By state law, your business must appoint a Registered Agent — a designated party that accepts key correspondence from the state government. Also known as an agent for service of process or a statutory agent, this party plays a key role in communicating with the state to ensure your business's legal compliance. But which type of Registered Agent is best for your business?
Here, we'll discuss the two types of Registered Agents, commercial and noncommercial, so you can decide which one provides you with the most benefits.
What Is a Noncommercial Registered Agent?
A noncommercial Registered Agent is typically an individual or small company that provides services within one or just a few states. Unlike commercial Registered Agents, noncommercial agents are not officially filed with the Secretary of State in the state(s) where they conduct business. They also tend to work with a smaller number of businesses to provide essential services such as:
- Receiving legal documents like tax correspondence from the government or summons, subpoenas, or other legal notices on behalf of another person or organization
- Ensuring compliance with state laws and regulations by handling important notices and filings for the client
- Providing a physical location for receipt of official mail and correspondence
What Is a Commercial Registered Agent?
A commercial agent can be an individual or small company, but they are more often larger organizations working with hundreds of clients in multiple states. Commercial Registered Agents officially file with the state in which they are conducting business, and they operate in accordance with the Model Registered Agent Act (MoRAA) — more on that later.
Difference Between Commercial and Noncommercial Registered Agents
While they both provide the same services, the legal difference between commercial and noncommercial Registered Agents can be found in the Model Registration Agents Act (MoRAA) of 2006, which brought about a clear distinction between these two types of RAs:
- Commercial agents file a special listing statement and pay a fee to the state office, allowing them to streamline the way they communicate with the state.
- Noncommercial agents do not file a special listing statement or pay a fee to the state office. This may be because they represent a small number of companies, do not have the MoRAA in their state, or see no need to streamline their communication with the state or pay the added fee.
Not all states have adopted the MoRAA, but those that do use a standardized Registered Agent database and a uniform registration process no matter what type of business a Registered Agent represents.
Which Agent Do I Need for My Business?
Many businesses opt for a commercial Registered Agent. Their reasons include:
- Simplified Communication: Commercial Registered Agents file a special listing statement (such as this one from Mississippi) in the states wherein they operate. To help simplify communication with the state office, this statement contains all the business's essential information, including the name of the agent, their contact information, the entity type, and the address of the Registered Agent service.
- Reliable Service: Since commercial Registered Agents work with hundreds or even thousands of businesses, they are more apt at providing efficient services, and they are more likely to ensure your business's compliance requirements by maintaining the required hours of operation (Monday-Friday, 9 a.m.-5 p.m.)
- Multi-State Capability: If your business has plans to grow and expand into other states, a commercial Registered Agent is better equipped to handle and act as your company’s Registered Agent in multiple locations. Commercial agents have the experience and infrastructure to meet the requirements of each state wherein they conduct business.
- Address Listing Exemption: Businesses using a commercial Registered Agent never have to list their agent's address since it's already on file. However, if you choose a noncommercial Registered Agent, you will always be required to include their address in filings.
Which States Recognize Commercial Agents?
Currently, there are 11 states, plus Washington, D.C., that distinguish between commercial and noncommercial Registered Agents and recognize the Model Registration Agent Act (MoRAA). These states include:
- Arkansas
- Idaho
- Indiana
- Maine
- Mississippi
- Montana
- Nevada
- North Dakota
- South Dakota
- Utah
- Washington D.C.
- Wyoming
States with similar laws about Registered Agents (but do not recognize the MoRAA) include:
- California
- Delaware
- Hawaii
- Pennsylvania
- Washington
Registered Agent FAQs
What Are the Advantages of Using a Commercial Registered Agent?
A commercial Registered Agent such as Incfile offers several advantages. They can streamline processes and significantly reduce the time it takes to start representing your business, which saves you weeks between filing and receiving approval from the state.
Here are some more benefits of choosing a commercial Registered Agent:
- Reduced Risk of Filing Errors: Commercial Registered Agents are required to submit their information once with the state. This process minimizes the chance of introducing an error when filing multiple times with the state, ensuring an error-free and smooth process when filing for a new client.
- No Physical Document Signing: When taking on new clients, commercial agents do not always need to physically sign documents. This helps eliminate the need for time-consuming signatures, especially when the agent is managing multiple correspondences for hundreds of clients.
- Streamlined Filing Process: The process of filing is streamlined, ensuring the proper handling of all important correspondence received by the Registered Agent.
- Easy Access to Commercial Agent Listings: Information about commercial agents within your state can usually be found on the Secretary of State’s website. This enables businesses to make informed decisions when selecting a reputable and reliable agent.
Should You Use a Registered Agent Service?
Having a Registered Agent is a legal requirement in every state, and while you can act as your own Registered Agent, selecting a Registered Agent service can come with many benefits:
- Compliance with state law ensures your business gets all important correspondence from the state. Missing government notifications can result in penalties and fines and even lead to the loss of a business’s good standing
- Protection of privacy by keeping your personal address off public records and using the Registered Agent’s address instead
- Flexibility to be away from the office during regular business hours while someone else accepts your mail and notifications for you, allowing you to visit clients, go to work sites, attend conferences, etc.
- An added layer of protection and a way to save face from potential embarrassment should a lawsuit or subpoena be delivered to your personal address or, worse yet, to your place of business where clients, customers, and employees are present
Can I Change My Registered Agent?
If you're unhappy with your Registered Agent service, you can always change your Registered Agent and work with one that better suits the needs of your business. This also applies if you plan to change your type of Registered Agent from a local noncommercial RA to a commercial service such as Incfile's (or vice versa).
The first step in making this change is to formally notify your current Registered Agent by sending a written notice. At this point, you should also know who you intend on having as your new Registered Agent.
Next, you must notify your Secretary of State by completing an online "Change of Registered Agent" form. Doing so will ensure that all your important correspondence will now go to the correct Registered Agent service.
Finding the Right Registered Agent for Your Business
Regardless of which state you intend to form your business, or even if you’re planning big and wish to operate in multiple states, Incfile can provide the peace of mind you're looking for with our reliable Registered Agent service. And when you form your business with us, your first year of Registered Agent services is 100% free of charge.
Peter Mavrikis
Peter Mavrikis is an author and editor with over 25 years of experience in publishing. He has worked as the Editorial Director for Barron’s Educational Series, as well as Kaplan Test Prep, where he ran the test prep, foreign language, and study guide divisions. Peter has also written several books on history, exploration, science, and technology.
