A registered agent is a person or entity authorized to accept service of process, official mail, and documents on your business’s behalf at your business address during standard business hours.
In most states, all registered business entities must maintain a registered agent. They’re such an important element of business operations that it’s almost impossible to complete the LLC formation process without one. So, you probably need a registered agent, but a professional registered agent service isn’t necessary and hiring a registered agent isn’t your only option.
No state specifically prohibits you from being your own registered agent, so, technically, yes, you can be your own registered agent. But due to the risks and liabilities of being your own agent, you should learn more about the job and how it compares with hiring a registered agent service.
Keep reading to learn what your options are and which is the best choice for your business.
Registered Agent Requirements
Most registered agent requirements are the same in every state due to efforts to standardize them. Here are some of the qualifications you must meet to be the registered agent for your business:
- State laws. Many states have their own laws regarding registered agent requirements, so you’ll need to brush up on state code.
- 18+. All registered agents must be at least 18 years old.
- Physical address. A registered agent must have a physical street address, or local address in the state. This excludes PO boxes and virtual addresses.
- Who you can designate. As long as they meet the state and federal requirements, you’re allowed to designate anyone you wish. This includes a family member, employee, friend, lawyer, or yourself.
What Are Your Duties as Your Own Registered Agent?
While you can act as your own agent if you prefer, you can’t just set up a PO box and check it periodically. A registered agent is required to be physically present at your company’s listed business address during regular business hours, which means you can’t just pop in to check your PO box for mail and legal documents.
Furthermore, every registered agent must have a physical address or street address in the state, which further disqualifies a PO box. In some places virtual addresses won’t do, either. Sorry! So if you’re your own registered agent and you want to expand to another state, you’ll have to find someone in that state—you can’t do it yourself from another state.
You could go to the trouble of hiring a different registered agent in every state, or you can make things easier on yourself by hiring a national registered agent that can cover all those states at once.
Here’s a list of the things you’re responsible for as your own agent, and what a professional registered agent service would do for you were you to hire one.
Compliance
A registered agent functions as a sort of intermediary between small businesses or limited liability companies and government agencies, law firms, and other businesses. Because of this, it’s the registered agent’s job to keep track of compliance deadlines. Hiring a registered agent service means they’ll keep you abreast of important dates and filing requirements.
Management of Important Documents
The address you list for your business is where all your official correspondence is sent, so it’s important that you choose a reliable address. As your own registered agent, you’ll have immediate access to your documents and notices, but you’ll have to sort and store them, as well as taking action on the ones that require action.
Many of the best registered agent services use online document-management systems, which allows you to view your mail and documents quickly and deal with issues in a timely manner. It also provides you with a digital platform to store your documents, so you can say goodbye to bulky filing cabinets and folders!
Service of Process
Registered agents and service of process go hand in hand. But a lot of literature on registered agents implies that service of process is an everyday occurrence. That couldn’t be further from the truth, though.
A service of process is a legal notice that your business is being sued or some other summons from the court. Despite what TV’s surplus of legal dramas might indicate, a service of process doesn’t arrive every day — or even every year!
However if your business is sued, it’s your registered agent’s job to receive service of process on its behalf. This is your job if you’re your own registered agent. And if you screw it up, you may wish you had hired a service.
Cons of Being Your Own Registered Agent
If you think being your own agent will be easier than hiring someone, you may be right — up to a point. In reality, there are several downsides to being your own agent.
Liability
Many small business owners choose LLC business structures because limited liability protection is an attractive feature that keeps your personal assets and finances separate from your business assets and finances, and keeps them safe. But as your own agent, you don’t really have this protection.
If you don’t keep up with your legal compliance and meet the state requirements for your business, the Secretary of State could dissolve your LLC through administrative dissolution. If this happens, your limited liability protection is automatically nullified.
When you don’t have limited liability protection, you become personally and financially responsible for the business. If your small business is sued, your personal assets and finances could be listed as compensation by the litigant.
You’re not safe if you don’t own an LLC, either. If you own any sort of business entity — a sole proprietorship, limited liability partnership, or corporation — you could face serious legal and financial consequences for missing a service of process.
Lack of Privacy
One particularly troubling aspect of being your own registered agent is having your personal information listed on public records. If your business doesn’t have a physical location or physical street address, then as your own agent you’ll have to list your home address or personal address on public record.
You can’t filter who has access to your information when it’s on public record, which means that nefarious characters like hackers and cybercriminals have access to it and can steal your identity and use it to commit any number of crimes.
It’s also creepy to think that anyone can access your home address, name, and phone number.
Time
Many people don’t realize how time consuming being a registered agent is. You have to be present at your company’s business address during normal business hours so that you don’t miss service of process.
Since in all likelihood your business operates during normal business hours, this creates a massive scheduling conflict that you can’t resolve unless you’ve somehow mastered the art of being in two places at once.
Address Changes
If you’re your own registered agent and you list your home address as your registered agent address, and you then move, you’ll need to file an address change and update your address with the Secretary of State.
If the Secretary of State doesn’t have your address on file, you could miss important documents or correspondence, which could have loads of negative effects. If you choose a professional registered agent and they move, it’s their duty to update their address with the state and notify you about the change in your registered agent’s address.
Pros of Being Your Own Registered Agent
There’s only one benefit of being your own registered agent: You won’t have to pay fees to a registered agent service.
But once you learn about the liabilities, lack of privacy, and time involved with being your own agent, you may choose to hire a registered agent service rather than risk missing a service of process. Thankfully, most registered agent services are usually quite inexpensive.
What Happens If My Business Operates Without a Registered Agent?
If a process server arrives to deliver service of process to your company’s registered agent during business hours and your LLC’s registered agent isn’t present or available, then they’ll deliver the service of process to the Secretary of State.
This isn’t ideal. Now your business is being sued or otherwise summoned to court, but as the business owner you don’t know about the legal proceedings and can’t be present or mount a legal defense. And because you don’t have the luxury of being present in court or responding to the legal notice, it’s likely that your business will have a default judgment issued against it.
In many states, it’s illegal for any business to operate without a registered agent. So if you miss a service of process, the Secretary of State could take away your company’s good standing. Without it, your company won’t be able to get business loans, expand into other states, or even operate in your state.
Losing your good-standing status can be especially difficult if you own a limited liability company. If your LLC loses its good standing, the Secretary of State could initiate “administrative dissolution.” This is when a governing body removes a company’s legal authority to conduct business due to noncompliance with business laws.
In other words, your company could be dissolved if you operate without a registered agent.
Conclusion
You’re legally allowed to be your own registered agent, but the job requires a lot of time and work. You’ll be required to list your personal information on public record, and if you slip up and miss a service of process, it could have devastating results for your company.
Because of this, and the additional services they provide (such as compliance alerts and online document-management systems) many business owners instead opt to use registered agent services.
If you want the best registered agent for your company, read the Best Registered Agent Services. If you want to learn more about the formation process, read my guide on How to Start an LLC. And if you’d benefit from professional guidance during the formation process, check out the Best LLC Formation Services.
If you want to discover the intricacies of a registered agent's role, from whether a registered agent and incorporator can be the same person, to whether a registered agent can refuse to accept service of process, and even if a registered agent can be held liable, delve deeper into the world of registered agent and unlock the answers you seek.
