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April 2015 • www.CPAPracticeAdvisor.com 13 Registered Agents - Who Needs Them? By Gail Perry, CPA, Editor-In-Chief I f you have determined that you have nexus in a state, and you are paying taxes or incur- ring a tax liability in the state, you are required to have a registered agent in that state. It doesn't mater that you are taking care of all of your required tax filings on a timely basis. Te registered agent is the person or business that has been designated to receive legal notifcations on your behalf. (Note that having a registered agent in a state does not in itself constitute nexus in that state.) Te selection of a registered agent is not a trivial mater. Tis agent is required to have a physical address in the state (post ofce boxes and p r i v a t e r e nt e d m a i l b o x e s d o n't c ou nt) a nd b e av a i l a ble d u r i n g nor ma l busi ness hou rs to accept ofcial state documents including any legal process, notice, or demand. Te registered agent can also receive tax and other corporate information from the state. Te registered agent can be a person or a business. Te reg istered agent does not have to work for your company. If you are an ofcer of your busi- ness and live in the state where you do business, you can be your own r e g i s t e r e d a g e n t i n t h a t s t a t e . Somet i mes, however, compa n ies hire registered agents even in their home state so that they are certain to receive any legal notices that have been served. A nother reason to hire a registered agent in your own state i s t o pr ot e c t t he pr i v a c y of t he bu s i ne s s a d d re s s . For e x a mple , businesses run from a home might not want the home address to be part of the business's public record. W hen a company f les for legal stat us in a state, includ ing t he l i c e n s e t o c o l l e c t a n d r e m i t ta xes, one of the items on the a p p l i c a t i o n f o r m w i l l b e a request for the name and con- tact information of the regis- tered agent w ithin the state. A n a lter n at i ve to a sk i ng someone you know to be your registered agent is to hire a company that is in the busi- ness of serving as registered agents for out-of-state busi- nesses. A quick online search w ill produce a number of options. Companies that prov ide reg istered agent services must be approved by the states in which they operate. Ty pically you will pay an annual fee for the agency service. Most compa n ies t h at prov ide registered agent services have agents work ing in all 50 states. If you do bu si ness i n severa l st ates, t hese registered agent companies can be an excellent solution because you can have one company represent you in multiple states. Te registered agent will accept any legal documents that are deliv- ered to the agent's address on your behalf and forward them to you at whatever address you choose. Make su re t he person or bu si ness you choose as your registered agent is a responsible entit y whom you can trust. Legal documents should not be ignored, and if your agent neglects to forward legal notices to you and, as a result, you don't respond to those notices, you could be puting your business in jeopardy. Failure to have a registered agent in a state in which you are doing business can result in your being prevented from doing business in t hat st ate a nd c a n a l so resu lt i n penalties. APRIL SALT Checklist Determine if your clients are complying with reg- istered agent rules in all states where they are licensed to do business. If not, help get them set up with registered agents. Contact your clients to determine if they are registered to collect and remit sales tax in all the states where they are doing business. Create a checklist such as the one in the ac- companying article to help gather information you need from clients who might need to register to collect and remit sales tax in various states. Assist clients with registrations in states where they are making taxable sales. Send a reminder to all clients that they are re- quired to register to do business and have a reg- istered agent in any states in which they are plan- ning on expanding their business reach (and remind them that you can help them with this process). ✓ ✓ ✓ ✓ ✓