What is a Registered Agent?
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What is a Registered Agent? Show Notes
Picture this: you’ve retired from your main career. You get serious about a hobby you’ve enjoyed, and it blossoms into a successful side business. Suddenly, you’ve got a lot to think about–and you need a registered agent, even if you’re not quite sure what they do yet. All you know is that you need one.
With that in mind, today’s conversation is for business owners at every stage of life. I’m speaking with Kent Rockwell and Patrick Eyberg with Universal Registered Agents, which provides registered agent, independent director, and corporate services all across the United States. Kent is the founder, while Patrick serves as the Director of Partner Development.
In this episode, we discuss what exactly a registered agent is, why they’re so relevant to business owners, when you might need one, and how to find a great one to help keep your wheels turning.
In this podcast interview, you’ll learn:
- What a registered agent does–and why it’s probably a bad idea to name yourself as a registered agent when you start a new business.
- What can go wrong when you don’t have a registered agent.
- How registered agents get paid.
- What happens to business owners when they get served or miss an important deadline.
- “We like to think of ourselves as the protector of the company from the start to the finish.” – Kent Rockwell
- “There’s a lot of people out there that are starting their second career or their hobby career or whatever it is. Some of them wind up being more successful than they were in their own profession.” – Dean Barber
Dean Barber: Alright, Kent Rockwell, Patrick Eyberg, thanks so much for taking the time to provide some education to the listeners of The Guided Retirement Show. Kent, let’s start with you. You founded Universal Registered Agents, and I want you to talk about what is a registered agent, first of all. I think a lot of times when people say they’re going to retire, they don’t necessarily retire. They may retire from what was a career, then they want to start their own business. And having a registered agent could be a critical part of starting that business, and it’s really relevant to everybody that owns a business out there. So, let’s talk about what a registered agent does.
Kent Rockwell: Yeah, a registered agent, the primary role is to really receive litigation on behalf of the company. So, we’re the address that would receive that litigation within the various states. So, it’s the state statute that is required when you form a corporation, and you have to list a registered agent. It could be a person such as yourself. It could also be a company like ours.
Dean Barber: So, what’s the downfall then of not having a company like Universal Registered Agents and just naming, say yourself if you’re a newly formed LLC, and it’s just you and maybe a couple of employees? Why would I need or why would somebody want to have a registered agent and not just say I’m the registered agent?
Kent Rockwell: Well, really, there’s a couple of things. One, if they were to get their company established and they moved, usually the last thing they think about is changing the registered agent address. And so, they moved in, then perhaps they were to get some sort of process, and then if it doesn’t get to them, they could have a default judgment set against them. So, that’s really the main thing is you want to have an agent that will make sure you get the process delivered to you in a timely manner.
Dean Barber: Alright. So, Patrick, let’s turn over to you here for just a minute. So, you joined Universal Registered Agents here just a few months ago, really, right?
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Patrick Eyberg: That’s right. About three months ago.
Dean Barber: Alright. And so, what is your role there at Universal Registered Agents?
Patrick Eyberg: So, my role is Director of Partner Development that’s going out, currently working with the partners that we have in place that do kind of our corporate service work, and then also establishing new partnerships within that industry, and then also kind of looking outside of maybe some of those that we haven’t kind of looked after, so maybe working with financial institutions, legal law firms, kind of that space, because a lot of the people that are going to start up businesses, that’s kind of their first-stop shop. Hey, let me go visit with this lawyer, this financial person, get all that kind of situated, follow that process. And then, they get to the point of actually filing for their LLC, and it comes up, hey, I need a registered agent. They’re kind of like, what does that?
And that was one of the things that really surprised me being new to the industry is that this industry even existed, hadn’t really thought about being out there, but knowing that it’s a requirement by the secretary of state and that we’re able to go through and actually help kind of this entrepreneur community, let them focus on building up a business, and then we kind of take care of this back in the boring stuff. It’s been really fun to be a part of.
Dean Barber: Nice. Alright. So, let’s talk about– you mentioned the term LLC. And Kent, this may be a question for you. So, there’s different types of corporations. You got your LLC, your Limited Liability Corporation, and you’ve got your Subchapter S corporation, you got your sole proprietorship, and then you’ve got your C corporation. So, is the registered agent something that’s required only for an LLC? Or does a Subchapter S corporation and C corporation, do they have the same things?
Kent Rockwell: No, actually, whatever type of company was set up, we’re available. There’s really some different points to each type of corporation. So, like an LLC, you really have more anonymity, I guess, is the right word for it, but you don’t have to publish who the owners are on an LLC, you do have to publish the manager. S corp, all the profits flow directly from the company to the owners, and C corp, you have like really double taxation because the corporation has to pay taxes as well as the owners. So, this is kind of some of the differences, but we can definitely be the agent for no matter what type of company.
Dean Barber: So, all of those entities require a registered agent.
Kent Rockwell: Correct.
Dean Barber: Okay. So, tell me a story about when something happened, when somebody didn’t have a registered agent.
Kent Rockwell: One of the things that’s really critical as part of having the registered agent is to keep your company current with the state, which means you have to file an annual report once a year. So, if you don’t file that in a report, your company will go into what’s called bad standing with the state, and then all of your protection as a corporation is then lifted. As an owner, if someone wants to sue you, and you are not in good standing with the state, then I guess, your protection as a corporation is not there. It’s really important to file that in a report and keep yourself in good standing. Now, if you don’t pay the registered agent, we have the ability to resign as agent.
Dean Barber: So, what’s in that annual report? Let’s get to some of that, because to me, okay, so I got to file an annual report, how difficult is that? What am I telling the state?
Kent Rockwell: It’s really a pretty simple process. It’s really just to keep your entity in good standing with the secretary of state. So, once a year, they ask you to file an annual report. They’ll usually send you a notice that it’s due. You actually just maybe fill in some stock information that’s different from state to state, but once you file that annual report and pay your fee, and that also differs from state to state, but that keeps your corporate status for the rest of the year.
Dean Barber: So, you’re saying if somebody misses filing an annual report, they lose the protection of the corporate veil. Is that what you’re saying?
Kent Rockwell: That is correct. Now, they can get themselves back into good standing, but then they’ve got to usually pay penalties and fees. And so, it’s really important to keep your entity in good standing by filing that annual report once a year.
Dean Barber: So, you file that annual report, you’re still in good standing, but if you miss filing the annual report, you get sued and you go, oh, wait, I forgot to file my annual report. Can I go back and file my annual report now, so I can protect myself? Or if the lawsuit got filed whenever I wasn’t in good standing, am I in trouble?
Kent Rockwell: Well, technically you could be. We are not attorneys. We don’t really want to give advice. Legally, we knew its way, but really, it is best to keep your entity in good standing.
Patrick Eyberg: Another piece that I thought was really interesting too is when you fall out of good standing with the state is that your name then goes up basically for auction. So, if somebody comes in and they like your name for your company, they can come in and register that name under yours, and you lose your state. You can’t go back like they were saying and pay your good standings after the fact, but if the name has been taken, then you’re kind of…
Dean Barber: So, if somebody wanted to get the infamous name of Modern Wealth Management as an example, and I failed to find my annual report, somebody could come in and take my name.
Patrick Eyberg: That’s right.
Kent Rockwell: It’s kind of like your domain name, you want to keep that protected as well, it’s kind of the same thing in keeping your corporation protected.
Dean Barber: Alright. So when would somebody want to get a registered agent involved? Is this only for somebody that’s newly starting a corporation? Or do you think it’s better for somebody that’s got a corporation they’ve been running for years, maybe they’re doing several million dollars a year in business, but they’ve been the registered agent themselves or they’ve had maybe their secretary be the registered agent, or their CFO is their registered agent or something like that. So, where do you guys come in? Is it only at the beginning? Or is it at any point?
Kent Rockwell: Well, we kind of like to think of ourselves as the protector of the company from the start to the finish. So, during the whole life cycle of that company to when you’re first forming it, filling out your incorporation papers, selecting a registered agent, filing that with the state, and then we help you with your annual report and we help you throughout the entire process of that corporation. A lot of times, what we do see, though, is that companies will start off, like in the state of Kansas, for instance.
All of a sudden, they’re doing business in Nebraska, then they want to go into Iowa. And so, then what we’ll do is we’ll help them qualify that entity in those states as well. So, basically, we will help them set up in their home state, get them into other states. We help them maintain their corporate veil or their corporate status. And then, if they decide to leave that state, then we help them get out of that state, too.
Dean Barber: So, now you start bringing into play here some things that I think get pretty confusing. So, in the electronic world that we live in today, this virtual world, especially in this, I could say post-COVID-19 era, but we’re almost done with it, hopefully, but I think that a lot of people began doing a lot more business online and doing more virtual meetings and those types of things, marketing my goods and services, some making clothing, or I’m doing something and now, I’m selling it on the Internet. I’m selling in different– now, I’m just using maybe my Instagram account, and stuff is getting purchased in states of where I don’t live and that’s not where my primary business is. What constitutes a person having business in another state or doing business in another state?
Kent Rockwell: That’s a good question. And really, it’s a good rule of thumb. If you’re conducting business within that state, you really should qualify or incorporate in that state to do business.
Dean Barber: The question is, what qualifies as conducting business? If I’m sitting in my home and I’m making widgets and I’m marketing those on my Instagram accounts and I got followers all over the world in all 50 states or whatever it is, do I have to then register in all those states because people in all the states are buying my widget that I’m making in my house?
Kent Rockwell: Well, a good rule of thumb is that, especially if you have an employee in another state, you definitely want to qualify to do business in that state. If you’ve got a store in another state, then you definitely want to qualify in that state to do business. If you’re doing transactions over the Web, like an Amazon type of thing, you not necessarily have to be qualified in that state, but it’s also a good idea to. We’ve worked with attorneys and paralegals all the time. And again, we don’t like to give legal advice, but we basically help them. Whatever the attorney says or a paralegal says, they need to be qualified in that business, then we help them get into that stuff.
Dean Barber: I was wondering if there was some sort of a rule of thumb of a certain amount of your revenue, if it was coming from one of those states, then you’ve got to register in those states.
Patrick Eyberg: It’s really just as long as they’re getting set up and identified through the secretary of state. So, one of those things, too. Yeah, you can sell on Facebook or Instagram, but if you don’t set up an LLC or C corp or S corp or something like that, then you’re open to liability and then coming and attacking all your personal assets where that’s the first and foremost spot is set up that LLC, get those protections in place. And then that’s kind of where we come in and help you out as soon as you get to that stuff.
Dean Barber: So, this is really fascinating. So, Kent, how in the world did you think that, oh, this is a business that I should start? You don’t see a bunch of people out there running around saying, hey, I want to be a registered agent.
Kent Rockwell: Yeah, I actually kind of fell into it. I’m an ag major by heart. And so, I got involved 20 years ago or so in the UCC business, which is Uniform Commercial Code. Company I was with was big into the registered agent part. So, we helped build that company up to where we were one of the top three registered agent corporate service providers in the country. We sold that in 2011. Then, I waited a couple of years and decided on registered agents, really what I know. And so, we went out and started this and brought a few people with me from my old company. And we built a really nice business over the last few years.
Dean Barber: That’s good. So, I guess something people got to be thinking about, okay, I’m going to hire this registered agent. They’re not an attorney, but they’re not free. How do you guys get paid?
Kent Rockwell: Right. We charge a fee per year per state. So, one company in one state, we charge about X dollars for that. Then as they go into multiple states, we charge them the next fee on that for each additional state that they go into. And they pay that once a year. And then we allow them to get served twice in each state at no additional charge. So, like, if you…
Dean Barber: You make that sound like a good thing.
Patrick Eyberg: Hey, well, it’s a good service.
Kent Rockwell: Yeah, so if you’re in five states and you get served 10 times, then we don’t charge them extra.
Dean Barber: So, we’re in a pretty litigious society, but I’d be curious because I don’t know, I mean, how often are these companies that your registered agents get sued? Are there some that never get sued? Are there some that get sued all the time? And what’s the scenario here?
Kent Rockwell: Well, it’s kind of interesting. Companies in very few states typically don’t get served ever. Where we see a lot of service, the process is with the retails, like the retail giants are crazy lawsuits. And we typically don’t represent those, not that we wouldn’t take them, it’s just a lot of lawsuits coming and where they have the slip and fall within the stores that…
Patrick Eyberg: That’s the wage garnishments, that type.
Kent Rockwell: And we see some with like medical companies that they tend to get served depending on what type of device they have if there’s a lot of litigation going on surrounding it, that will pick up. We were down in Oklahoma where they were doing all the drilling and everything. Pretty cool’s that, I guess, but some of those when all that started changing, and they’re not doing as much drilling down there, we saw a couple of companies just not be able to pay their bills. And so, then their creditors are coming after them and suing them, and that turns into a lot of litigation.
Dean Barber: Interesting. Okay, so besides doing the annual report and receiving litigation, what else does the registered agent provide?
Kent Rockwell: We also alert them to special tax notices that might come out from the state that a lot of times comes to the registered agent. There’s an email that’s really like official state mail that you get on behalf of the state, will come to the registered agent, and we forward that on to the client. And we log all the mail that comes in and track that. So, if there’s ever a question that they didn’t get something, we have a backup of it as well. We also scan all these services and processes that we do receive. So, it comes into our office. If it’s our client, we accept it, we scan it, we notify the client that it’s there, and then the client has to go out and acknowledge that they’ve received it.
Dean Barber: So, what happens on some of these things? I mean, I’ve never been served and hopefully, never does, it never happens, but what happens if I got served and I missed it or I had some official stuff that was supposed to come to me and I missed it and I missed a deadline or I didn’t do something? What are the ramifications to the business owner?
Kent Rockwell: I mean, the main thing is that if you are served and you don’t acknowledge it or you don’t do anything with it, you can get a default judgment. So, that’s typically what will happen. I mean, that’s one thing we do is we handle litigation. So, it’s pretty much a zero error thing as part of our business. So, yeah, it could be kind of crazy. It’s intimidating, I think, especially when you’ve got a sheriff coming into your office and serving papers. And that’s one thing some clients do not want, is having the sheriff in their office, even if it’s just the garnishment or something, there is that intimidation of the sheriff coming in. And so, he comes into our office all the time, it doesn’t bother us. We just accept it and send it on to…
Patrick Eyberg: What are you here for? Good to see you again, yep, kind of those.
Kent Rockwell: As long as he’s not bringing me divorce papers.
Dean Barber: Yeah. Your landlord is going to be going, what these guys are doing here?
Kent Rockwell: And the sheriff’s always showing up.
Dean Barber: So you’re the founder of Universal Registered Agents. You said you had another registered agent company that you sold. Why would a person want to go with Universal Registered Agents over just looking up? I’m sure you can Google registered agents in the state of Kansas or the state of Missouri or whatever state you live in. You’re going to find a list of registered agents. Why Universal Registered Agents?
Kent Rockwell: Well, that being the primary thing that we have is, we have zero tolerance on mishandling service or process, but the other thing is, just the service that we offer, I believe, is superior to that of other agents, which means we pick up the phone when you call, we act on your behalf to receive process. We usually deliver it to you within 10 minutes after we receive it, and then we keep in touch with our clients on a very regular basis.
And that’s the automated tax calendar that we have. When I was talking about the annual reports, we actually send them a notice 30 days out that their annual report is going to be due, and then we help them file it as well as they need it. So, really, I think that service is the main thing. We are new. We’re still fairly entrepreneurial. And I think that leads us to be better for our clients and with some of the old competitors that have been around for a lot of years.
Dean Barber: Okay, interesting. Now, Patrick, when you say you’re in charge of partnership relationships and taking care of existing partnerships and forming new partnerships, in case, there’s somebody listening to our podcast that is in that financial world, they’re in the legal world, talk to that person about what it is that that partnership means and what you guys do.
Patrick Eyberg: Absolutely. So, our big one is kind of reliability. That’s one of our big focuses. We’re reliable and we take pride in the fact that when somebody calls us up, it’s real people answering the phone, you’re not going through call trees and trying to get to the right person and then ultimately, being kind of left out to dry. So, I think that’s one of the big things. One of the others is just our expert level within the industry. We have through our team about 70 plus years of combined experience that kind of sets us apart.
And then, like Kent was mentioning, my favorite thing is actually our online management portal, a really cool tool for both types of people out there. I kind of separate them into two buckets, the one that I don’t want to remember another password, I just want everything kind of sent to me, we can handle that, everything, like Kent was saying, we scan it and send through PDF format automatically to the correct correspondence. Or if it’s somebody that likes to be more hands-on, they can dive into the portal, they can manage it all themselves. They can see their alerts, the upcoming filings that they might have, and kind of just have that all hands-on approach.
But the big partnership deal in working with us is probably through our revenue share program, which I think kind of sets us apart within the industry. From what I’m learning is we’re not only going out there providing that service, but we also have kind of a say in your business and making sure that you’re successful as well.
Dean Barber: Interesting. Alright. So, you guys talk to me about, I mean, how many businesses are opening up, say, a month around the country where they don’t even know that this registered agent thing is necessary until they go to fill out the corporate paperwork or register with the state.
Kent Rockwell: That’s generally where they call us is because they’re– there’s been just a huge uptick in new business formation since COVID came out. I think as people were getting let go, they chose to go out and form their own business. And so, they get online, they find the incorporation papers for Kansas, for instance. They start filling it out and then they say registered agent and they’re trying to do it themselves and they’ve never heard of a registered agent.
So, they do Google registered agents. And hopefully, we come up pretty high to the top, and then that’s when they call us. And so, we can either help them take it to the next step and file it for them which should be done through one of our partners throughout the country or we can just act as a registered agent. They can file it themselves and set up their company and move on from there.
Dean Barber: It sounds like what you guys are really doing is you’re providing that business owner the ability to focus on what they really know how to do. And that’s running a business. And Patrick, you’re talking about, maybe these people want to get down into the weeds and they really want to look at all of that, I mean, I don’t know, a business owner that that’s what they like to do, especially the entrepreneurial type business owners. They got other things to do. And either they’re going to have to hire somebody to do that type of stuff as part of their bookkeeping or financial record reporting and those types of things or have a Universal Registered Agents come in and do a form.
Kent Rockwell: We take care of the corporate maintenance for them. They can take care of running their business. And it works out well for both of us.
Dean Barber: It’s fascinating because, again, when we first met and we met virtually for the first time during COVID. I’m like, what the heck are you guys doing? And then we start talking about, I’m like, and I’ve been in the financial world for almost 35 years. And of course, I don’t help people start businesses like that. I leave that to the attorneys, but I have several entities. I don’t know who my registered agent is, I don’t know if it’s my CFO, or obviously, it’s not me because I don’t do any of the annual filings or any of that, but I’m going to have to look into that for myself. And I think there’s probably a lot of people going, maybe I better understand what this is and how it is. So, on your website, what can people find there?
Patrick Eyberg: So, on our website, we have options to see all of our different services. So, we offer registered agent services, formations and corporation services, and then also our independent director services. You can also access the online portal that I was talking about. And then we also have kind of FAQ and blog section. So, if you want to go in, learn more about what a registered agent does, what are some of the benefits that we provide, and then also like that independent director piece I was talking about, go ahead and check it out and learn more.
Dean Barber: Alright. You’ll find a link to the website for Universal Registered Agents in the show notes. And if you want to have a conversation, guys, do you charge anything if somebody wants to contact you and have a little conversation about what you do and think they might need your help?
Kent Rockwell: No, we do it every day. So, they can either call our 800 number or go to the info at URAgents.com and get us from there.
Dean Barber: Sounds good. We’ll find that link in the show notes. Guys, I really appreciate you being here as part of The Guided Retirement Show. And I know that you don’t have a lot to do with retirement, but I wanted to have you guys on because I know that there’s a lot of times that people will leave their main career, but they say, you know what, really, this has been a passion of mine. I want to do this and I want to do that. And there’s a lot of people out there that are starting their second career or their hobby career or whatever it is. And some of them wind up being more successful there than they were in their own profession as they were working.
Patrick Eyberg: That’s right. You go out and focus on your passion, build that up, we’ll handle the rest.
Dean Barber: Perfect. Guys, thanks so much for being here.
Patrick Eyberg: Thank you.
Kent Rockwell: Thanks.
Dean Barber: Thanks for joining us on The Guided Retirement Show. I enjoyed the conversation with Kent and Patrick. You can find a link to their website in the show notes. And if you have questions and would like to speak with one of our financial advisors, you can find that link in the show notes as well.
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Investment advisory services offered through Modern Wealth Management, Inc., an SEC Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.