A registered agent is the responsible party and point of contact for your company in the state where your business is located. This party can be an individual or company that agrees to accept legal process and other official documentation on behalf of your LLC or corporation. This party is usually required to be named on your articles of organization filed with the state along with any other relevant official government entities. Almost anyone can act as a registered agent, including you or a third party, as long as certain minimum requirements are met.
Why is a Registered Agent Needed?
States require a business to have a designated registered agent for several reasons. The primary purpose is to protect the rights of the state’s citizens to bring action against any party conducting business within the state. This protection arises out of a state’s concern that its citizens may not be able to take legal action against a large company hiding behind several employees. Having a registered agent allows for courts and residents to easily identify the responsible party within your company.
Who can be a Registered Agent?
Most states only have very basic requirements regarding who may act as a registered agent. A registered agent must have a physical address in the state of formation and be available during normal business hours. For many solo and small business owners, it may be difficult to maintain regular hours, even in a home-based business.
In addition, the registered agent’s address must be in the state where the company is formed.
Can I Be My Own Registered Agent?
You are technically qualified to act as the registered agent for your LLC. It is tempting to go this route primarily because you will save money by not hiring a professional registered agent.
However, if you are forming a foreign entity (meaning an LLC or corporation formed in a state other than your home state), you will be required to use an in-state party as the registered agent.
Should I Be My Own Registered Agent?
There are many variables to consider before deciding whether you should act as the registered agent for your LLC.
The key concern of many entrepreneurs may be privacy. The record of your registered agent’s name and address will be available through your state’s public records. When you are just starting out, you may not have a physical business presence other than your home office address.
However, if you are a small business owner with a storefront, regular business hours, and you only conduct business in your home state, acting as your company’s registered agent may make the most sense in your circumstances.
The decision whether to act as the registered agent for your company primarily depends on your individual concerns as a business owner. Some owners may not mind that their personal information is accessible in public records, while to others this must be avoided at all costs.
Reasons to Hire a Registered Agent Service
States typically require that an LLC have a physical address in the state of filing. The address may be either a home or business address, but cannot be a P.O. Box. As mentioned before, if a business does not have its own street address, the owner’s only option would be to use their own residential address or the address of a professional registered agent. You may prefer not to disclose their residential address to the public because this opens to door to business “junk mail” as well as process servers and disgruntled litigants trying to serve you on your doorstep.
Another reason to consider hiring a service is to avoid the burden of additional paperwork. If you change your business address or move out of the state, you will be required to file documentation with your state to update the registered agent address. If you hire a service, you can move anywhere without worrying about updating the official records.
If your business is large and conducting business in several states, you will need to hire a registered agent based in each state. You can still designate yourself or another member as the agent for your company, but only in the states where you or the other member have a physical address and presence.
Every state has different requirements for LLCs. Click on your state below for detailed information.
Do I have to be the Registered Agent?
If you don’t have a physical location in the state where you have formed your LLC or don’t want your name publicially associated with the LLC, you can hire a Registered Agent service. An owner can register as the Registered Agent, however their name is listed on the state’s database for anyone to look up. Another option is to appoint a registered/resident agent within that state to receive your official documents. Many companies will, for a fee, provide these duties for you.
If you would like to hire a company to provide registered agent services, it is important that you choose a reputable company. You do not want to run the risk of choosing a company that will accept your money, but then not deliver, for example, the notice of a lawsuit against your business in a timely manner.
YOU are responsible for choosing your registered agent company wisely. The last thing your business needs is to have a default judgment issued against you in court because your registered agent failed to notify you of a lawsuit. Choose an agent that operates responsibly and does not run the risk of closing down without you being aware.
Enhance Your Privacy With A Third Party Service
One good use of a third party service to act as your registered agent, even if you incorporate in your home state, is to protect your privacy. In some states, the ownership information of all LLCs are public (e.g. the identity of the LLC’s members). However, in nearly every state, the name and address of the company’s registered agent is public.
Most state’s Secretary of State (or equivalent) website’s allow anyone to search a company or LLC name and find out the address of the registered agent. Also, there are several companies compile the information from Secretary of State’s records and resell this information as a mailing list to direct marketers.
Once you incorporate or form an LLC, you will find yourself receiving everything from credit card offers to promotional gift catalogs and packaging supply catalogs.
Many home business owners, even though they “work” out of their home, they get their mail at a post office box. This gives a measure of privacy.
The problem with a PO box? Most states do NOT allow PO boxes to be used as a registered agent location.
Questions About Registered Agents
Q. If I choose to be my own registered agent, are there particular forms I must fill out, is there a fee, and can you provide a link to the form?
A. When you form your LLC by filing Articles of Organization, one of the items on the Articles of Organization is listing your registered agent.
To be your own registered agent, you will enter your own name and a physical address within the state in which your LLC is formed. A street address is required, and P.O. boxes are not acceptable.
Q. If I choose someone else to be my registered agent, what is a fair price for these services?
A. Pricing for registered agent services is typically around $100/yr. Many LLC formation providers will bundle the cost of their registered agent services with the cost of having them form your business LLC.
Q. How often should I expect a good registered agent or agent company to communicate with me?
A. A good registered agent will immediately forward any document it is served with relating to your business. One of the main functions of a registered agent is to receive what is called “service of process”. Essentially, this refers to court documents. For example, if your LLC is sued, the plaintiff will have your registered agent served with the summons. Because court documents are time sensitive and require responses within set time limits, a good registered agent will immediately forward such documents to you.
Q. What is a fair price for agent services, and are there a range of services that might be offered? Would hiring them for these extended services be beneficial to me as a business owner as far a saving me time, money, etc.?
A. This depends on the type of additional services. Some registered agents will add services such as receiving all your business mail, opening, scanning and emailing it to you.
Q. Legally, are there ways in which I might be better protected hiring a company to be my registered agent rather than performing this duty myself?
A. There are several advantages to hiring a company to be your registered agent instead of doing it yourself:
- If you are your own registered agent and are listed under your home address, a process server or sheriff will serve court papers to you at your home if your LLC is ever sued.
- The names and addresses of all registered agents is public knowledge (see below). This may cause problems for you in the event of a disgruntled client or customer. Furthermore, there are companies that purchase the names of all new registered agents, compile them into mailing lists, and sell them to “junk mailers”. Therefore, if you use your home address when you file as a registered agent, you will receive a flood of junk mail at your home.
- While I have not seen a court opinion on this issue, it’s arguable that having a separate registered agent address for your LLC could help establish that your LLC is truly separate from you personally and would reduce the possibility of the corporate veil being “pierced.” This is particularly important for home based businesses, and single member LLC’s. The more you can show a separation of your personal life from your business, the less likely a creditor can pierce your corporate veil.
- The identities of members and often officers of LLC’s are not generally public information (this varies by state). If you become your LLC’s registered agent, you will be giving up this level of privacy, and your association with the company will be exposed. Some people do not consider this an important factor, but others may highly value their privacy. You don’t have to be doing anything illegal or unethical to want privacy. For example, suppose you are a well-known commercial real estate investor. You form an LLC under a new name to quietly acquire land for a new development. If you act as your own registered agent, anyone searching for your name, or the name of your LLC, could discover your involvement. This, in turn, may cause a seller (knowing that you have big plans for his property) to raise his price.