent—sign up for a commercial registered agent service.
Commercial registered agents will make your life much easier, especially if you’re in a state where the Model Registered Agents Act has been adopted. Even if you’re not operating in one of those jurisdictions, commercial registered agents typically provide additional services that aren’t offered by small, non-commercial registered agents.
Here are some of the top advantages of using a commercial registered agent:
- These agents maintain an address with the secretary of state, so your company only needs to list the agent’s name on filings—resulting in fewer clerical errors.
- States with commercial registered agent requirements don’t need physical signatures from agents on business forms for the state.
- Since commercial registered agents represent so many companies, they already have the infrastructure in place to reliably serve your business.
- The majority of commercial registered agents operate in every state, so you can continue using the same agent as your company scales and grows across state lines.
Non-commercial registered agents may not provide some of the other perks that you’ll typically see from commercial agents. For example, digital document delivery and real-time notifications aren’t as common for smaller registered agent entities.
Tip #3: Check State-Level Requirements
While the goal of the Model Registered Agents Act makes sense, it still hasn’t been adopted by every state. Since its enactment in 2006, just twelve states have fully adopted the policies, and an additional seven have used some provisions.
While the majority of states don’t recognize the Model Registered Agents Act, that could change moving forward.
Regardless of where you operate, it’s always in your best interest to verify the state’s rules for registered agents. There might be different forms, terminology, filing requirements, and other variations from state to state.
This is another reason why it’s so important to use a commercial registered agent, as they’ll have the experience and resources required to handle everything appropriately based on state guidelines.
What to Do Next
Now that you understand the Model Registered Agents Act, it’s time to start looking for a registered agent. To help you narrow down the best option for your business, check out our in-depth guide on the best registered agent services.
For those of you who are getting ready to start your own business, you should consider bundling your registered agent service with a business formation service. Our guide on the best business formation services will show you which resources offer both of these options.
Source: quicksprout
A Beginner’s Guide to the Model Registered Agents Act