I am frequently asked the same questions about registered (or resident) agents. Here is a FAQ to help answer those questions.
Q. Why do I need a registered agent?
A. Every state (except New York, for some reason) requires that you have a person or company resident in the state you form in and qualify to do business in to accept service of process (i.e. a lawsuit). The purpose is so that someone suing you has a place in which to find you, rather than searching around the state for you. You wouldn’t want to pay a process server to search the entire state of Alaska or Texas or California for the company you want to sue. So the name and address of the registered agent is available at each state’s Secretary of State to streamline the process.
Q. If I form in Wyoming, and qualify to do business in California, do I need two registered agents?
A. Yes, you will need a registered agent in Wyoming and one in California.
Q. Why can’t I just use the Wyoming registered agent for both?
A. Because the Wyoming registered agent is not resident in California. You need a resident in each state.
Q. What if I don’t pay the registered agent?
A. The registered agent will resign and their name will be taken off the state list. If your entity does not have a registered agent, the person suing you can ask the court to permit notice of the lawsuit to be published in a newspaper. These notices are in very small print (you’ve seen them in the newspaper under Legal Notices). There’s a very good chance you’ll never know about the lawsuit, and thus not answer the complaint. When you don’t answer in time, the plaintiff (the person suing) can apply to the court for a default judgment. Meaning you will have lost the case without ever getting your day in court. The better option is to pay your registered agent so you can receive timely notice of a lawsuit.