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When you’re forming an LLC, corporation, etc. — appointing a Registered Agent for your business is a key requirement in most states. We realize money’s tight and you’re trying to avoid any unnecessary spending, so you might be thinking about acting as your own Registered Agent.
This is definitely an option, but it might not be in the best interest of your new business.
In this guide we’re going to walk you through the duties of a Registered Agent, the benefits of hiring a professional, what acting as your own agent actually entails, the best Registered Agent services out there and more.
1) What Is A Registered Agent?
A Registered Agent is a third-party professional who serves as your representative to the state while you operate your business. They record all your important information and keep official paperwork up-to-date so that your business stays compliant and in good standing.
They’re also in charge of accepting official mail to alert you of any changes in state requirements.
In most states, a Registered Agent must meet the following conditions:
- (1) a Registered Agent can be an individual or a business entity, either domestic or foreign;
- (2) if an individual, they should be a resident of the state;
- (3) if a business entity, it should be duly-registered to operate in the state;
- (4) a physical street address should be provided;
- (5) the Registered Agent should be present during office hours of all business days on the physical street address provided.
2) Benefits Of Hiring A Registered Agent
There are many reasons why hiring a professional Registered Agent would be in your best interest—here are a few of the major benefits.
1) Free time
As a small business owner, hiring an R.A. is essential to maximizing your time. Whether you want to focus more on managing your business or simply take a break from work, having someone to take care of company mail for you will open up your schedule quite a bit.
You can depend on your R.A. to receive, sort and prioritize your incoming state/federal documents, and notify you if anything pressing comes up. They’ll also spare you from sifting through all that time-consuming bulk mail and separating out solicitations and junk!
2) PRIVACY & BUSINESS REPUTATION
Unfortunately, even if you try your best, you can still be faced with a lawsuit from a disgruntled client. You simply never know when someone will try to take advantage of your business, and you need to be prepared just in case.
When lawsuits are served, they come in the form of “service of process” notices delivered by local law enforcement. If you don’t have a professional Registered Agent on file, the paperwork will be delivered to your home or business address (no P.O. boxes are permitted). Imagine police officers serving you during business hours in front of your customers, or coming to your front door and delivering documents in front of your family, friends or neighbors!
Another major issue with handling this paperwork yourself is the threat of losing the lawsuit on a technicality. If all the documents aren’t handled properly, it’s entirely possible you’ll lose by default. Having a professional Registered Agent is the only way to fully protect your business, maintain your privacy and avoid disruption of daily operations in the case of a lawsuit.
3) their availability
We all know how easy it can be to let that important piece of mail sit for days, even weeks, just waiting until we have time to deal with it. Since your Registered Agent will be available Monday through Friday during normal business hours, you can be sure your documents and mail will be attended to promptly. They’ll also be able to answer any questions or concerns you have during these hours!
4) compliance purposes
Staying compliant is essential to operating your small business. Every year there are new documents to be obtained, reports to be filed, permits and licenses to be renewed, and state taxes to be paid in order to keep your business compliant. Your Registered Agent service can assist you as you complete all these legal procedures, and alert you of any changes in jurisdiction that could affect your business!
3) When A Service Is Required
Now that we’ve talked about why having a professional Registered Agent service agent is a good idea, let’s talk about when it becomes a necessity.
1) irregular business hours
A Registered Agent is required to be available during normal business hours. If your business opens after 9 a.m. or closes before 5 p.m., you won’t be able to act as your own R.A. Unless you want to change your hours to comply with this requirement, you’re going to need to hire a professional.
2) not a resident of the state
Your Registered Agent is required to be a resident of the state where your business operates. If you’re not a resident of the state, you’ll need to hire a local professional who’s qualified to represent your business.
This also applies to businesses that are incorporated in different states than they’re located—for instance, many business owners choose to incorporate in business-friendly states like Delaware. In this case you’ll need to hire an Registered Agent in the state where your business is actually registered!
3) Locations in more than one state
If your business is going to operate in multiple states, you’ll be legally obligated to receive and file necessary documents for each state. This means you’ll need a point of contact in every state where you do business—and since it’s physically impossible for you to be in more than one place at a time, you’ll need to utilize professional R.A. services.
4) no physical business address
If you run a digital company, delivery service, or any other type of business that isn’t fixed in one place, you probably won’t be able to provide a viable address for receiving legal documents. Or perhaps you run your business from home, but you really aren’t keen on making your name and home address public information, or you can’t commit to a 9 to 5 workday. In any of these cases, you’ll need to hire a Registered Agent.
4) Acting As Your Own
It’s clear by now that we If you choose to act as your own Registered Agent, you need to know exactly what’s required of you:
- You must make your name and physical address available on public records.
- You must be a resident of the state your business is operating in.
- You must be present and available at the listed address from 9 a.m. to 5 p.m. Monday through Friday to receive official documents.
- You must sort your mail carefully and respond to any important documents promptly to avoid missing any deadlines.
Most importantly, you must realize the weight of this responsibility. If you lose an important document or miss a deadline, you could put your business’ compliance status at risk. You could even have your LLC or Corporation status revoked by the state!
If you’re like most small business owners, you’ve already got too much on your plate to concern yourself with your high-risk legal paperwork. We highly recommend delegating this work to a professional to save yourself the time, energy and stress.
That said, it is possible to act as your own R.A.—just make sure to weigh all the pros and cons and check with your state to see if you’re allowed. Don’t just make this decision to save yourself a hundred bucks. Think about it: how much is your time worth?
5) Best Registered Agent Service
Whether you’re looking for your first Registered Agent or switching over to a new one, there are tons of options out there. We realize the process of choosing the best Registered Agent service can be overwhelming, and that it can be difficult to discern the real differences among various providers.
After reviewing and ranking the top services, we highly recommend looking into Northwest Registered Agent, which we chose as #1.
- Their base rate for services is $125/year, but they also offer discounts if you use their services for multiple years.
- Northwest Registered Agent has tons of positive customer feedback. Many of their clients specifically thank their super friendly, knowledgeable staff.
- Their highly-personalized services put them above the industry standard.
Special Offer: Get their registered agent service free when you form an LLC through Northwest. Right now it’s just $39 + state fee. (See Details)
Wrapping Up
As a business owner, there are bigger and better things for you to focus your attention on than filling out legal documents and doing other tedious tasks.
That said, the success of your business depends on these tasks being done, and done well. We highly recommend hiring a professional Registered Agent service to take care of them for you so you can continue doing what you do best.
Get Northwest’s Registered Agent Service ($125)
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References
Please note that this guide isn’t legal advice and is for informational purposes only. If you have any specific questions about your business, speak with a legal professional. References include TRUiC and LLC University.