Anyone who plans on incorporating a business in Minnesota, including those interested in creating a corporation or LLC, has likely run into the phrase “registered agent.”
To find out more about what a registered agent is, what they do and why they are important, keep reading.
Minnesota Small Business Law | What’s a registered agent?
Registered agents are people (or companies) who are designated to receive legal documents, government notices and other important paperwork. Registered agents provide a way for others to file suit against your company and are the point person for the delivery of tax documents or payments and other official matters concerning the business. Though a registered agent is certainly an important part of registering a business in Minnesota, there’s no reason that the registered agent must play an active role (or any role) in the business itself.
Minnesota Small Business Law | Requirements of a registered agent
Registered agents must list not only their names, but also contact information, including a physical address where paperwork can be delivered. In Minnesota, the law says that the registered agent must have a publicly accessible address. This means that the address will be made a matter of public record and can be found by anyone who is interested. The address must have a street number and cannot simply be a PO Box.
Who can be a registered agent?
In some cases, the owner or another officer of the company serves as its registered agent. This can be a simple solution and requires little work or thought. In other cases, business owners decide to use a company or another person as the registered agent.
Under Minnesota law (Minnesota Statutes Chapter 5, Section 36), registered agents can be a person, a domestic corporation, a limited liability company or a foreign (meaning out-of-state) company authorized to do business in the state. Businesses do this for several reasons, including a desire to shield the owners from having their names and information revealed publicly. In other cases, businesses owners select a company to serve as their registered agent because they do not live in the state and thus do not have a physical Minnesota address.
Minnesota Small Business Law | Why do you need one?
Besides the legal requirement to have one, there are a few important benefits of having a registered agent. First, it’s good to know you won’t need to worry about missing out on important legal or tax documents. The fact that someone has been designated as being generally available to receive such things means there’s little chance of them slipping through the cracks.
Another benefit to having a registered agent is that you need not worry about being served with a lawsuit or having to accept other potentially embarrassing legal documents on your own, perhaps in front of clients or employees. Naming someone other than yourself as registered agent creates a buffer between you and the front lines of dealing with business paperwork.
What if you don’t name a registered agent?
Those companies that fail to name a registered agent can end up suffering penalties from the state and risk losing their good standing. Possible penalties include license revocation, fines and other civil penalties.
It’s good to know that with the right help, establishing a Minnesota small business does not have to be a scary proposition. An experienced Minnesota small business attorney can help walk you through the process of setting up your new company and ensure it offers the maximum benefits for your individual situation. For more information, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.