Why You Should Not Be Your Own Registered Agent

One of the prerequisites when forming your own LLC is to designate a registered agent. While you can choose to appoint yourself as your own registered agent to cut down on startup costs, it’s often not the best decision. There are many reasons why you’d not want to cut corners when it comes to designating a registered agent for your business.

In this article, we’re going to look at some of the main reasons why being your own registered agent is not a great idea and why you should consider hiring a professional registered agent service.

What is a Registered Agent?

A registered agent is an organization or individual tasked with receiving important legal documents from your federal or state government on your behalf. After they’ve received your documents, your registered agent then informs you about the delivery, scans and creates digital copies of the documents for secure storage, and finally sends them to your business address.

Some of the official documents your registered agent receives on your behalf include;

• Service of process or Notice of Litigation for lawsuits
• Important compliance mails from your state, for instance, annual reports
• Tax forms from your state’s department of taxation

Your registered agent helps keep track of important deadlines and due dates, so you don’t incur costly penalties or lawsuits for missed filings and other crucial state requirements.

Depending on the state you reside, there are several people you can designate to be your registered agent. Some of the common options include

• Designating yourself
• A friend or family member
• One of your employees, for instance, your accountant or business attorney
• Assigning the role to a professional registered agent service provider

Why You Should Use The Services Of A Registered Agent In LLC Formation

While it might be tempting to assign yourself the role of a registered agent for your company, here are some of the reasons why you may want to consider hiring the services of a registered agent in LLC formation;

· You Must Have A Physical Address

To serve as a registered agent, you’re required to have a physical address in the state you’re looking to form your new LLC. It’s important to note that your post office box cannot serve as your physical address. This rather means an address of a physical office or place, where someone can go to deliver mail or service of process in person.

This can be a major challenge if you don’t have a physical address in your business’ state or want to expand your business to other states. As such, you may want to hire the services of a professional registered agent as most of them have physical offices in multiple states.

· Need To Be Available During Normal Business Hours

As a registered agent, you need to be always available at your place of work during normal business hours. This can be a huge problem especially if you’re always on the road or work odd hours. This also means that you cannot take a day off or head out for errands.

This is important as the registered agent should be available to receive important documents from the state. Being unavailable during business hours is likely to make you miss important deliveries from your state, which could result in a lawsuit against your business. With a third-party registered agent service, however, you can have the peace of mind, knowing you cannot miss out on any important delivery from your state.

· Your Address Is Likely To Change

Appointing yourself as your own registered agent means that your address must always stay current and updated in the state records. Changing your address requires you to update your registered agent info by filing your new address with your state and paying a fee to successfully make the changes, which can be time-consuming and costly.

However, using a registered agent service, you won’t be tied to a single location plus you won’t have to worry about updating your record with the state whenever you decide to relocate.

· To Prevent The Risk of Non-Compliance

The process of forming an LLC is usually long and arduous as it involves dealing with lengthy and confusing forms to meet your state’s compliance requirements. This can be overwhelming for you and you might end up increasing your chances of non-compliance. But using a registered agent service, you can always stay compliant and in good standing with your state authorities and without the unnecessary state penalties.

· Prompt Response To Time-Sensitive Documents

Some of the documents delivered to your physical address such as the Service of Process require immediate response to avoid missed deadlines. If you’re not available to receive these documents or you’re busy running your business and fail to respond in a timely manner, you might end up paying costly penalties or with a default judgement against your business.

However, a registered agent service can receive such documents quickly and discreetly and notify you of upcoming deadlines in real-time, so you can always be in a position to respond soonest possible.

· You Don’t Want Your Address Public

If you’re your own registered agent and decide to use your home address as your physical address, your personal information is made public. This means everyone can easily access it including marketers, which can not only increase the amount of junk mails you receive but can also drastically lower your privacy.

This is one of the main reasons why you might want to hire a registered agent service as you can use their address to be listed on public records, helping you retain your privacy. On top of that, you get an extra layer of privacy in case your business is sued since the service of process will be delivered to your registered agent.

Conclusion

While choosing to be your own registered agent can be a simple solution, a registered agent service can help keep your business from costly penalties and legal issues while ensuring added privacy.

Without a registered agent service, you’re likely to miss out on important compliance deadlines or making mistakes when filing the various legal documents. This can result in serious consequences for your business including not being in good standing with your state or even being suspended from business.

With a professional registered agent service, you don’t have to worry about missing crucial deadlines and you can always stay compliant without any costly penalties incurred.