If you’re a foreign entrepreneur wishing to start a business in the United States, I expect you may have many questions about the process. Non-citizens can own a U.S-based Limited Liability Company (LLC) or C Corporation, and like U.S. residents, non-resident business owners must comply with federal, state, and local rules and regulations to legally form and operate a business entity. Among those requirements is designating a registered agent in the state where the foreign owner registers their company and other states where it will conduct business.
What Does a Registered Agent Do?
A registered agent is responsible for accepting service of process and important government correspondence on behalf of an LLC or Corporation.
Examples of what registered agents receive include:
- Subpoenas
- Court summonses
- Other lawsuit-related notices (e.g., complaints, motions)
- Official federal and state correspondence
- Tax notices from the IRS and state and local tax authorities
- Wage garnishment notices
- Corporate filing notifications
Having a registered agent is not only a legal requirement, but it also provides a number of benefits:
- Provides peace of mind that time-sensitive legal and tax documents won’t be overlooked, misplaced, or mishandled.
- Ensures your company is properly notified of any lawsuits against it.
- Protects sensitive information from being seen by unauthorized persons.
- Protects your privacy as a business owner because your registered agent’s address goes on the public record rather than your personal information.
Who Can a Foreign Business Owner Choose as their Registered Agent?
Whether a U.S. Citizen or non-citizen, you have the same registered agent options as any other business owner. The rules vary from state to state regarding who may serve as a registered agent.
Generally, one of the following options would qualify as a registered agent for a foreign business owner:
- An employee who lives in the state
- A friend or family member who lives in the state and meets the age and availability requirements
- A commercial registered agent services provider
- An attorney, accountant, or tax preparer that offers registered agent services in the state
Something to consider when choosing a registered agent is whether the designated party can fulfill the state’s requirements at all times. For example, most states require a registered agent to be available during regular business hours, Monday through Friday. Individuals might find it challenging to comply with thatÂ…will they never go out to lunch, get sick, or take a vacation?
Also, if an LLC or Corporation operates in multiple states, it will need a registered agent in each of those states. That creates a problem if your company uses an individual as your registered agent: one person cannot be in multiple places at the same time!
For those reasons and others, choosing a commercial registered agent, like CorXec, that is equipped to provide services in all 50 states offers peace of mind.
Registered Agent Address vs. Business Address
A company’s registered agent address differs from its principal business address. Typically, business formation documents require both. Most states will only approve an LLC or Corporation if it has a legal street address as its principal business address.
While a registered agent’s address is where the service of process and other official government documents get delivered, it is not meant for routine mail delivery (e.g., bills, letters, junk mail, etc.).
This is an important consideration for foreign entrepreneurs who wish to set up an online store based in the U.S. but do not have a physical presence. A physical address is required for other things, too, such as applying for an EIN (Federal Tax ID Number) and opening a business bank account. The ways an entity can have a principal business address in a state without a physical location of its own are to get a virtual business address or receive permission to use someone else’s legal street address.
Choosing a State for Your Business Entity
Naturally, before determining your principal business address and designating a registered agent, you must decide which state to form your LLC or Corporation in.
Some considerations in choosing a state of formation include:
- The state’s business environment (e.g., laws, regulations, and restrictions)
- Access to resources such as materials and employees
- Applicable taxes and tax rates
- Licenses and permit requirements
- Ongoing compliance tasks and fees (e.g., annual reports, license renewals, tax filings, and other reporting requirements)
Popular states that attract non-resident-owned businesses include California, Delaware, Nevada, Texas, and Wyoming. I highly recommend consulting with a knowledgeable attorney and tax professional about states’ business laws and tax codes so you can make an informed choice. Those experts can also help guide you through the other steps involved in launching your LLC or Corporation in the U.S.
How Non-Citizens Can Designate a Registered Agent
The state applications to form an LLC (Articles of Organization) or Corporation (Articles of Incorporation) include a field for business owners to identify their registered agent. This puts the LLC’s or Corporation’s registered agent on the public record.
Before doing so, the business owner must enter into an agreement with a registered agent and pay the required fee. Most registered agent services have an online ordering system where you can sign up for service and pay electronically.
Continue Your Education
I’ve written a number of great educational articles on the subject of registered agents and business formation. Below is a partial list of content to help keep you learning about the process.
- What Is a Registered Agent?
- What is a Registered Office?
- How to Find and Compare Registered Agent Service Providers
- How to Appoint a Registered Agent
- Can You Use a UPS Store or PO Box for a Registered Agent?
- How to Start a Business in the United States as a Foreigner
- Can an H-1B Visa Holder Start an LLC?
Appoint CorXec as Your Registered Agent
CorXec can act as your company’s registered agent in any state ensuring your corporation or LLC stays compliant with any service of process, legal notices, or official mailings.
