If you're willing to accept the risks involved, you can be your own Registered Agent for your LLC if you meet the following requirements:
- Are above the age of 18
- Have a physical address in the state (not a P.O. Box)
- Officially reside in the state
- Are available during regular business hours (9 a.m. to 5 p.m.)
Below, we'll break down the responsibilities and risks of being your own Registered Agent, and we'll explain the added benefits of hiring a Registered Agent service.
What Is a Registered Agent?
A Registered Agent, also known as a resident agent or agent for service of process, is a person designated to receive all official and legal correspondence on behalf of your business from various government authorities.
All legal business entities, including Limited Liability Companies (LLC), S Corps, C Corps, and Limited Liability Partnerships, are required to have a Registered Agent. Sole proprietorships or general partnerships do not need to list a Registered Agent.
Learn more about what a Registered Agent does and what happens if you don't have one here.
Why Do You Need a Registered Agent?
A Registered Agent must be listed in a business's Articles of Organization or Articles of Incorporation before you can legally form your business. Essentially, your agent is your business’s point of contact with the state governing bodies.
Registered Agents came into use when courts realized they had to contact and inform businesses about lawsuits before they could properly file them.
A Registered Agent receives communications regarding the following:
- Federal, state, and local taxes like franchise or sales taxes
- Annual report filings and payments
- Legal notices such as subpoenas and lawsuits
- Business licenses and permit renewal forms and deadlines
- Corporate governance documents such as shareholder meeting minutes and resolution statements
A dependable and available agent can prevent you from missing out on important information and being unable to respond in a timely fashion. For instance, if you miss a lawsuit notice, your business could face a judgment without getting a chance to defend itself. Registered Agents are also notified about upcoming annual report deadlines. If you forget to file in time because you overlooked the notification message, you could face a hefty fine. An agent will help your company remain in compliance with all the states it operates in.
Being Your Own Registered Agent Pros and Cons
You can legally register yourself as a Registered Agent for your small business, but we advise you to consider the following pros and cons before doing so:
Pros of Being Your Own Registered Agent
The most obvious advantage of being your own Registered Agent is that it reduces your startup and operating costs. Registered Agent services cost anywhere between $100 to $300 a year.
Being your own Registered Agent also gives you more authority over all elements of your business, particularly the process of obtaining and addressing tax and legal papers. All confidential paperwork and dealings stay with you and no one else is privy to them.
This scenario is ideal if you are a DIY type of owner, have the prerequisite knowledge to be a Registered Agent, and are not intimidated by the thought of handling these sensitive communications. However, this is still not a recommended option for most small businesses due to the cons.
Cons of Being Your Own Registered Agent
Compromised Privacy
Privacy is a rising concern for small business owners — particularly those who run e-commerce stores, work from home, or don’t have a designated office space.
When you appoint yourself as your own Registered Agent, your home address or office address becomes part of official state records, making it easily accessible to anyone who wishes to contact your business. This could bring about endless junk mail and unsolicited visitors and create a higher risk of scams and data breaches.
You might think getting a P.O. Box for your business is an easy solution, but the majority of states don’t accept a P.O. Box as a valid address for a Registered Agent.
Required Location and Business Hours
A Registered Agent has to be available during regular business hours (9 a.m. to 5 p.m.) Monday through Friday. This might not seem demanding, but if you don’t have help or are running a business that requires frequent travel, it could easily become a hassle. When you list yourself as your Registered Agent, you can’t step out of the office for business-related activities — such as meeting a customer or going to the post office to ship a product — for fear of missing a delivery.
Additional Paperwork
The main role of a Registered Agent is to receive, process, and forward all legal paperwork. Important notifications can go unattended if you aren’t equipped to manage this influx.
Hiring someone to help with such tasks might not be an immediate option or priority. But remember that all the time you spend on administrative duties — like waiting for the mail or processing legal notices — takes away from the time needed to properly run your business.
Tarnished Reputation
In the event your company is sued, the service of process papers will be delivered to your registered address. For many owners, getting served in front of family members, customers, or employees could be embarrassing or hurtful to their business's reputation.
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Hiring a Registered Agent vs. Being Your Own
If most states allow you to be your own Registered Agent, you might wonder, “Why should I hire a Registered Agent?” Let's look at the benefits and drawbacks.
Benefits of Hiring a Registered Agent
There are multiple companies, including Incfile, that provide Registered Agent services. First, let's explore the benefits of these services.
Subject Matter Expert and Designated Point of Contact
A Registered Agent service automatically gives you a designated official to receive and manage all documentation, and the Registered Agent's expertise can significantly minimize the chance of error on your behalf.
Compliance requirements can be labor-intensive and confusing, and the majority of Registered Agent service providers are thoroughly familiar with state-specific regulations and filing requirements. The agent will inform you if and when compliance procedures change. They are also equipped to organize paperwork and provide advice on the actions you must take to keep your business compliant.
Easier to Incorporate and Expand Business Across States
A professional Registered Agent service allows you to incorporate your LLC outside your home state. For instance, your business could be physically based in Michigan, but you could be interested in incorporating in Delaware because of the state’s pro-business climate and minimal compliance requirements. In such a scenario, you couldn't be your own Registered Agent because you wouldn't have a Delaware address.
It can be difficult to find a Registered Agent with a physical location in the state you desire. A Registered Agent service such as Incfile's is authorized to operate in multiple states, speeding up the process of doing business out-of-state without having to hire staff or rent an office.
Adds Security
If you have a home or e-commerce business, employing a professional Registered Agent service adds an extra layer of security since the representative's official address is used on public records instead of your own.
However, a Registered Agent address is not the same as a virtual address. Looking for a virtual address for your business? Check out Incfile's Virtual Address offerings.
Centralized Storage of Sensitive Documents
You can manage all of your legal notices and information from one single spot by working with a third-party Registered Agent service. Most service providers, including Incfile, provide you with access to a secure, cloud-based document storage system where all of your confidential documents are kept digitally while hard copies are delivered to your address. Automatic SMS and email alerts ensure you never miss important correspondence.
Plus, you can access all documents, print out any paperwork, and monitor state compliance deadlines via one online dashboard from anywhere in the world.
Prompt Address Notifications
As your business evolves, your physical address may change, and it is mandatory to inform the state of any address updates. Working with an external service will remove the hassle of constantly informing the state. Nearly all states require a fee to be paid for official address change notifications. In the long run, hiring a Registered Agent could be a great money saver.
Flexibility to Run Business From Anywhere
When you work with a Registered Agent service, you don’t need to be available from 9 a.m. to 5 p.m. daily. Instead, you can pursue your aspirations of running a remote business while remaining confident that all important company documents are being received and relayed to you in a timely manner.
Drawbacks of Hiring a Registered Agent
As we mentioned above, the most significant drawback of hiring a Registered Agent is the cost. While some business owners may not have the money, others believe that $50-$300 could be used elsewhere.
Hiring a Registered Agent may cause you to lose control over your business's privacy since a third party will have access to all your company's confidential documents.
Are you currently listed as your own Registered Agent and want to switch to Incfile? You can change your Registered Agent to us — it only takes a few minutes.
How to Find a Registered Agent
While you can perform a quick Google search to find a Registered Agent company within your state, do not assume all third-party agents offer the same quality of service or expertise. You must pay extra attention to the credibility of the Registered Agent.
Here are a few tips for evaluating Registered Agent services:
- Conduct online research and read customer reviews.
- Study a company’s history to ensure they are qualified to provide services to a wide range of businesses.
- Gather details about each service's offerings and the associated price points.
- Check to see if the provider is authorized to operate across multiple states.
- Research the software a Registered Agent uses to process and store documents.
Incfile’s Registered Agent Service
Incfile provides Registered Agent services across all 50 states for $119, and our professionally trained staff will ensure your business never misses an important notice or deadline. If you opt to incorporate your business with Incfile, you'll get free Registered Agent services for the first year.
Our Registered Agent services include the following:
- Swift handling and forwarding of documents and mail correspondence
- Online document storage and access via a user-friendly dashboard
- Automated SMS and email notifications
- Automatic mail forwarding
Even if you have a designated office or don't intend to open up shop in another state, be aware of the risks associated with acting as your own Registered Agent. Incfile is trusted by over 1 million small businesses across the country, so take advantage of Incfile's Registered Agent service to ensure all your bases are covered.
Swara Ahluwalia
Swara Ahluwalia is a freelance content writer with experience in the technical, B2B and SaaS domain. She also has curated content for various lifestyle brands. In her downtime, you will most likely find Swara training for her next marathon or spending time with her two daughters.
