Entrepreneurs: Should You Act As Your Own Registered Agent?


Did you know that it’s not always necessary to appoint a third party as your company’s registered agent? Entrepreneurs may act as their own registered agent, or RA, on behalf of their business.

When you decide to act as an RA, you’re doing more than saving a little bit of money for your business. It’s a major responsibility. You’re now legally the point of contact between the business and the state. Certain requirements are expected of you in this title. There are also consequences you may have to face if you do not fulfill certain duties as an RA that could land your business in hot water.

Let’s take a closer look at the role of a registered agent and whether or not entrepreneurs should agree to act as their own agent.

What Is a Registered Agent?

Registered agents are individuals, or third-party organizations, designated to receive service of process on behalf of a business from county and state agencies. When a business is formed on a state level, it is given a right to due process. Should your business be served with a lawsuit, for example, they would need to be notified before they were served. An RA would receive that notification because they are the designated point of contact.

Don’t get too nervous reading this! Acting as an RA is about more than being notified about potential lawsuits.

An RA also receives other important paperwork, like tax forms, on behalf of the business. They help organize the materials to avoid losing or forgetting anything. Later, these documents are delivered to the business, and its owner, in a timely fashion. This allows the business owner to respond to the documents and stay on top of their paperwork to remain in compliance.

Registered Agent Requirements

If you want to become a registered agent, you will need to meet certain requirements first. Here’s a look at the minimum qualifications one must obtain to be act as a registered agent.

  • A physical street address. This address may be your own or the address of the third party organization, should you choose to work with one. It must be in the state you incorporated or formed an LLC for your business. You may not use a P.O. Box.
  • Availability during general business hours. Business hours may vary depending on the state you do business out of. For example, Florida states that corporations must keep registered agent offices open from 10 AM until noon each day outside of Saturdays, Sundays, and legal holidays. Check in with your state to make sure you know what general business hours look like for an RA and note you must be available to receive documents during this time frame.
  • State residency. If you decide to act as your own registered agent, you must physically be a resident of the state as well.

Should I Become My Own Registered Agent?

This is a difficult question to answer,  and no one can tell you whether being your own RA is your best bet, without a close look at your individual situation and business.

However, in general, it’s a good idea for entrepreneurs to thoroughly examine the requirements for being an RA before acting on making a decision.

Entrepreneurship, especially in its early days, means wearing a lot of different hats. You may be working odd hours. Perhaps you’ll take meetings or travel during general business hours. Your business might not even have a physical location. Or, the company may be conducting business outside of its formation state.

There’s also the separate issue of accepting documents and trying to keep up with everything on your own. This is a time-consuming role. It requires paying attention to detail and meeting deadlines. While some entrepreneurs may be able to easily handle these duties, others will require extra help.

Need Help? Consider Working With a Third Party Registered Agent Service

If you worry that you can’t do everything required of an RA, there is some good news. There are many third-party organizations proficient in acting as your designated registered agent.

Working alongside a trusted and reliable third-party RA can be just as beneficial, if not more so, than doing it on your own. You’ll receive the peace of mind in knowing a competent individual is handling your paperwork instead of worrying that you’re missing out on collecting and organizing critical documents.

There’s also an added layer of privacy that comes with working alongside a third party RA. If you act as your own registered agent, you need to be prepared to receive personal documents in a public environment. You may have employees, vendors, or customers present. If they saw, for example, you get served with a lawsuit publicly, it might negatively impact the way they view your business. A third party discretely delivers these documents, giving your business added layer of security.

One Final Note About Registered Agents

Not every business needs an RA. While registered agent services are required by most states after you form your business, the designation is not required by every state.

That’s why you should check in with the state where you conduct business. Make sure it’s a requirement for your business before proceeding forward in determining if you, or a third party, will act as your RA.

Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Photo by NESA by Makers on Unsplash.

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