By law, every LLC needs to have a registered service agent. Although becoming a Registered Agent for your LLC or corporation will save you the cost of a professional Registered Agent Service, there are other responsibilities that you will have to fulfill that can be stressful and time-consuming. In this article, we discuss whether or not you can be your own registered agent and the advantages of hiring a third-party service.
What is a registered agent?
Registered agents are individuals, or third-party organizations, designated to receive service of process on behalf of the business it is registered for. If your business is served with a lawsuit, for example, they would need to be notified before they were served. A Registered Agent would then receive that notification because they are the designated point of contact.
Can I be my own registered agent?
You can act as your own Registered Agent for a corporation or LLC as long as you meet the following legal requirements:
- You have a physical street address in the state where your corporation or LLC is formed.
- Your LLC or corporation cannot name itself as its own Registered Agent. If you do not use a Registered Agent Service, you would then give your personal name as the Registered Agent for your business entity.
- Your address must be a physical street address. PO boxes are not allowed.
- You must physically reside or have a physical office in the state of the business. If the agent is a business, it must be a company registered in the state.
Advantages of using a registered agent
Compliance with the Law
If you are unfamiliar with the entire process of dealing with legal issues on behalf of a business, or the correct processes to register as the RA for your business, it can feel overwhelming. Compliance requirements often require the completion of lengthy and often confusing forms using information from various sources. By choosing to employ the help of a registered agent service, you can avoid unnecessary state penalty fees and any stressful mistakes that could cost you your business.
Focus on the business
Compliance requirements can be both time-consuming and labor-intensive and require a lot of attention. This admin work can distract you from other important parts of running your business and will be unnecessary stress that is added to your day. Most business owners prefer to have an outside source deal with the compliance requirements, so they can focus on building and running their business.
Flexibility
Registered agents need to have regular business hours in order to accept service of process. This can be difficult for small business owners who often are not able to stay in an office all day and do not have full-time employees. If this sounds like something you would struggle with, then perhaps hiring an agent would be a good solution.
Privacy
If you plan on being your own registered agent, you may end up having to use your home address, which will require you to make your address public. This raises privacy concerns, and it could mean a process server could come to your home to serve you with notice of a lawsuit, something you may not want to deal with at home.
Should I hire a registered agent?
When you decide to act as a Registered Agent, you need to make sure that the amount of work you will need to put in is worth the amount of money you eventually save. It’s a major responsibility to take on as you will be acting as the legal point of contact between the business and the state. Certain requirements are expected of you and if you do not fulfill your duties there will be consequences you have to face.
If any of the above-mentioned factors mirror your type of business, then hiring a Registered Service Agent may be the best way forward.