With a registered agent service, you can pay a reasonable annual fee in exchange for peace of mind, convenience, and privacy protections. In our opinion, that’s well worth it! Let’s tackle this topic in a comprehensive manner, discussing all the important angles and nuances of registered agent services.
Starting off with the basics, it’s important to understand what exactly the registered agent’s role is, and what is expected of the person or business entity in this position. For starters, you need to have a registered agent lined up before you form a business, because you’ll need to identify your agent in your formation paperwork.
The registered agent needs to have a physical address (not a P.O. Box) in the same state where you form your company, and you’ll also need to designate an agent in every additional state you do business in.
The role of the registered agent includes using their mailing address as an official point of contact for your business, where the state can send important document deliveries, including service of process, official notices from the Secretary of State, etc.
Whenever the registered agent receives one of those documents on your behalf, they inform you of the delivery in a timely fashion, then forward the document to you.
Some entrepreneurs choose to serve as their own registered agents, but we rarely advise that our readers use this option. While there’s nothing legally preventing you from being your own agent, it can inconvenience you in a variety of ways.
If you do serve as your company’s registered agent, you’ll need to be available at your business address between the hours of 9am and 5pm on all weekdays, which means no vacations, sick days, doctor’s appointments, or lunches out.
Additionally, if you’re served for a lawsuit, there’s a good chance your customers or employees will witness the service of process delivery, which is far from an ideal situation.
If your business is based out of your home, you can avoid those issues to an extent, but the problem in this situation is that registered agent addresses are in the public record, meaning a substantial loss of privacy regarding your personal address.
Finally, because a company needs a registered agent in each state it does business in, you won’t be able to expand your business into additional states if you’re serving as your own agent.
Another option is to have someone you already know be your registered agent.
Some entrepreneurs will designate their spouse for this role, or perhaps a trusted friend ― unfortunately, these options run into many of the same issues as you would by serving as your own agent. Likewise, having one of your own employees handle this role doesn’t solve the issue of being served for a lawsuit in front of your customers and/or employees.
You could also have your lawyer or accountant handle this role, which gives you the advantage of having a trusted business associate as your registered agent. On the negative side, attorneys and CPAs often charge unreasonably high rates to serve as registered agents, and they may not have much experience in this position either.
Our recommendation is to hire a registered agent service to fill this important position. A registered agent service is a company that specializes in being a registered agent for a wide variety of businesses across the country, bringing tons of expertise and a healthy dose of reliability to the role.
Most professional registered agent services operate on a national basis, meaning there’s no restrictions on which states you can operate your business in.
They also tend to charge affordable rates, as you can find several registered agent services that charge around $10/month or even less for this service. In addition, the personal address of home-based entrepreneurs will remain private when you hire a professional registered agent service.
There are quite a few of these companies out there, and most of them make it quite easy to enlist their services. On the other hand, it can be a bit tricky to figure out what exactly sets these companies apart from each other, because they provide very similar services. If you want some help narrowing down your options in this regard, we suggest that you read through our complete guide to the top registered agent services.
Registered agent services usually include some additional features, which vary depending on which company you choose. In general though, you’ll often see these services offer a compliance calendar to help you track your important filing deadlines, and you’ll always receive access to their helpful customer support teams.
Fun Fact: What’s also neat is that if you don’t have your company created, many of those same services can incorporate online for you.
For the vast majority of businesses, we think that hiring a professional registered agent is easily the best option available.
They’re not too expensive, and the amount of peace of mind they provide is quite valuable. We also enjoy the reliability of a professional registered agent service, and it’s always nice to be able to contact a knowledgeable customer support representative if you have any questions or concerns.
While there are some situations where serving as your own registered agent could be justifiable, and we understand the appeal of designating your lawyer or accountant as well, professional registered agent services offer expertise that these options don’t have, and the ability to easily expand your business to other states is a great attribute as well.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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