Why you should have a professional Registered Agent for your dropshipping business
Dropshipping has become a very popular business model for young entrepreneurs selling products on Amazon, Ebay and their own online stores. While it's relatively easy to get your dropshipping business started, there are some important factors to take into consideration before you start conducting business.
We'll talk about the importance of forming an entity and naming a professional registered agent for your new business.
So you've created your online store or applied to sell on Amazon, maybe even both. But what do you do next? The next step entrepreneurs usually take is to form their entity, which is where we can help.
While it is common to form an LLC for your dropshipping business, its is ultimately your decision on the structure you would form. You can form a Corporation (Inc.), a Limited Liability Company (LLC) or any entity structure offered by the state in which you form your entity. It is important to understand what an LLC and a Corporation is and their differences. We recommend to review more information of the differences between these structures here
There are multiple reasons why you need an entity prior to engaging in any dropshipping. First, suppliers will require you to be incorporated and have an entity. Suppliers may also require you to have other tax related documents as well. These documents need to be discussed between you and your supplier.
It is also important to understand that having an entity, such as an LLC, will provide liability protection against your personal assets. In the event of a lawsuit, your personal assets will be protected. If you were not incorporated and operating as a sole proprietor, then your personal assets would be at risk in the event of a lawsuit.
One more thing we will say about forming an entity, we would strongly recommend to form an entity in the state you physically operate in. Please also note, depending on other business activities you may have to qualify to do business in other states.
When forming an entity, you will need to list a registered agent. To learn more about what a registered agent is, please visit here. In summary, it's the physical address you need to list in the state you incorporate to accept Service of Process and this is a requirement under corporate statutes.
While you could use your own address, there are reasons why would recommend against that. To understand why, we would recommend reading more here about naming a professional registered agent
When Service Of Process (SOP) is served, its the beginning of a lawsuit. The SOP is delivered to the address you have listed as the registered agent. When using a professional company such as US Registered Agents, we accept that notice of process and notify you via email and overnight the SOP documents to you.
Let's say you operate your dropshipping business from your home and you use your home address as the registered agent address. Service of Process could be served while you're at the grocery store and it's left in your mailbox. The mailman inadvertently takes the SOP. and you have no idea you've been sued. You run the risk of loosing your case to a default judgment, all because you didn't know you were served. This is one of many examples we've seen over the past 20 years. When working with a professional registered agent, we email you and overnight a courier package to you so you can handle the SOP properly.
Naming a professional registered agent also provides a level of protection against you and your personal information. When listing yourself, you list your personal details for public record. When people search your business, the registered agent information is available. When using a company like ours, our name and address would appear, as opposed to yours.
As a foreign individual or business owner and not having a physical prescience in the United States, you are still require to list a registered agent when forming and entity.
There are many more reasons why a professional registered agent would be recommend, but these are more of the important reasons.
To speak with a representative to learn more about entity formations and registered agent service, please call us at +1-845-398-0900 or contact us and a corporate service specialist will be happy to explain more.
If you would like to utilize US Registered Agents, Inc. as your registered agent, use the discount code "DROPSHIP" when checking out for a lifetime $99 per year rate, which is discounted from $129 per year.
**Please note, US Registered Agents, Inc cannot provide and legal and/or tax advice. Information contained in this article should not be used as such. Please contact us if you have any further questions.