While you may find it extremely tempting to play the role of your own business’ registered agent, yet the truth is that this is not something desirable and recommendable. No, it is not at all a good idea. If you ask a financial advisor whether or not you can become your own agent, the answer is definitely yes (because you can become if you want to) but you probably shouldn’t become one.
Are you wondering about what registered agents are? Well, a registered agent is an agency or a person whom your business appoints for receiving legal notices on behalf of your corporation or your LLC. Such important documents may include state correspondence, service of process and notifications regarding federal and state taxes. You may think that acting as your own registered agent will be a cheaper affair but let us tell you about the few reasons you shouldn’t think this way.
Reason #1: The agent should have a physical address
Regardless of the fact that the registered agent is for an LLC or for a corporation, he needs to have a physical address in the state where the company is operating. A private mail service or a post office box won’t just fulfill such a requirement. There has to be a physical office where people can reach to deliver documents.
Reason #2: You might not feel like using your residential address
When you think of being the registered agent of your business, you might have to end up using your residential address and this process can make your home address go public in business records. This can even increase privacy concerns and your address might become available to the marketers and you might start receiving endless junk mails. Any angry litigant could even reach up to your house.
Reason #3: Agents need to maintain their presence during business hours
Registered agents require having definite business hours so that they could accept all services of process. Now since you are the business owner and you also play the role of a registered agent, you might not be able to maintain regular business hours. This is when you may need to hire a third-party registered agent so that he can remain full-time dedicated.
Reason #4: You require having an agent in every state
You require appointing a registered agent in all the states where your company is operating. Having a physical office in each location would rather become a costly affair. When you hire a registered agent service, you can effortlessly appoint an agent in every state so that he could properly handle your business from all locations.
Reason #5: You wouldn’t ever wish to miss any vital notice
Paying just a nominal fee every year for the services of a registered agent can be worth the time he invests. If you work as your own registered agent, you might miss some important documents.
Therefore, whether you form an S-Corp of an LLC, it is always better to hire the services of a registered agent to avoid the above mentioned issues.