Registered Agents have one true responsibility - to receive Service of Process for a business and pass it along to them. Service of Process is notification that the business is party to legal action. Handling Service of Process is a crucial function. If you don’t receive a Service of Process that has been properly delivered, someone suing you can win by default, because you won’t have responded to the lawsuit.
Most businesses use Registered Agent for a more practical reason however - they want to be registered in a state like Delaware, but don't have a physical presence there, which is a requirement for registering in a state.
Imagine if you owned a business that was wronged, and you needed to sue another company but couldn’t find where they were based? Registered Agents were created as a concept in order to guarantee a business can be served with legal action. As a result, a Registered Agent requires a physical address in order to receive Service of Process.
A person in your business can be a registered agent, but more commonly businesses use third party companies as Registered Agents. In particular, if you don’t have a physical presence in a state and need to be able to receive Service of Process there, a Registered Agent is a great, low cost option.
There are hundreds, if not thousands of Registered Agent companies in the US. In practice, there is little to differentiate Registered Agents from a basic functionality perspective. If they have physical infrastructure in a state, understand the laws of that state, and can reliably deliver Service of Process, they can be a reliable Registered Agent.
As a result, they generally charge low fees for their Registered Agent service, in the low hundreds of dollars per year per state registration, plus filing fees for anything else they do. Often, these third party Registered Agents offer many other general business services, for example offering a local mailroom in a state, annual report filing, or new business formation because of their physical infrastructure, privileged relationship with their customers, and knowledge of state law.
Unfortunately, most have old or non-existent technology. Perhaps unsurprisingly, the two largest Registered Agent companies are some of the oldest companies in the US, and were quite literally started in the 1800’s.
Evaluating a Registered Agent depends largely on your needs as a business. If you plan on expanding the number and variety of states you're registered in, using a Registered Agent that can act on your behalf in all 50 states plus DC is a non-negotiable. From there - user experience is often underestimated. How does your Registered Agent track your compliance requirements, like annual report filings? Can you view your registrations and filings in an easy to use dashboard? How do they communicate with you? Unfortunately, virtually no registered agents have high quality digital offerings. Chalk that up to the industry being a little dry and dated, to put it lightly.
Yes - Discern offers digital Registered Agent services for all customers, automatically, and digitally switching Registered Agent to Discern is simple in Discern’s product. Discern can also automate other areas of your business’s state compliance, and takes minutes to sign up. Discern's digital Registered Agent product is exactly what you'd expect to come from a bunch of technologists and user experience nerds.