The owner of a Limited Liability Company (LLC) or Corporation might consider being their own registered agent since it eliminates the cost of contracting another party to accept service of process and other official notifications on the business’s behalf. However, while legally you may be allowed to be your own registered agent, it’s likely not the best option. Why? Let’s talk about a registered agent’s responsibilities and the valid reasons for entrusting those duties to a commercial registered agent rather than taking them on yourself.
What Does a Registered Agent Do?
A registered agent (sometimes called a resident agent or statutory agent) is a person or company responsible for accepting service of process and other important correspondence on behalf of an LLC or Corporation.
Service of process examples:
- Summonses – A summons notifies a business of a lawsuit against it.
- Complaints – A complaint explains the plaintiff’s reason for a lawsuit.
- Answers – An answer is the defendant’s formal written response to a complaint.
- Subpoenas – A subpoena requests parties in a lawsuit to produce certain documents, records, files, and testimony for examination.
- Motions – A motion is presented to the court by either the prosecuting or defense attorney, requesting it to decide on some aspect of the case before it goes to trial, during a trial, or even after a trial.
Other official documentation a registered agent receives:
- Business compliance-related filing notifications from the federal, state, and local
- Tax notices from the IRS, state, and local tax authorities
- Wage garnishment notices mandating that the business withhold a portion of an employee’s wages and send it directly to an individual or organization to which the worker owes money (e.g., for child support, alimony, loans, etc.)
Can You Be Your Own Registered Agent?
States’ qualifications for registered agents vary, but generally, the following rules apply.
- An LLC member or Corporation shareholder who resides in the state, has a physical address in the state (not a P.O. box), is at least 18 years old, and meets the state’s availability requirements.
- An employee, friend, family member, or another individual age 18 or older who lives in the state, has a physical address in the state (not a P.O. box), and meets the state’s availability requirements.
- An attorney (or law firm), an accountant or CPA (or accounting firm), or a tax preparer (or tax preparation firm) that provides registered agent services and has a physical address in the state
- A commercial registered agent, such as CorpNet.com, with a physical address in the state where the LLC or Corporation is located or certified to conduct business.
So, you likely can appoint yourself, someone who works for you, or someone else who you know as your registered agent. However, the considerations below might make you decide otherwise.
Why Should You Choose a Commercial Agent?
1. Availability Requirements
Most states require that a registered agent is available from 9 a.m. to 5 p.m. Monday through Friday, except for state-recognized holidays.
This may not sound unreasonable, but keep in mind that you probably might take a sick day here and there, go out for lunch occasionally, or leave for vacation. If you serve as your own registered agent, you must be at your designated registered agent address per the state’s rules. The same problem exists for designating any individual as a registered agent.
If a registered agent fails to perform their duties and important notices slip through the cracks, it could mean that a lawsuit against an LLC or a Corporation proceeds without the business owner being aware of it. That could lead to a default judgment unfavorable to the company. Also, a business owner may overlook critical compliance tasks, like filing an annual report or renewing business licenses, which could result in fines and other penalties.
A commercial registered agent ensures someone will be available to receive critical notices and documents on your behalf. You get peace of mind in knowing that you have a registered agent services provider who will keep you informed and up to date on your obligations.
2. Privacy Protection
Having a commercial registered agent provides some privacy for you as a business owner. Instead of your personal or work address, your registered agent’s name and address are listed publicly for process servers to use when delivering notices.
This can spare you from potentially embarrassing situations — imagine if you’re notified of a lawsuit against your business in front of your neighbors or clients! With a commercial registered agent, process servers must deliver legal notices to that party, not your home or business.
3. Multi-State Needs
If your LLC or Corporation conducts business — and must foreign qualify — in multiple states, it will need a registered agent in each of those states. Even if you take on registered agent duties for your business in your home state, you will need someone else to handle those responsibilities in the other states. Again, appointing an individual as a registered agent has downsides, so I encourage you to consider designating a nationwide, commercial registered agent authorized to provide services in all 50 states. Doing so simplifies matters immensely when ordering and renewing registered agent services.
4. Other Formation and Compliance Needs
What if your business needs help and expertise that expands beyond the role of a registered agent? For example, registering for payroll taxes, obtaining an EIN, applying for business licenses, filing an annual report, etc.
You — nor another individual — will likely have the time or knowledge about all of the formation and compliance tasks and requirements an LLC or Corporation must address.
Conversely, some commercial registered agents also provide a full suite of formation and compliance filing services to streamline every aspect of starting and running a business. Look for one that offers free notifications of upcoming deadlines and a robust portal for placing orders, renewing services, and tracking compliance tasks.
Think Twice Before Doing It Yourself
While DIY has its merits, it’s rarely the best path when it comes to keeping your business legally compliant. I encourage business owners to talk with their attorney and accountant about their company’s specific legal and tax responsibilities. And I caution anyone thinking about appointing themselves as their business’s registered agent. While it may save you a little bit of money upfront, it could potentially cost you a lot more in the long run if you’re unable to perform the duties and important notices slip through the cracks.
Appoint CorpNet as Your Registered Agent
CorpNet can act as your registered agent in any state ensuring your business stays compliant with any service of process, legal notices, or official mailings.