What Is a Registered Agent?
A registered agent is the person or entity that receives important legal documents for your business, such as service of process documents or reminders of filing deadlines, and forwards them to you.
While this may sound like an unnecessary middleman, the registered agent plays a vital role in your company’s operations. Without a registered agent, the state may not be able to reliably contact your business. This can have some serious consequences, like having a lawsuit against your company proceed without your knowledge.
Who Can Legally Serve as a Registered Agent?
The legal requirements governing who can serve as a registered agent are fairly loose. In general, the registered agent must maintain regular business hours (9am to 5pm, Monday through Friday), and have a physical location within the state of business operations. Anyone who fits these criteria may serve as your registered agent, including your accountant, yourself, or a professional service.
Below are some pros and cons to help you choose the right registered agent for your business.
Designate Your Accountant as Your Registered Agent
- You can work with someone you already know and trust to always pursue your company’s best interests.
- Most accountants keep regular business hours, which enables them to serve as a fully compliant registered agent office.
- Accountants can charge hefty annual fees for providing registered agent services.
- Accountants may not have much experience serving as registered agents since it’s not their primary business activity.
- If you designate your accountant as your registered agent, you will not be able to expand your business into other states unless the accountant has additional offices in those state.
Serve as Your Own Registered Agent
- You will not have to pay anyone a fee to serve as your registered agent if you designate yourself.
- You’ll need to be present and available at your place of business from 9am to 5pm every weekday, in case there is a document delivery attempt.
- If you’re a sole proprietor or general partnership member who works out of your home, you may need to make your personal address a matter of public record.
- There’s a chance you will be served for a lawsuit in front of your employees or customers.
Hire a Registered Agent Service
- The biggest advantage of a professional registered agent service is that they allow you to expand your business into multiple states. Because most of these service providers operate in all 50 states, the sky’s the limit for your business expansion.
- Since providing registered agent service is the main focus of these companies, you can feel confident that they have the most knowledge and expertise to serve you well.
- Professional companies are also set up to properly comply with all legal requirements and maintain regular business hours so no critical documents fall through the cracks.
- While usually not as expensive as hiring an attorney or accountant to serve as your registered agent, there are still fees associated with using professional registered agent services.
Should You Use a Professional Registered Agent Service?
For most businesses, it’s more advantageous to use a professional registered agent service than to designate your accountant or yourself as the agent. The main advantage professional registered agent services have over an accountant is twofold: they’re typically less expensive and they enable your business to easily expand into additional states.
If you would like to pursue this option, these are some registered agent providers that offer great service at a good price:
- Northwest Registered Agent ($125/year): Northwest is the only major registered agent service provider that locally scans every single document they receive for you. Most scan only those documents they are legally required to, such as legal summons. They also have excellent customer support, and will include a free year of registered agent service if you use their LLC formation services.
- IncFile ($119/year): IncFile’s offerings are similar to Northwest, with a slightly lower price. They are a great options for those looking to work with a larger company, as they’ve served over 150,000 customers since they opened for business in 2004.
- Harbor Compliance ($99/year): Harbor offers the lowest rate for quality registered agent services. What’s more, they offer discounts for those doing business in more than one state or businesses willing to pay in advance for future years of service.
While it is certainly allowable to designate your accountant as your registered agent, this option shares many of the same negatives as serving as your own agent. There are some advantages as well, but the limiting factor of only operating in a single state is enough to turn many entrepreneurs off to this idea.
Still, if your business is small with no plans of expansion, it may make sense to designate your accountant as your registered agent. Each business is different, and you should consider all factors before making this important decision.