When you form a new business (by doing it yourself or through a professional) in the United States, one of the most important steps of the formation process is designating a registered agent for your company.
There are some other vital elements, like coming up with a good name for your business, or getting your licenses and permits. Still, choosing a registered agent is such a crucial step that the state won’t let you form your business without one.
We get lots of questions from our readers about the role of the registered agent, and one of the main ones we frequently hear is “Can I be my own registered agent?” While the short and simple answer is “yes,” there’s quite a bit more to it than that. With this in mind, we decided to create this article in order to discuss all the relevant aspects of serving as your company’s own registered agent.
What Is a Registered Agent?
Let’s get the basics out of the way before we get into the nuances. The registered agent is an individual or a business entity that receives important document deliveries from your state government. Then, your agent will inform you of the delivery, scan the forms to create digital backup copies, and forward them to your business location.
The specific documents that your registered agent handles include service of process for lawsuits and compliance reminders for document filings like annual reports, along with tax forms and other docs from your Secretary of State’s office. The registered agent often will help you keep track of deadlines and due dates as well.
You have several options for who can serve as your registered agent. As far as the DIY 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.
What Are the Requirements for Registered Agents?
Some states have their own wrinkles when it comes to registered agent eligibility, but for the most part, the rules and regulations are roughly the same no matter where you form your business.
Regardless of who you select as your registered agent, they will have to be present at the address indicated on your formation documents from 9am to 5pm, Monday through Friday.
Beyond that, the registered agent’s office must be located in the same state where your business is registered. In addition, if your registered agent is an individual instead of a business entity, there’s a requirement that they are at least 18 years of age.
There aren’t really many other requirements, but if you would like to know more about the rules in your own state, check out our full article on the subject.
Can I Be My Own Registered Agent?
It’s not uncommon at all for entrepreneurs to designate themselves as the registered agent for their business, but that doesn’t mean it’s a good idea. While you can save some money by not paying someone else to serve as your registered agent, that’s the only positive aspect of being your own agent.
We already mentioned the requirement for registered agents to be available at their physical address during all standard business hours, which is a serious drawback for fulfilling this role yourself. Another major problem is that if you receive service of process at your business location, you run the risk of your clients and/or employees seeing it happen.
If you operate a home-based business, that last point is obviously not as much of a concern, but in this scenario you will need to enter your personal address into the public record. For many reasons, this is a serious privacy issue that most people would rather avoid.
The other problem we’ll point out in this situation is that you won’t be able to expand your business to additional states if you serve as your own agent. The reason for this is because you need to have a registered agent located in each state where you do business, and you obviously can’t be in multiple states at the same time.
Can I Have a Friend, Family Member, or Business Associate Serve as My Registered Agent?
Quite a few businesses choose one of these options for a registered agent, and in many ways they serve as extensions on the DIY method.
The issue with most of these choices is that you encounter many of the same problems that you would if you were your own agent, especially the issue of not being able to expand if your registered agent doesn’t have offices in multiple states.
Whether it’s an employee, a business partner, a friend, or a family member, the expansion issue isn’t the only one that applies to these people. Do you really want to put any of these people in a position where they would need to be present at the address provided to the state during all standard business hours?
The issue of having people witness a sensitive document delivery is still present with these options as well.
Can I Hire Someone to Be My Registered Agent?
Before we get to our preferred option, we’ll briefly state that some people have their attorney or accountant provide registered agent service, but we don’t typically advise our readers to do this either.
As you can probably guess by now, this option also runs into the issue of not being able to expand to additional states. Also, lawyers and accountants usually charge high fees to be your registered agent, but they don’t have the expertise as registered agents to make those fees worthwhile.
With all that said, the option that we strongly recommend to just about every business entity in America is hiring a professional registered agent service. These companies make their living providing top-notch registered agent service to companies of all sizes, and most of them also have offices in all 50 states, making potential expansion a breeze.
These reliable and trustworthy service providers typically have low price points for registered agent service as well, often around $10 per month or even lower. The privacy these companies allow you to maintain is another big advantage.
Obviously, we prefer registered agent services to the other options, but how do you choose the right one for your company? If you want an in-depth look at all the major national registered agent service providers, check out our guide to the top options.
For a quick overview though, take a look at our top three choices. All of which are more than half the cost of LegalZoom:
- Northwest Registered Agent: Northwest charges $125 per year, and they’re the only major national registered agent service that locally scans every document they receive as your agent. They also have personalized customer support that assigns a dedicated account representative to each client. If you also need to form your business, Northwest offers a $225 business formation package that includes a year of registered agent services.
- Incfile: They are one of the most well known LLC and registered agent services available, with rates that start at just $119 per year. Plus they offer an awesome free LLC formation service if you haven’t created a business yet and would like a free registered agent service in the process.
- Zen Business: Zen Business has the same $119 base rate that Incfile offers, with an extra focus on making the process less stressful and an easier to use website. You’ll receive their outstanding customer support, as well as access to helpful software that allows you to track and file your company’s annual reports.
While you are legally allowed to serve as your company’s own registered agent, we don’t think that it’s advisable in most cases. Especially considering how affordable professional registered agent services can be, it’s just not worth the hassles and privacy concerns to be your own registered agent.
It should be noted that each of the options discussed in this guide has its place, and that depending on the details of your business, some of them may make more or less sense for you. Still, for most of our readers, the peace of mind and reliable service provided by professional registered agents are absolutely worth the cost.