In order to form or operate a compliant business entity in the United States, you’ll need to designate a registered agent. Registered agents are an important part of the American business landscape, because they ensure that the government has a reliable means of contacting your company’s official representatives.
A common question we hear from all sorts of entrepreneurs is that of who is eligible to serve as your company’s registered agent. With that in mind, we put together this article to help you determine who can be the registered agent for your limited liability company.
In order to break through any potential misconceptions, let’s walk through the legalities of who can serve as a registered agent, along with a discussion of who should be your agent.
What Is a Registered Agent?
Designating a registered agent is one of the first and most important steps in the business formation process. In fact, you’re legally required to do so before you’re even allowed to start your limited liability company (LLC), as the “articles of organization” form you’ll fill out to create your LLC requires you to supply your registered agent’s name and address..
But what is a registered agent anyway? Your LLC’s registered agent can be either a person or a business entity, and their responsibility includes receiving important legal document deliveries from the state ― including service of process, compliance reminders, tax forms, etc. ― then alerting you of the documents’ arrival, and forwarding them to you as soon as possible.
If you failed to designate a registered agent, the government wouldn’t know where to send these crucial documents. If there was a lawsuit in which your LLC was a defendant, the lack of a registered agent might lead to the suit proceeding without you even knowing anything about it, which is obviously far from ideal.
Some of you may be wondering why you can’t simply perform this task yourself, and the answer is “you can” ― but it’s also more complicated than that.
Who Can Be My LLC’s Registered Agent?
Before we get too much deeper into this topic, we should note that the rules for being a registered agent do vary somewhat from state to state, and because of this we strongly recommend that you get in touch with your formation state to find out if they have any additional specifications.
With that said, the general guidelines for serving as an LLC’s registered agent are as follows:
- If an individual instead of a business entity, the registered agent must be at least 18 years old
- Must be present at the provided address for all standard business hours on every weekday
- Must be located within the same state as the LLC is registered
As far as the legalities are concerned, that’s about it! As long as your registered agent fulfills those three guidelines, they should be good to go ― and that includes you, if you would like to serve as your company’s own registered agent.
This issue is greater than just the simple legalities though, so let’s change gears a bit and talk about who should be the registered agent for your business.
Who Should Be My LLC’s Registered Agent?
Serving as Your Own Registered Agent
Let’s cut to the chase: in general, we don’t typically recommend serving as your own registered agent. There are quite a few reasons for this, but let’s start with the few positives of designating yourself for this important position. First off, you can save some money because you won’t have to pay anyone to be your registered agent. Secondly, if you’re already required to be present at your place of business every weekday from 9am to 5pm, it could even be a little bit convenient.
However, that’s where the positives end. One of the biggest downsides is the fact that because you need a registered agent in each state where your business operates, serving as your own agent restricts you to doing business in only the state where you are physically located. Also, as we hinted at in the previous paragraph, a registered agent needs to be available during all standard business hours, which means you could never take a vacation or a sick day, or even go out for lunch.
Another major issue with serving as your own agent is that if your business is sued, your clients and/or employees might see you get served for a lawsuit, which would be an awkward situation at best. For those of you operating a home-based business, this obviously isn’t as much of an issue, but in that situation, keep in mind that a registered agent’s address is public record. Do you want your home address in the public record?
Designating Your Lawyer or Accountant as Your Registered Agent
This is another popular option, and it’s easy to see why. You already do business with this person, so why wouldn’t you trust them to take on an additional responsibility? While on the surface this might seem like a good idea, it also has its issues.
Lawyers and accountants often charge very high rates to provide registered agent service, especially compared to professional registered agent services that can undercut their prices by hundreds of dollars. Furthermore, your attorney or CPA may not have much (if any) experience serving as a registered agent, and they may not know what’s expected of them.
Finally, this option runs into one of the same problems as serving as your own agent: you aren’t able to expand your business into an additional state. Seeing as most lawyers and accountants only hold offices in one state, you wouldn’t be any better off in this regard than if you designated yourself as your registered agent.
Hiring a Professional Registered Agent Service
In our opinion, this is by far the best option for the majority of our readers. A professional registered agent service is almost always cheaper than hiring a lawyer or accountant, and most of them have offices in all 50 states, so your expansion plans aren’t hindered in any way.
Additionally, with a professional registered agent service, you’re hiring a company with true expertise in providing this very service. It’s not a secondary line of business like it would be for an attorney or accountant ― being a registered agent service is at the core of what these businesses do every single day.
The more difficult question is which one to choose. There are quite a few registered agent service providers out there these days, and it can sometimes be tricky to discern how they differ from each other. That’s why we’ve ranked our favorite registered agent services to make it easier to pick the best ones.
Our two favorite options ― Incfile and Northwest ― each provide a full year of registered agent service when you hire them to form your LLC. If you’ve already formed your business, these other factors are likely more important to you:
- Northwest – $125/year
- Incfile – $119/year
- Northwest – Customized assistance from a dedicated representative
- Incfile – Quality support, but not as personalized as Northwest
- Northwest – Small volume of feedback, but strong review scores
- Incfile – Thousands of reviews with high rating scores
In our opinion, you really can’t go wrong either way. If personalized customer support is your priority, give Northwest a look. If you place a high value on reviews, Incfile should be a solid fit.
There really aren’t too many rules and regulations regarding who is legally allowed to serve as your registered agent, but in our opinion it’s pretty clear that some of the options are better choices than others. With a professional registered agent service, you’ll never have to worry about having your expansion plans limited, missing important document deliveries, or paying too much.
When it comes to who can be your LLC’s registered agent, the answer is pretty much anyone who’s located in the same state as your business. But if the question is who should be your registered agent, we think the answer is hiring a professional registered agent service.
No matter which of these options you choose, we hope you’re satisfied with your decision, and we wish you and your business the very best!