- What is a registered agent?
- What does a registered agent do for my business?
- Can I be my own registered agent for my LLC?
Q: Can I be my own registered agent?
A: In some cases, Yes – it is possible to serve as your own registered agent. That doesn’t mean it’s a good idea though. Taking on the extra responsibility is stressful and can lead to serious legal problems if you don’t execute it perfectly.
Businesses of all sizes are launching remotely. People are increasingly aware that they don’t need an office space to build a successful business.
In fact, Gallup has shown that operating remotely has wide-ranging benefits for businesses of all sizes.
With this shift comes the freedom to register your business anywhere. All you need is an address within the state and someone to serve as your registered agent.
This second feature often confuses business owners. Despite their deep importance, registered agents are often less understood than other aspects of business registration.
If you’re wondering, “can I be my own registered agent?”, this article is for you.
We’ll explore if you can serve as your own registered agent and if it’s a good idea to do so.
To begin, let’s give a proper definition of “registered agent”.
- What is a registered agent?
- What is the benefit of hiring a registered agent?
- Can I be my own registered agent (statutory agent)
What is a Registered Agent?
A registered agent is an entity designated by a business to receive important legal correspondence.
Most often, registered agents are responsible for receiving documents related to lawsuits or summons.
They also receive mail from the government concerning your business’s legal standing and tax status.
In practice, registered agents serve as a clear link to the government for LLCs. They are in place to ensure that your business is always able to receive government communications.
This helps your business keep everything in legal order and reassures the government that they will always have a clear line of communication with your business.
In almost all cases, registered agents need to have an address within the state of the business they are serving. This is because the state government needs to have an effective channel of communication with them.
Not only are registered agents responsible for mail, but they must also be available during business hours for government phone calls.
In many cases, registered agents are also supposed to be available for in-person meetings with government officials.
Who Can Be a Registered Agent?
The regulations around registered agents are fairly loose.
Anyone can be a registered agent provided they:
- Are at least 18 years of age
- Have a street address within the state your business is in
- Are present during your business’s operating hours
This means you can name a wide range of people to serve as your registered agent. It’s important to note that they must be physically present at the address listed during your business’ operating hours.
Alternatively, you can use a company to provide registered agent services for your business. Many companies offer registered agent services to other businesses.
However, that doesn’t mean your business can serve as its own registered agent. Companies that offer registered agents assign a specific agent to your business.
Does My Business Need a Registered Agent?
Not every business needs a registered agent.
If you are a sole proprietorship or a general partnership, you fall under the category of common law business entities.
That said, if you are an LLC or corporation, you will need a registered agent. In fact, you can’t legally register your business without designating a registered agent in the process.
Without a registered agent, the government won’t register businesses. They rely on the designated agent for reassurance that they will be able to communicate properly with the business.
The government also requires a registered agent in the interest of the business. Having a single dedicated person in charge of corresponding with the government simplifies communications and makes it easier for businesses to stay in good legal standing.
Do Registered Agents Need to Be in the State?
Registered agents need to have an address in the state where the business they represent is registered.
This is simply because it ensures efficient and effective communication between the business and the state.
If the person the state was trying to contact was based outside the state, that would introduce unnecessary variables into the process. There would be more delays and possible losses in the process.
Having an address in the state means the registered agent can quickly receive mail.
It also means the government can meet with the registered agent at that address should they want to serve a summons in person. This is rare, but it does happen occasionally.
The government needs a way to communicate with your business. When a registered agent provides an address within the state, the government’s side of the agreement is fulfilled.
Once they drop off the mail, the responsibility is on the business.
If a registered agent has a fast and effective way to forward the mail to a different location, everything works out perfectly.
If they don’t, that’s on the business. The government isn’t responsible if your business misses something important.
This means you don’t have to worry about finding a registered agent in the state of your business. You get a professional, reliable registered agent that will handle all of your correspondences with care.
What is the Benefit of Hiring a Registered Agent?
In the world of registered agents, there are a plethora of options.
Technically, anyone you designate that meets the government’s criteria can serve as a registered agent.
That doesn’t mean everyone is equally up to the task, though.
Professional registered agents have important skills and dedicated work hours they use to serve your business.
This means they are uniquely positioned to help your business in a number of important ways.
Legal Correspondence is Crucial
The mail your registered agent is responsible for is the most important mail your business will receive.
Unlike typical business mail, the mail sent to your registered agent will consist entirely of legal correspondence. These correspondences will almost always need to be actively addressed and will often have pressing deadlines.
As Forbes states, without the help of a professional registered agent, this mail can easily get mixed up or lost in your other business mail.
Knowing this can cause business owners a lot of anxiety. Every time the mail is dropped off there is a chance that something critical is waiting inside.
On the flip side, if you aren’t exceptionally vigilant, you can easily miss an important piece of mail from the government. You may be late in opening it or accidentally throw it away entirely.
The Potential Consequences of Missed Mail
Missing this kind of mail can seriously interfere with your business’s success and growth.
Sometimes the mail is a letter from the government informing you that you need to update a piece of information in order to comply with business regulations.
If this is ignored, your LLC coverage may lapse. This in turn leaves your personal assets vulnerable.
If something like this happened and your business took a turn for the worse, you could lose your house, car, and personal belongings as a result.
In less severe instances, you may simply need to provide additional information or pay a fee in order to avoid a fine.
Even then, missing the letter can leave you paying unnecessary fees that could have easily been avoided if you had a dedicated registered agent to inform you sooner.
Finally, for those asking “can I be my own registered agent?” you need to consider the possibility that you may miss a summons.
If someone were to file legal action against your business, you would need to legally prepare yourself to face it.
Were this to happen, you would be informed through your registered agent. If that information isn’t promptly addressed, your chances of success quickly dwindle, and your business might end up taking a serious hit.
When You Can’t Be Available…
There’s also a serious issue facing people who don’t have a professional registered agent when it comes to phone and in-person communications.
The government may call your registered agent during your business’s operating hours.
Unfortunately, if the registered agent isn’t a professional, they may be busy during incoming calls.
This opens you up to many of the same risks of missed mail. You may miss important deadlines and be forced to part with your profits as a result.
The same is true of in-person subpoenas. If you operate entirely remotely or are in the process of switching to a remote workspace, you may not be there to receive these subpoenas when they are delivered.
Even if you are, it might not be the best for your morale and appearance. Being served a legal summons in front of your employees or in a busy business center can be highly demoralizing.
A professional registered agent eliminates the need to worry about all of this. They act as general contractors for your business, allowing you to avoid all the messy situations we’ve mentioned.
If the government calls, your registered agent is ready. They’ll always be there to answer, ensuring any important information reaches you before you run into fines or legal issues.
They also spare you the stress of receiving summons during your working hours. Instead, these documents will be delivered to your registered agent’s address.
After receiving them, your agent can discreetly communicate the information to you.
Can I Be My Own Registered Agent for My Business?
Despite the many benefits of hiring a registered agent, you may be wondering if you can serve as your own.
On the face of it, it seems like a great way to save money and simplify your business’s operations. But things are often more complex than they appear on the surface.
Let’s explore the possible answers to the question “can I be my own registered agent?”
From a legal standpoint, you can probably serve as your own registered agent.
In most cases, a business owner can serve as the business’s registered agent. The entity itself, however, can’t.
If you meet the specific criteria for your state, there’s nothing preventing you from legally listing yourself as the registered agent for your business.
You will need to have an address within the state to be your own registered agent.
If you live in the state, you can list your home address. If you are registered in the state using a business address but operate remotely, you can usually list your business address and have your mail forwarded to you.
It’s important to check with your Virtual Office provider to ensure your mail is forwarded frequently enough for this to work.
You need to receive these government documents are arrive promptly to avoid missing important deadlines.
You’ll also have to submit your name and address to the public registry, compromising your privacy and security.
This is another reason why services like Inc Authority are so beneficial. You don’t have to worry about the timing of your mail forwarding, and you protect your personal information.
You’ll also need to be available during business hours to receive incoming phone calls from the government. While you can technically let these calls go to voicemail, doing so is almost always a recipe for disaster.
So yes, in most instances you can serve as your own registered agent.
Is It a Good Idea Though?
Just because you can do something doesn’t mean you should.
While it might seem like being your own registered agent is a great idea at first glance, a closer inspection shows a seriously skewed risk-to-reward ratio.
Being your own registered agent requires a serious amount of energy and dedication. You have to pay close attention to every piece of incoming mail, quickly and effectively understand what government documents are telling you, and set aside time to act on them promptly.
Whether you’re an established business owner or just getting started, running a business alone requires massive effort.
You’re likely already involved in product development, market research, running marketing campaigns, paying employees, and handling customer service. All of this can leave you stressed and overwhelmed on its own.
Adding in another critical responsibility isn’t going to help. In fact, it might just lead to burnout, leaving you less capable of excelling in the areas of your business you need to fuel to grow.
As with all business decisions, the decision to be your own registered agent needs to be thought of in terms of opportunity cost.
Every second you spend worried about your incoming mail and handling government communications is a second you aren’t spending on other important operations that might grow your business.
You’ll also need to learn about how to be a good registered agent. That time might be better spent learning another skill, such as how to pay your business taxes.
With this in mind, it’s often a serious loss to be your own registered agent. You save money directly, but you end up losing more money indirectly.
And that’s if we assume everything goes perfectly.
Unfortunately, things rarely go perfectly. When business owners decide to be their own registered agents, they almost always struggle with it.
You likely launched your business because you have passion and expertise in a specific area. You care about bringing a better solution to the market, and you already know enough to succeed in doing so.
Chances are, you can’t say the same about being a registered agent.
Many business owners don’t know how to be good registered agents, and they lack the passion that drives them to learn.
This is completely understandable, but it’s also a serious problem for their businesses.
When they put off handling or simply forget about their registered agent duties, important documents go unopened.
They end up with missed deadlines. When the business owner finally gets around to paying the fee or updating the information they need to update, they’re faced with hefty fines due to the delay.
This does more than hurt your wallet. It eats into the capital you could have reinvested into your business to fuel growth and beat out your competitors.
As a result, your business grows slower, your competitors gain ground, and you wind up with unnecessary stress.
And that’s the best-case scenario.
In many instances, business owners who miss important documents wind up facing serious legal consequences.
If your business needs to update information or pay a fee to remain legal, you need to do so quickly. If you don’t, you may wind up having your LLC registration revoked, leaving your personal assets vulnerable.
If this happens, any losses your business faces will transfer over to you. If things turn south, you won’t just lose your business, you’ll lose everything.
Regardless of your LLC’s registration status, you could also miss court summons. If a disgruntled employee or an angry consumer decides to sue you, you’re in for a serious battle.
It doesn’t matter how outlandish the prosecutor’s claim may be. You need to prepare to challenge them in court if you want to continue growing your business.
If you miss the subpoena, you’re left with less time to prepare. You may have to scramble to assemble your defense or find a lawyer.
This alone can cost you money simply due to urgency.
In truly terrible scenarios, you may not even realize you’ve been summoned until the court date has passed. In this case, the ruling will almost always immediately be against you. The consequences can be financially crippling for your business.
A professional registered agent is an easy, affordable way to defend against all of this. They diligently monitor any incoming government communications, ensuring you never have to pay a late fee, lose your registration, or face a court case unprepared.
So, Can I Be My Own Registered Agent?
Legally, you can serve as your own registered agent.
As long as you have an address for the mail to be delivered to within the state of your business and are willing to accept liability for government correspondence, you are legally clear to list yourself as your own registered agent.
That said, the risks are exceptionally high.
You’ll have to dedicate a substantial amount of time and energy to your registered agent duties if you want to be successful.
That time and energy could be spent on other aspects of your business, helping you grow your reach and make more money.
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There’s also a strong possibility that things will fall through the cracks. It’s incredibly easy to miss a letter from the government tucked away with all your other mail.
When this happens, you can face hefty late fees and serious legal issues as a result.
Save yourself the stress and hassle by hiring a professional registered agent.
They’ll protect your business while freeing you up to focus on growing.