What is a Registered Agent & Should I Be My Own RA? – Find Out Now

Learn what a Registered Agent is and if using one (or being your own RA) is the right choice for your situation as an international founder.

Incorporating your business is a great way to separate your personal and business assets, but regardless of your company is an LLC or corporation, you need to have a registered agent. This can be the business owner, another member, or a third-party service. It can be tempting, particularly if the business is a small one, to simply name yourself as the registered agent, but this isn’t always the best move to make. Why?

Read on to learn about what a registered agent (RA) is and whether or not you should be your own registered agent.

What is a Registered Agent?

An incorporated business needs someone available that can be contacted for legal purposes during regular business hours. Such things as service of process, correspondence with the state, and tax notifications, both federal and state, require a representative with a brick and mortar address – a PO Box is not allowed.

Can the business owner be the Registered Agent?

There is nothing preventing the owner of the business from acting as the RA for the company, but it is not often the best idea. If you operate from home or a fixed address and keep regular hours then perhaps being the RA would fit in with your schedule.

But before you commit you need to ask yourself some questions:

·       Am I tied to one location from 8 am until 5 pm, five days a week? This may not be a problem, but if you want the freedom to go out to business meetings, pick up inventory, and make sales calls you can’t stay in one place.

·       Am I organized enough? Being an RA requires planning and efficiency; your business can’t afford to miss responding to litigation or tax payment deadlines. For some entrepreneurs, being organized is part of their skillset, but for others, it may be better to have someone else prompting you to make sure you’re ready.

·       Does my business operate in several states? A business needs an RA in every state in which it trades. Many companies, especially when starting out, don’t have the resources to have multiple premises and the only cost-effective way to deal with the problem is to hire a registered agent service.

·       Am I happy to use my home address? If you operate a web-based business or work from home you will have to use that address as your RA address. This raises privacy issues as the address is in the public domain and no one likes to open themselves up to more junk mail or people turning up unannounced.

·       Do I have a reputation to protect? Should your business be involved in litigation, are you happy to have a court summons or legal notice served to you in your home or place of business? For some, this is just part of the job description, but many people would find this difficult and fear their reputation might be damaged. Having an RA service insulates you from this situation.

What are the pros of being your own Registered Agent?

The most attractive reason for a business owner fulfilling the role of the RA is cost saving. If a company is trying to keep outgoings to a minimum then saving the costs of a registered agent, whether an outside agency or a full-time employee, is one way of doing that.

It also means that nothing is filtered before it gets to you – for some, this is unwelcome, but some people would prefer to get all information and marketing to a business straight to them.

Should I be my own Registered Agent?

The answer to this question depends on individual circumstances. If you are operating on a tight budget and able to keep normal working hours in one location, and are organized enough to do the work required, and aren’t too worried about having your address in the public domain, then there is nothing to stop you from being your own RA. For example, a retail store owner would likely not have a problem being their own RA.

However, it may be that as the founder and leader, a business owner is better off concentrating on core issues, guiding the company in its growth and direction. Everyone in business values their time and often it is better for a business owner to use theirs to build and nurture the company and leave the work of an RA to a specialist.