If your small business is ready for the next step, you might find yourself browsing through articles and blogs on how to form an LLC or corporation. Out of all the other prerequisites to form an LLC or to incorporate, one of the most important ones is having a registered agent.
A registered agent can be an individual or an entity who works as the point of contact between your business and the state or general public. It is the registered agent who receives SOPs and other important legal documents on behalf of your business.
If you have been trying to know more about registered agents, you might have undoubtedly come across the fact that you too can be your businesses’ registered agent.
While there are professional registered agent service providers that you can designate as your registered agent, a lot of corporations and multi-members LLCs prefer making one of their members the registered agent of their business. The same is true for single-member LLCs as well where the single member of the LLC can serve as the registered agent.
So, in simple words, “Yes,” you can be your own registered agent. And this is valid for all the states in America. So whether you are forming your business in Florida or California, it does not matter. You can act as your own Registered Agent.
But are you sure you’d be able to handle the responsibilities of being a registered agent along with all the other business responsibilities? Let us check the basic duties and requirements of a registered agent to help you make the right decision.
Responsibilities/Requirements of a Registered Agent
As mentioned above, the registered agent is responsible for receiving all the legal documents on behalf of your business. This includes SOPs (Service of Process), state correspondence, and notices about federal and state taxes.
Apart from this, a registered agent generally also provides business filing assistance and business knowledge as and when needed by the LLC or corporation. This means that a registered agent should have a fair knowledge and experience of how a business runs.
And not just this, there are also a few eligibility criteria to be met to be a registered agent. Most importantly, the registered agent needs to have a physical address in the state in which the business is qualified or incorporated.
The address of the registered agent is a public record which can be accessed by anyone by visiting the state’s filing website. This means that even marketers and spammers could be able to access your address. Apart from this, the registered agent is also required to always remain available at the registered address throughout the regular business working hours.
Moreover, some of the states also have additional requirements for being a registered agent. For instance, in Virginia, you need to be part of the corporation’s management or be an attorney to be a registered agent. You can check with your state to know more about such additional requirements.
Be Your Own Registered Agent or Using a Registered Agent Service?
As you can see, being a registered agent is not only a serious job but also has a few requirements. While being your own registered agent can help you save money as you will not be required to pay for professional services, there are a few disadvantages too.
For instance, there is no option for you but to stay available during the general business hours. So, no offsite business meeting or business trips throughout the working hours 5 days a week. On top of it, you will also be receiving a lot of legal documents, and this would require you to be highly organized and have a decent knowledge of the legalities of running a business.
Not to forget the fact that if you are your own registered agent, you will be receiving legal notices like lawsuit paperwork and court summons in public. So, your visitors and employees would know when you receive them. A lot of entrepreneurs are not very comfortable with this and thus prefer hiring professional services.
In the end, the decision depends on you. If you are just starting an LLC or corporation and having a tight budget, being your own registered agent can be an option. The same is true for a lot of small businesses which only operate in their own state, have regular working hours and are not entirely concerned about privacy.
But when both the choices are compared, hiring professional services proves to be more advantageous in most cases. Understand the fact that registered agents have some serious responsibilities and if at all they are not able to handle them, it could result in severe consequences for your business.
So, try to understand the pros and cons of being your own registered agent to make the decision or look for legal help for the same.