Everything You Need to Know About a Registered Agent for Your Trading Business

Navigating all of the legal and logistical requirements of forming and running your own business can be overwhelming. You need to be sure your operation is compliant on a local, state, and federal level in order to set yourself up for long-term success (that’s why we always recommend consulting a professional to help with the process).

One of the requirements for compliance that can sometimes be confusing is the designation of a Registered Agent. Especially if you’re running an active trading business, it can be difficult to determine what is really necessary to meet this requirement. Let’s break it down so you can make the right decision for your enterprise.

What is a Registered Agent?

A Registered Agent (RA) is a designated individual or company who can receive service of process on behalf of your business. “Service of process” refers to official notices, tax information, legal documents, and other mailings from the state and federal government. Your RA is essentially the point of contact between your business and the state.

States require entities to have an RA to ensure everyone receives due process. In other words, they need to be able to assure your business has been notified of any legal proceedings or issues before moving forward with them.

What are the required qualifications of a Registered Agent?

Official requirements will vary from state to state, but generally an RA has to meet the following criteria:

• An individual at least 18 years of age OR a third-party company
• Must have a physical address in that state (P.O. boxes do not qualify)
• Availability at the listed address during normal business hours

If you meet the conditions above, you do have the option of acting as your own Registered Agent. We usually recommend our clients take this route and act as their own RA.

Do I need to hire an RA for my trading business?

A majority of small businesses have no need to hire out for a Registered Agent. As many trading entities consist of only one or a few individuals, they usually fall in this category. If you’re already operating out of your listed business address on a regular schedule, you’ll have no problem meeting the RA qualifications simply going about your normal workday.

In fact, as an active trader, acting as your own Registered Agent will save you money (as you won’t need to pay costly third-party fees) and ensure that important documents are kept private and delivered to you directly.

When would it be beneficial for a trading business to hire an RA?

Most of the time, it is more prudent—financially and practically speaking—for someone trading as an entity to act as their own RA. However, there are a few select circumstances in which you may want to consider hiring a Registered Agent service:

• If your trading operation is extensive and it will be difficult to keep track of important mail/notices
• If you don’t operate out of your officially listed address or will not be available at that location when required
• If you’re running your trading business in a state you don’t reside in or multiple states

When it comes to structuring your own active trading business for the most savings come tax season, you can run into a lot of ambiguity trying to figure out the best solutions. At Trader’s Accounting, we’ll take care of your business entity and tax strategy needs, so you can focus on trading.

Contact our team today so we can help you form your trading business, implement a tax plan, and maximize your trading dollars!