Do I Need to Have a Registered Agent When Starting an LLC?
A registered agent is a vital part of the American business landscape these days, as every business entity in the country needs to designate one.
However, we often encounter the question of when a limited liability company (LLC) is required to name a registered agent. Is it required to form the business initially? Is it something that can be added later?
In this article, we’ll discuss everything you need to know about when to get registered agent service for your LLC. In addition, we’ll walk you through how to designate your registered agent. With that, let’s dive in and answer all the questions you might have about this important business service.
What Is a Registered Agent?
The role of a registered agent is an important one for any business entity based in the United States. The registered agent is the person or business that is in charge of receiving your document deliveries from the state government, including service of process, compliance filing reminders, tax forms, and the like. Upon receipt of any of these important documents, the registered agent immediately notifies you, then forwards the document on to you.
If you don’t have a registered agent, your state may be unable to reach you in a timely manner, which could be catastrophic in the case of a lawsuit against your company. In this situation, the suit could actually progress without your knowledge, which could lead to a default judgment against you. Clearly, this is a situation best avoided.
When Do I Designate a Registered Agent for My LLC?
While each state has its own set of rules and regulations for LLC formations, in general you will need to designate a registered agent for your limited liability company in your formation document itself. In most states, this document is known as the articles of organization, and it’s where you describe some key details of your business, including the identity and address of your registered agent.
If you don’t designate a registered agent during the formation process, your application will likely be deemed incomplete until you do. This means that you will not be able to conduct business at all, and if you do, your LLC will be noncompliant, and will not operate in good standing with your state of formation.
Who Can Be My LLC’s Registered Agent?
Legally speaking, there aren’t too many restrictions on who can act as a registered agent for your limited liability company. We will note that you should probably check with your state government to make sure they don’t have any additional qualifications for being a registered agent, but for the most part, these are the guidelines:
- If your agent is an individual rather than a business entity, they must be 18 years of age or older
- Must be present at the provided address from 9am to 5pm, Monday through Friday
- Must have a street address (not a P.O. Box) located in the same state the business was formed in
Should I Hire a Professional Registered Agent Service for My LLC?
As you can see in the previous section, there really aren’t that many restrictions on who can serve as a registered agent. Because of this, there are quite a few LLC owners who choose to serve as their own registered agent, but we typically caution against doing this.
There are several major issues with designating yourself as your registered agent, starting with the fact that you need a registered agent who is located in each state where you do business. Obviously, if you serve as your own agent, you’re limited to doing business in the state where you’re physically located. Furthermore, you’ll need to be at your place of business every weekday from 9am to 5pm, which means no vacations, no sick days, and no lunch breaks.
If someone sues your business, there’s a good chance you’ll be served in front of your customers or employees if you serve as your own registered agent. If you’re a home-based business, your personal address will need to become a matter of public record. In other words, there’s significant downsides no matter what your situation is.
Now that we’ve established that it isn’t a great idea to be your own registered agent, let’s talk about who should be. While some people designate their spouse, a trusted friend or family member, or perhaps their lawyer or accountant, we prefer hiring a professional registered agent service.
Most registered agent services are quite affordable, in the $10/month range. The majority of them have offices in all 50 states too, so your expansion plans are basically unlimited. It’s also nice to hire someone whose focus is entirely on providing registered agent service ― the people who work for these companies make their living on being registered agents, so they’re experts in every aspect of the role.
If you’re interested in this option, we came up with a list of our preferred registered agent services that you can peruse, but our two favorite choices are especially intriguing if you haven’t formed your LLC yet. Northwest and Incfile both bundle in 12 months of their registered agent service with any purchase of an LLC formation package from them, which starts at just $49 for both companies.
We think this is an excellent bargain, so if you want to kill two birds with one stone, give Northwest or Incfile a look for the combination of LLC formation service and registered agent.
Do you need to have a registered agent when you start your limited liability company? The short answer is yes, but there are several different aspects to consider. You’ll need to decide what type of registered agent you want, whether that means serving as your own, designating someone you already know, hiring a professional registered agent service, etc.
We hope this article cleared up any misconceptions you had about when to designate a registered agent for your LLC, and we wish you good luck in your business future!