June 30, 2021
For first-time entrepreneurs, building a business from the ground up is the main focus of everyday tasks. If you’re running a small enterprise, your organization is most likely a one-man-show, with you at the center wearing multiple hats. One of the crucial roles that many entrepreneurs contemplate is that of a registered agent.
Can I be my own registered agent? This article aims to give you a good overview of what a registered agent is, its associated responsibilities, and the pros and cons of being one for your own company.
What Is a Registered Agent?
So precisely what is a registered agent? A registered agent is authorized to receive a service of process (SOP) that calls the business to respond to legal action, including correspondence with the state notices and other documents requiring compliance. Depending on where your business is located, a registered agent may also be a resident agent, registered office, statutory agent, or agent for service processes.
Why Do States Require Them?
Do I need a registered agent? Yes. Registered agents are required by US business laws for each Limited Liability Company (LLC). An LLC is a business structure where a company is considered as a separate legal entity from its owners. Because of this distinction, it has requirements with how it will interact with the state government and legal representatives.
Having a physical mailing address to receive communication is not enough to become a registered agent; there must be an actual person authorized to accept documents on behalf of the company.
Because of the nature of the role, registered agents must have a physical address in the state where the business is operating. If papers—such as official notices, lawsuits, or court summons—are to be served to the company, these would be delivered to the registered address and received by the registered agent.
Can I Be My Own Registered Agent?
Yes, you can always be your own registered agent. There should be nothing that prohibits you from becoming your own registered agent, as long as you have an address located in the same state as the business you represent.
Should I Be My Own Registered Agent?
While there are some advantages to being a self-registered agent, there are also disadvantages to be considered.
One of the advantages of this is the price. Being the business owner, you don’t have to pay for the cost of having a professional registered agent service. For smaller enterprises or startups—where owners generally do everything from marketing products to mopping the floors—being a registered agent could simply be another role to add to the list.
If you’re highly organized and can keep track of all incoming communications and deadlines—such as annual report due dates, business-related renewals, and other time-sensitive documents—being your own registered agent should come naturally to you.
This D-I-Y method, however, has certain drawbacks, one of which includes having your name and physical address appear on public records—such information would be easily searchable on search engines and online maps for public access.
You must also be at the registered physical address during business hours to receive important documents. This may sound simple for small and medium-sized enterprises (SMEs) operating in one location, but for bigger businesses—with presence in multiple states—it’s physically impossible to be present in each location at the same time.
If you don’t want to be the registered agent and don’t want to hire a professional registered agent service, you could assign the role to one of the people who are already in your company: a manager, partner, or anyone who can effectively fill the position.
NOTE: Every LLC needs to have a registered agent.
Other Options for Obtaining a Registered Agent
If you don’t want to be your own registered agent and neither does anyone in your company, the best option is to hire a registered agent service. Registered agent services are legal entities that act as the registered agent for your business. Depending on where you’re located, and the specific company, annual fees for these services can range from $50.00 to $500.00. These companies would be in charge of receiving legal documents for you using their physical address during regular business hours. They could also inform you about actions you need to take and deadlines to meet, as well as sort, organize, and store your legal documents.
These extra services will affect the price, so make sure to research the best registered agent services on the market. You might also want to check out the best LLC services if you have yet to start your business.
|You can’t simply have a PO box as a registered address.|
|You must be present during business hours at your registered address if you’re the registered agent.|
|You can assign the registered agent role to anyone over 18 years of age, as long as they have a physical address in the same state of the business.|
|Registered agent services can provide extra perks.|
|Your name and address will be a matter of public record if you’re a registered agent.|
NOTE: You can easily be searched for on platforms like Google if you are your own registered agent.
How to Choose a Registered Agent
If you decide to secure a registered agent service, here are a few things you should consider:
Remember that a corporation-registered agent will receive legal documents, many of which contain sensitive information. The registered agent service must be a company you’re comfortable sharing confidential documents with.
Know what services you require and what they offer. Some companies simply receive documents for you, which is the primary duty of a registered agent. Some companies may also provide secretarial services to remind you of deadlines and shoulder other related administrative work.
The more services offered, the more you pay. It’s always best to compare prices, as many companies might offer more services than others relative to their asking prices.
Pros and Cons of Being Your Own Registered Agent
Take a look at the good and the bad things of being your own registered agent:
Being your own registered agent is free. For the frugal entrepreneur, saving on paid services can outweigh everything else. Aside from savings, it’s also suitable for those who like to safeguard confidential communications. If you have a manageable-sized business entity and want legal and sensitive documents to be seen only by you, being your own agent makes sense.
Perhaps the biggest con of being your own agent is the loss of privacy. Being a registered agent means that you and your address become a public record, especially with the advent of the internet. If you’re declaring your residential address, you can expect to have no boundaries between work life and private life.
The other con of being your own registered agent is that you need to be physically present at your registered address during business hours. Entrepreneurs usually need to run to meetings and cannot be stuck in one place.
The last con is about safety. Combining the aforementioned issues could be a security issue; those with bad intentions can find you. If you registered your home address as the receiving address, you’d also expose your family to malicious minds. If you’re facing a lawsuit, there are online legal services you can consult.
Designating the role of a registered agent is something that entrepreneurs should carefully think about. The position may sound simple, but it entails many caveats. Its merits include being able to save on fees from hiring a professional. In addition, you’ll also be sure that you only see sensitive documents.
In exchange for these benefits are the risks of being a registered agent, especially with personal privacy, as your name and address will be easily searchable by anyone on the internet. And you must always need to be at your registered address during business hours.
If these issues are something you can live with, being a self-registered agent can be a good decision. You could also delegate the role to someone already in your company or pay for registered agent services.
There are very few requirements as to who can be a registered agent. Anyone who is at least 18 years old and has a physical address where the business is currently operating can be a registered agent, including the business owner, a partner, spouse, or an employee (regardless of position).
Yes. Each state has its own laws, regulations, and political jurisdictions. Therefore, you need to have a corporation-registered agent for each state to which your business is registered and operating. In cases like these, being a self-registered agent is not feasible; you need to assign the role to others.
If you’re thinking about this option, you need to consider your family member’s situation. Their address will be public record, and they’ll be required to stay at that address during business hours.
This depends on the setup. Can I Be My Own Registered Agent? Owners can choose who they want to be assigned as the registered agent. Those who own and run a small organization usually wish to consider themselves as their own registered agents.