Can I Be My Own Registered Agent? (Explained)
Limited liability companies are required to appoint a registered agent before they can legally operate in the state.
While you have the option to become your own registered agent, there are several things you should consider before taking on the position.
As a Mergers and Acquisitions specialist, business owners and entrepreneurs seek my guidance when forming an LLC to determine if they can act as their own registered agent.
I’ll share my insights on the overall role, specific duties, and legal responsibilities of a registered agent to help you decide if you can tackle the position.
Quick Summary
- You can be your own registered agent, as long as you meet the qualifications and requirements set by the state.
- Being your own registered agent has benefits as well as drawbacks, and the primary consideration would be the volume of correspondence your business receives.
- Considering that 45.9% of the U.S. workforce is employed by small businesses, many of which are self-managed, understanding the role of a registered agent becomes crucial for business compliance and growth.
- In my professional opinion, while acting as your own registered agent can offer autonomy and cost savings, the complexity and time demands often make it more practical to opt for a professional service.
What Is A Registered Agent?
A registered agent is a person or entity appointed to receive official legal and tax correspondence on behalf of a business entity, such as a corporation or a limited liability company (LLC) [1].
Can You Be Your Own Registered Agent?
Yes, you can be your own registered agent for your business.
However, I always inform clients of the qualifications and responsibilities of serving as their own registered agent, which include the following:
- Physical Location: A statutory agent must have a physical street address (not a P.O. Box) in the state where the business is registered.
- Availability: As a registered agent, you must be available during regular business hours to provide service of process, and receive legal and tax documents.
- Consent: The registered agent must consent to serve in this role. This can be done through a signed consent form or by including language in the LLC Operating Agreement or Articles of Incorporation.
- Residency: You must be a resident of the state to qualify as a registered agent.
- Legal Authority: The registered agent must have the legal authority to receive and forward tax and legal documents on behalf of the business.
Since some states impose additional conditions, I advise business owners to verify the specific requirements and regulations in your state to ensure that you are eligible and able to fulfill the role's responsibilities.
"A big business starts small."
– Richard Branson, Business Magnate, Investor, and Author
The Pros And Cons Of Becoming My Own Registered Agent
Being your own registered agent comes with both benefits and drawbacks, an essential point to consider since small businesses, having contributed more than 1.4 million jobs from March 2021 to March 2022 according to the US Small Business Administration, are crucial to the U.S. economy [2].
The relative size of your business is the main contributing factor.
Here are some of the benefits and disadvantages to consider:
Pros
- Understanding of the business: Serving as your own registered agent will help you acquire administrative and legal understanding and knowledge of your business operations.
- Cost Savings: Clients of mine were able to save money on the fees charged by professional registered agent services, which actually benefits small business owners.
- Control: Being your registered agent gives you greater control over receiving and handling legal documents and important notices on behalf of your business.
Cons
- Availability: You have to make yourself available during regular business hours to handle legal correspondence and other documents.
- Public Local Address: Since the business address of a registered agent is public record, your privacy will be compromised.
- Legal Responsibility: If you're unfamiliar with a registered agent's legal requirements and responsibilities, you may unintentionally fail to fulfill your obligations. That’s why I advise clients to employ a professional registered agent service for at least the first year of operations.
See more about the risks of being your own registered agent in our article.
Related articles:
- Do I Need a Registered Agent in Every State
- How Much Does a Registered Agent Cost
- What is a Non Commercial Registered Agent
FAQs
What Penalties are There If You Don’t Designate a Registered Agent when Creating an LLC?
The penalties if you don’t designate a registered agent when creating an LLC include loss of good standing that may lead to administrative dissolution.
Can A Registered Agent Have A Virtual Address?
No, a registered agent cannot have a virtual address. By law, they are required to have a physical address to accept legal documentation and service of process during regular business hours.
References:
- https://www.sba.gov/business-guide/launch-your-business/register-your-business
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-US.pdf
