Registered agent

Definition

The person or service that receives legal papers for the company in a state.

Why It Matters

Every entity has to name one in its home state and in every state where it registers, and the address on file is where lawsuits arrive. Buy the stock and the old listing follows the company, so update it on day one or a suit gets served to the seller's accountant and becomes a default judgment nobody saw. An asset-sale buyer's new entity needs its own agent before closing, and a commercial service costs about as much a year as one hour of the lawyer it saves.

In numbers: A registered-agent service runs $100 to $300 a year per state, against a default judgment that starts at whatever the plaintiff asked for.