KPMG Spark Blog
The Pros and Cons of Acting As Your Own Registered Agent
Most entrepreneurs know that when you incorporate your small business, whether your entity is an LLC, Corporation, or C Corporation, you’re going to need a registered agent. An RA serves as your point of contact between the business and the state, accepting official documents on behalf of the business and helping the company remain in compliance with state law. Your RA can be a third party service, or you may act as your own registered agent.
While many small business owners work alongside an organization, some decide that they want to be their own RA — and that’s legally acceptable. Remember that with great power comes great responsibility, on top of all of your other existing entrepreneurial duties. If you’re planning to act as your own registered agent, keep the following pros and cons in mind before getting started.
Pro… It’s less expensive to designate yourself as an RA
While we can’t quote you an exact price range, acting as your own RA is going to be much less expensive than paying an outside organization for assistance. If you’re on a tight budget, you might consider acting as your own RA for a bit.
Con…You’ll need to be available during general business hours
Think Monday through Friday during general hours of operation, like 8 AM to 5 PM. Not only will you need to be available to accept service of process during these hours, but you will also need to be a resident of the state and present at your designated physical address. (Another requirement for registered agents since P.O. Boxes are not considered to be an acceptable form of address.)
While much of this will depend on the entrepreneur’s circumstances and nature of their small business, I placed availability in the ‘con’ section simply for those ‘what if?’ moments. Even if you work from home, you may find there are days where you need to leave to take a meeting offsite or head on a business trip. If you’re not physically there during the hours you said you would be to accept the documents, it could spell trouble for your business.
Pro/Con…You’ll need to be extremely organized
Some of the legal documents you may receive as an RA include, but are not limited to, general paperwork like annual reports, franchise tax forms, and renewal reminders.
If you are naturally organized when it comes to paperwork and time-sensitive materials, then you’re likely to stay on top of everything as an RA. However, if you struggle with organization and worry important documents could slip through the cracks, you might want to designate a third party RA. They will be able to keep your paperwork organized and passed along to you in a timely manner so your business doesn’t fall out of good standing with the state.
Pro/Con…You’re comfortable receiving confidential paperwork publicly
Every entrepreneur is different. Some aren’t phased at the thought of being served confidential legal notices, like a court summons or lawsuit paperwork, in public. Others might be extremely embarrassed and worried that the act could damage their reputation. If you fall into the latter category, working with a registered agent service provides an added layer of security. They will accept the documents on your behalf, so that no unwanted visitors show up at your designated address, giving you and your business some privacy and peace of mind.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Twitter @mycorporation.
Please note that KPMG SPark's sponsorship of this blog article is not intended to address the specific circumstances of any particular individual or entity and does not constitute an endorsement of any entity or its products or services. This content represents the views and opinions of the author, and does not necessarily represent the views or professional advice of KPMG LLP.
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