5 Risks to Being Your Own Registered Agent

What is a registered agent?

A registered agent (also known as a statutory agent, resident agent, or agent for service of process) is an individual or a business entity that receives important legal notices as well as official document deliveries from your state government. This role is crucial for various types of business entities, such as corporations and limited liability companies (LLCs). The agent informs the business owners of the delivery and forwards it to them.

Registered agent duties include handling legal documents, and failing to manage these documents properly can lead to significant legal and compliance risks for a business. The specific documents that your registered agent handles include service of process for lawsuits and important notices from your Secretary of State’s office.

You have several options for who can serve as your registered agent. As far as the do-it-yourself options go, you can designate yourself as your company’s registered agent, you can recruit a friend or family member to handle it for you, or you can assign the role to one of your employees.

If you’re more interested in having a professional take the reins of this position, you could designate your lawyer or accountant, or you can hire a registered agent service.

Risks to Being Your Own Registered Agent

While you are legally allowed to be your own registered agent, there are several significant risks to doing so. Many business owners face challenges when considering being their own registered agent. In our opinion, these factors make it so that serving as your own registered agent isn’t a good idea in most cases.

Let’s walk through these risks one by one to see if you agree!

1. You have to be available during all business hours

The most obvious drawback to serving as your own registered agent is the fact that you’ll need to be present at your place of business during all regular business hours every Monday through Friday, with no exceptions.

That makes vacations, sick days, off-site meetings, and even lunch breaks a risk, because a delivery could be attempted while you’re away.

This is because the registered agent needs to be available to receive service of process during standard business hours, and in many cases, the delivery will simply not be made if you aren’t there. That means you’re running the risk of missing a service of process delivery anytime you leave your business location during these hours, and a lawsuit could proceed against your company without your knowledge.

2. You could miss an important delivery

Even if you’re at your place of business every weekday, you could still miss something: a state notice gets lost in the mail pile, or a process server arrives while you’re busy with a customer.

Missing legal documents can lead to severe legal and compliance risks. If you miss service of process, a lawsuit can move forward without you, and the court may issue a default judgment against your business. If you miss state notices, like annual report reminders, your LLC could fall out of good standing or even be administratively dissolved.

3. Expanding to other states gets more complicated

Your LLC needs a registered agent in every state where it’s registered to do business. If you serve as your own agent, you can only cover the state where you’re physically located, so expanding means finding a separate agent in each new state. A professional registered agent service with coverage in all 50 states can handle every state under one account.

4. A registered agent’s address is a matter of public record

This one is more of a big deal if you’re operating a home-based business. In this situation, you would be required to enter your personal address into the public record, which obviously has some significant privacy issues involved with it.

If you run a business out of your own home and don’t want to make your address widely available, you shouldn’t be your own registered agent. Please note, however, that most states require the business owners’ addresses to be listed in their formation paperwork, which is public record. Having a registered agent service won’t keep the owners’ addresses private in those states.

5. Your customers or employees could see you get served

Having a lawsuit filed against your business is stressful enough to begin with. However, that level of stress could increase significantly if you serve as your own registered agent and have to receive service of process in front of your customers or employees.

If you would rather avoid this scenario, it’s in your best interests to outsource your registered agent service.

Pros and Cons of Being Your Own Registered Agent

Who should be your registered agent?

If you would like to avoid all of the risks described in this article, the best way to do that is to hire a professional registered agent service.

These companies are focused on being the best registered agents available, and they usually provide some sort of additional features as well ― sometimes in the form of a compliance calendar or digitally scanning, organizing, and storing your documents. You also receive access to their helpful customer support departments.

The best part of hiring a professional registered agent service is that they typically have offices in all 50 states, which means you can easily expand your company into an additional state without having to get a new registered agent for that state. Instead, you can simply add a state to your account with your registered agent service.

We think it’s a no-brainer to hire a professional registered agent service, but the trickier question is which one you should use. We have a guide to the best registered agent services available on this site. Overall, ZenBusiness’s registered agent services, LegalZoom’s registered agent services, Northwest’s registered agent services, and Bizee’s registered agent services all come to mind for most entrepreneurs looking for a good provider. Check out ZenBusiness customer reviews.

Conclusion

There’s nothing legally stopping you from serving as your own registered agent, but common sense might hold you back.

The main benefit of being your own agent is saving the cost of a professional service, which typically runs a few hundred dollars a year or less. For most business owners, the risks outweigh those savings. If you do designate yourself as your company’s registered agent, you’ll likely be subject to the hassles and privacy issues discussed in this guide.

For the vast majority of our readers, we would recommend hiring a reputable professional registered agent service to handle this important aspect of business compliance.

It’s also worth noting that many LLC services can form your LLC and act as the registered agent for a small fee.