Why does a business need a registered agent?
The short answer: because Georgia law requires your business to have a registered agent - unless you’re a sole proprietor or general partnership. However, there are better reasons.
First, it’s important to know who a registered agent is. The Corporations Division of the Georgia Secretary of State describes a registered agent as the “mailbox” for your business. He or she is “the person or entity located in this state designated by the entity to receive any service of process, documents, or other official communication” on your business’s behalf. The registered agent can be any person or entity located in Georgia and often is an attorney or corporate service company such as CT Corporation. The registered agent’s address must be a street address, not a mailbox, so that a process server can find the registered agent and make personal service.
The main reason you want to have a registered agent is to control who will receive legal notices on behalf of your business and, as a result, who you should expect to report your business’s receipt of any legal notices. This is important because, by having a registered agent listed with the Georgia Secretary of State, you significantly decrease the likelihood service of a legal document such as a complaint will be made on someone employed by your business that fails to report the service to senior level management. For example, while service of a complaint may be made on a shift manager of one of several chain restaurants owned by one corporation, that probably is not the person you want receiving legal notices that have important, consequential response deadlines. Moreover, if you have appointed an attorney or professional corporate service company as registered agent for your business and that agent fails to report service to you, you’ll have someone to hold liable who is much more likely than a shift manager to be able to pay damages.
Not only should you appoint a registered agent, you should make sure you keep your registered agent’s information updated with the Georgia Secretary of State. Typically, you do that each year when you file your annual registration with the Georgia Secretary of State. However, many business change their registered agent during the year. If you change your registered agent but don’t update that information with the Secretary of State, and then someone serves your former registered agent with a complaint, that registered agent will not have a legal obligation to report the service to you. Moreover, if you changed your registered agent because it is a law office or other entity that closed its business, service cannot be made. In that event, the plaintiff attempting service could then make service on your business through the Secretary of State, and you may not find out until the plaintiff begins to collect a judgment against you.
As an Atlanta business attorney, I’ve helped businesses resolve a variety of registered agent issues. Please call me at 404-445-7771 or email me if you have any questions about your registered agent issues.