Running a business is expensive, and entrepreneurs are always exploring ways to cut costs. And while some expenses are unavoidable, there are certain processes that you don\u2019t have to spend money on. <\/p>\n\n\n\n
For example, all LLCs or corporations are legally required to list a registered agent. When evaluating the most efficient and cost-effective way forward, many business owners ask a simple question: Can I be my own registered agent? The straightforward answer is yes, but it\u2019s important to weigh the pros and cons of being your own agent.<\/p>\n\n\n\n
Whether you\u2019re setting up a limited liability company<\/a> or a corporation, you\u2019ll have to designate a registered agent. This is an individual or an entity tasked with handling all of the legal and government correspondence related to your business.<\/p>\n\n\n\n In other words, registered agents act as a channel through which the state can reach the owner(s) of every registered company. That\u2019s the basic purpose of a registered agent. One scenario where this is especially important is when a business finds itself facing a lawsuit and needs to receive service of process documentation. A registered agent can also assist your business with everything, from legal services covering compliance requirements to mail forwarding. <\/p>\n\n\n\n Without a registered agent to act as a bridge between you and the state, you run the risk of missing filing deadlines or inadvertently failing to respond to lawsuits in a timely manner.<\/p>\n\n\n\n We\u2019ve established that it is impossible or rather illegal to run an LLC formation without a registered agent. So, should you become your business\u2019s registered agent, or is it better to go with a professional service?<\/p>\n\n\n\n There are many different types of LLC<\/a>s, but there is nothing in the law that stops you from becoming your own agent. Simply put, the owner of an LLC is legally permitted to act as a registered agent as long as the business is founded in the same state where the owner lives. <\/p>\n\n\n\n So, it all boils down to individual preferences. To help you make the right decision, here are some of the key advantages and disadvantages of serving as your business\u2019s registered agent:<\/p>\n\n\n\n While employing the services of a professional registered agent isn\u2019t the most expensive thing that your business will spend money on, you won\u2019t be able to use those services free of charge. Serving as your own registered agent is the only sure way to avoid paying for the service. If you\u2019re operating on a tight budget, you\u2019ll certainly appreciate having the option to avoid this cost, which can typically go up to $300 per year.<\/p>\n\n\n\n When business owners are trying to figure out whether they should become their own agent, one of the critical factors to consider is how comfortable they are with this arrangement. If your daily routine already involves being at your business\u2019s office during working hours, then being your own agent wouldn\u2019t cause you any particular inconvenience.<\/p>\n\n\n\n A major downside of being your business\u2019s registered agent is that you have to be present at the physical location you list during all business hours, typically between 9 a.m. and 5 p.m. from Monday through Friday. This is the only way to ensure that you don\u2019t miss any important and time-sensitive correspondence. Of course, you wouldn\u2019t have to be there during federal holidays.<\/p>\n\n\n\n Circling back to an earlier point, it\u2019s important to underscore the immense risk of missing deliveries of legal documents<\/a>. Being constantly present at the listed location isn\u2019t really possible from a practical standpoint. As such, stepping out for one moment at the wrong time can result in unnecessary inconveniences for your business. <\/p>\n\n\n\n If your business is facing a lawsuit, then service of process documents will be sent to the listed address. Since you\u2019re the business registered agent, you will be served the lawsuit at the relevant location. This can be embarrassing and undermine the credibility of your business if it happens in front of your employees or customers.<\/p>\n\n\n\n If you are not at the registered office when the process server shows up and you fail to receive the notice of the lawsuit on time, your business may face substantial costs for default judgments and lawyer fees. Ultimately, this defeats the purpose of trying to save money by being your own registered agent. <\/p>\n\n\n\n If you are running a small business from your home, then being your own registered agent means your private home address becomes a public record. This can be a serious issue if you\u2019re concerned about your privacy. And even if privacy isn\u2019t your main concern, having both your business and personal affairs tied to the same address can become problematic after a while.<\/p>\n\n\n\n To become your own registered agent, you\u2019ll need to show proof that you\u2019re a resident in the state where your business operates. This limits your operations to the state that you\u2019re registered in. Unless you\u2019re willing to hire another registered agent, you won\u2019t be able to expand and set up offices in other locations. Every state requires businesses to use a registered agent with a local address.<\/p>\n\n\n\n After weighing the pros and cons, it\u2019s clear that it isn\u2019t advisable for business owners to become their own registered agents. This brings us to registered agent services<\/a>.<\/p>\n\n\n\n First and foremost, hiring a professional service eliminates your exposure to all the aforementioned risks and downsides.<\/p>\n\n\n\n You can focus on running and growing your business, knowing that every legal document is being received and forwarded in a timely manner. When it comes to privacy, registered agents use their official business address, not yours. This means that sensitive information about your physical address is kept private. You also don\u2019t need to make yourself available during working hours and can expand to as many states as you want. <\/p>\n\n\n\n When you’re starting your business, it\u2019s perfectly natural to ask: Can I be my own registered agent? But there are many reasons to consider professional registered agents instead of taking this burden onto yourself.<\/p>\n\n\n\n Keeping up with all the compliance requirements set by the state where you\u2019re forming your business can be tasking. A registered agent service can be a big help with things like filing annual reports. The service keeps tabs on your due dates and informs you about approaching deadlines.<\/p>\n\n\n\n The only real downside to hiring a professional agent is the cost. Prices vary, depending on who\u2019s offering the services, but you typically expect to spend around $100 annually.<\/p>\n\n\n\n Further Reading<\/strong><\/p>\n\n\n\n White Label vs. Private Label: Differences Explained<\/a><\/p>\n\n\n\n Opening a Campground: A Step-by-Step Guide<\/a><\/p>\n\n\n\nShould You Be Your Own Registered Agent?<\/h2>\n\n\n\n
Pros of Being Your Own Registered Agent<\/h3>\n\n\n\n
It Helps Your Business Save Money<\/h4>\n\n\n\n
It Can Be Very Convenient<\/h4>\n\n\n\n
Cons of Being Your Own Registered Agent<\/h3>\n\n\n\n
Always Be Present at the Physical Location<\/h4>\n\n\n\n
You Could Miss Important Deliveries<\/h4>\n\n\n\n
Receiving a Lawsuit at Work<\/h4>\n\n\n\n
The Costs of Fighting Default<\/h4>\n\n\n\n
If You Use a Personal Address, It Becomes Public Record<\/h4>\n\n\n\n
You Will Be Limited to Operating in One State <\/h4>\n\n\n\n
Should I Hire a Registered Agent Service?<\/h2>\n\n\n\n