If you’ve been considering forming a business (or already have started one), you’ve probably have heard the term registered agent. Alternate names include statutory agent, agent for service of process, or resident agent.
A registered agent is a designated party located within the state that a business has authorized to accept “service of process” (notice of lawsuits) and essential correspondence from the state on its behalf. Essentially, there are two types of registered agents – commercial and noncommercial.
So, what’s the difference between a commercial and noncommercial registered agent? And which one should a business use?
The Model Registered Agents Act of 2006
Commercial and noncommercial registered agents both have the same responsibilities and must meet the same statutory requirements.
For example, they must have a physical address in a state to provide services to business entities there.
Differences exist between them, though, as established by the MoRAA (Model Registered Agents Act) in 2006, which created the two distinct classes of registered agents. Some states have fully adopted the MoRAA distinctions of commercial and noncommercial. Some states have crafted similar provisions for their jurisdictions. Other states do not follow MoRAA’s lead in differentiating registered agents.
Essentially, in the states that have adopted the Act, MoRAA promotes uniformity for registered agent filings. It provides states with one registered agent database and a uniform registration procedure no matter what kinds of business entities the agent represents.
Because some states do and some states don’t conform to MoRAA, business owners should research their state’s rules for designating and maintaining a registered agent.
At the time of this writing, the states that enacted MoRAA rules and recognize two distinct classes of registered agents include:
- District of Columbia
- North Dakota
- South Dakota
States that currently have not adopted MoRAA but have similar provisions for commercial registered agents and noncommercial registered agents:
A Commercial Registered Agent
A commercial registered agent has filed a special listing statement with a state’s agency responsible for business registrations and compliance. By doing so, it streamlines the flow of information between their office and the secretary of state. Information that a commercial registered agent provides on the list includes its company name, entity type, and address to which service of process should be sent.
Commercial registered agents often maintain a physical address in multiple states and work with many business entities (possibly hundreds, thousands, or even tens of thousands).
CorpNet is considered a commercial registered agent.
A Noncommercial Registered Agent
A noncommercial registered agent is typically an individual or small company providing services within just one or only a few states.
These persons and businesses have not filed a listing with the states where they serve clients. Also, they usually work with a smaller number of businesses than commercial registered agents do.
4 Advantages of Using a Commercial Registered Agent for Your Business
1. Makes it Easier to Expand into Another State
Registered agents, like CorpNet, that provide services to business entities in all 50 states help make it simpler for companies to expand their operations. For example, suppose a Texas business called ABC Auto Parts, Inc. wants to open a store in Arizona. The owners will need to designate a registered agent located in Arizona when filing to foreign qualify to do business in that state. If the commercial registered agent the company uses in Texas is also authorized to handle service of process in Arizona, the business owners don’t have to go through the time and effort to find a new registered agent in that state.
2. May Provide Other Formation and Compliance Services
Some commercial registered agent companies will notify businesses of upcoming state filings and legal notices and prepare and submit compliance filings on behalf of their clients.
For instance, CorpNet handles online filings for a wide range of requirements at the state, federal, and local levels:
3. Manages and Protects Important Documents
With an experienced and responsible registered agent, entrepreneurs can have peace of mind that their critical business documentation is received and handled by a trusted resource.
Some specific examples of the necessary documentation registered offices will receive for their client companies are:
- Official federal and state correspondence
- Subpoenas for information
- Tax notices from the IRS and local tax authorities
- Summonses to appear in court
- Wage garnishment notices when ordered to withhold a portion of your employee’s wages and send it directly to a person or organization to which that worker owes money
- Corporate filing notifications
In addition, commercial registered agents often deliver a more sophisticated and secure experience. A secure client portal help eliminate back and forth emails, enable efficient document processing, and ensure timely notifications.
4. Offers the Convenience of a Single Point of Contact
Businesses that have different registered agents in each state will be receiving notices and communications from various contacts. Moreover, they may have multiple registered agent online portals to maintain accounts on and check for updates. That can become confusing and overwhelming!
Conversely, having a nationally recognized commercial registered agent to cover all of the states a business operates in means owners and managers can spend less time on administrative efforts and more time on productive business initiatives.
How to Appoint a New Registered Agent or Change Your Existing One
Before business owners give a state their registered agent information, it’s important that they talk with the commercial registered agent and sign up for a service plan. Sometimes, registered agents that do formation filings will include registered agent services at no charge for a period of time after a business uses them to handle their business registration documents.
Some commercial registered agents also provide discounts to companies that have multiple entities, have multiple locations, or have signed up for a multi-year contract. Learn more about CorpNet’s national registered agent services.
If you have an existing registered agent, you can easily change this assignment. After ending services with the existing registered agent and securing registered agent services from a new provider, businesses should notify the state of the change. The requirements vary from state to state, but generally, it’s a simple and cost-effective process. Learn more about changing your existing registered agent.
When completing state paperwork to appoint a registered agent, business owners must complete the information correctly. Typographical errors or other mistakes could result in the state not recognizing the appointment. On forms that differentiate between “commercial” and “noncommercial” registered agents, it’s crucial to identify the correct type to avoid issues down the road. Any inaccuracies in registered agent information might cause important notices and time-sensitive correspondence from reaching businesses. Ultimately, that can lead to legal problems and noncompliance with a state’s business regulations.
CorpNet Has Your Back
You’ve invested a lot in your business — your time, money, energy, heart, and soul! At CorpNet, we believe you deserve to have peace of mind that you have a registered agent who has your back. No matter where you’re located, how many business entities you’ve started, and where you are in your entrepreneurial journey, our team is here to help.
Contact us today to talk about our affordable, comprehensive commercial registered agent services!
References and Resources:
Model Registered Agent’s Act. International Association of Commercial Administrators Accessed 2 July 2021.
A Few Facts About the Model Registered Agents Act in Uniform Law Commission Published 23 September 2019 Accessed 2 July 2021.