Why You Should Not Be Your Registered Agent

You may be thinking about acting as your registered agent for LLC or corporation, but it is not wise to do so. The answer to “Could you be your registered agent?” Is yes, but you probably should not.

You might be thinking, “What is a registered agent?” A registered agent is a person or service your company appoints to receive official notices on your LLC’s or corporation’s behalf. Including service of process, correspondence with the country, and notifications about federal and state taxation.

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The agent for service of process could be anybody–the company owner, an employee, or an external individual or service hired to fulfill the function.

Registered agents are especially crucial for businesses that aren’t established in a state in which they’re doing business (as an instance, you’re situated in New York, but also sell items or provide services in New Jersey). There must a way to get the company for legal purposes, and a designated registered agent is the means to do so.

Most small businesses hire a registered agent service, such as my recommendation Legalzoom, a business that’s set up to accept notices and service of process for many different businesses. These companies have comprehensive procedures in place so that they can monitor anything they receive for your benefit and make sure it comes to your attention immediately.

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It may seem as though it would be less expensive and easier to only be your registered agent, but there are numerous reasons why this isn’t good business practice.

1. The agent should must a physical street address.
Corporations, whether c-corp or s-corps and LLC registered agents must have a physical address within the country where the business is doing business, and a post office box doesn’t suffice. A private email service or mailbox also doesn’t fulfill the requirement.
There needs to be a physical place where somebody can go to provide service of process or send mail. If you are conducting business transactions out of your headquarter state, you may not have a physical location in that state.

2. You may not wish to use your house address.
If you plan on being your registered agent, you might wind up needing to use your house address (particularly in the event you’ve got a home-based or web-based business), which will make the speech public. This raises privacy issues, and also means the speech will be available to entrepreneurs and could increase the amount of junk mail you get at your dwelling.
It also might indicate a process server or angry litigant could come to your house to serve you with lawsuits notices and summons, something that you might not need to deal with at home.

3. Address change notices must be made promptly.
One thing to think about as you wonder “Can I be my registered agent?” Is that if you are thinking about moving or relocating your business location, you would have to inform the state of every address change, which is time-consuming. You will probably also have to pay a commission for every notification of a change in speech.

When you add those up fees and think about the time involved in managing changes of address with the state, it’s simpler and possibly less expensive to employ a registered agent service.

4. Agents are expected to maintain regular business hours.
Registered agents will need to have regular business hours to be able to accept service of process. This can be problematic for small business owners who frequently aren’t able to keep in an office all day, and that can’t afford to employ full-time employees to work from a particular location.

5. You should have an agent in each state.
You want to designate a registered agent in each state that the company does business in. It would be quite expensive to maintain a physical location for your organization in each state.

If you seek the services of a registered agent service, you can easily keep an agent in each state without needing to hire workers or maintain a physical location in each state where you’re conducting business.

6. You never need to miss an important note.
Paying a small fee annually for registered agent services so that you have an agent for service of process and other notices may be well worth the time you’ll save in attempting to keep organize and track all of the government officials notices by yourself and making sure you’re reading and sorting your email.

This sort of service ensures that you won’t miss or forget about an important note, which may be hugely costly for your organization if you don’t respond to pending litigation or if you don’t pay taxes by their obligations.

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