In a couple of previous articles, I've explained the difference between a company's principal office and the resident agent. I've also explained what addresses can be used for a principal office. In this blog, I'm going to explain what a resident agent is, who can be a resident agent, and what addresses can be used for the resident agent.

What is the Resident Agent?

The resident, or in some states, the registered agent, is a person who has a location within the state in which your company is registered. (The registered agent can also be another entity.) That person — if it's a person — has to be at least 18 years of age and has to have an address within Maryland. If it's a company or a corporation, it must be registered in Maryland and have its own address.

What is the Purpose of a Resident Agent?

In short, every state wants every entity that's registered in that state to have an address where, if somebody sues that company, that person or company can be served with a summons or a complaint.

In Maryland, there is one primary reason for a resident agent. When you register your business in a state, that state is going to make sure that if there are problems, an employee of yours hurts somebody during the course of their work and there is a claim against the business, the business can be found and served within that state.

Who Can Serve as a Resident Agent?

Either an individual or a registered entity itself can serve as a resident agent. We often recommend to our clients that they use corporate resident agents for the following reasons. An individual serving as a resident agent is completely fine. In fact, you can serve as your own resident agent for your own entity, and can actually use your home address. But — let's say you're on vacation, and your company gets sued. The subpoena or summons is actually served via certified mail to your home address. If you're on vacation and you don't get that mail,  by the time you receive it, it may be too late to actually answer that complaint. This is why it is a good idea to have a corporate resident agent because that agent is going to maintain an office within the state and be staffed 9 to 5, so any mail or any service of process received will immediately be scanned and sent to you because you've registered with that agent to have them forward important correspondence to you.

There are different requirements for principal office and resident agents, and it can get really complicated. If you have any questions, give us a call or put a comment in the comments section on our website.  In addition, please subscribe, so you can continue to get all of our tips for business owners.