There are multiple ways you can fulfill a state’s requirements to have a registered agent for your business. Each has advantages and disadvantages. For most small businesses, hiring a registered agent service offers the best combination of convenience and price. However, it’s worth learning about all your choices before deciding which is right for you.
Here we will cover the different types of registered agents, including doing it yourself, appointing other individuals, and hiring a registered agent service.
What is a Registered Agent?
A registered agent is an individual or organization that you appoint to receive state and legal documents. The agent must be 18 years or older and have a physical address in the state where you are doing business. They must also be available to receive documents during normal business hours, essentially 9 a.m. to 5 p.m. Monday through Friday.
Some states use other terms to refer to a registered agent, including statutory agent, service of process agent, and resident agent.
Recommended Registered Agent Service
Northwest Registered Agent is a top-rated premium LLC formation service with great customer support and a commitment to data privacy.
See how Northwest Registered Agent compares to other registered agent services in StateRequirement’s Best LLC Services review.
Who Qualifies to Act as a Registered Agent?
Technically, anyone who meets the above requirements can be a registered agent. It can be you, a friend, a family member, a business associate, or an employee of a national registered agent service.
Let’s look at the different types of registered agents you can choose from, including some of the pros and cons of each.
Being Your Own Registered Agent
This is the first option most entrepreneurs consider, especially when they are just starting their business and want to save as much money as possible. Being your own registered agent is free, and you are probably willing to take on most roles to ensure your business succeeds.
It can be nice to save a little money, but being your own registered agent comes with some real downsides. You need to be available to receive important documents at a physical address during normal business hours. That prevents you from setting your own schedule and taking advantage of owning your own business. It ties you down in a way that might not justify saving $100 per year.
Being your own agent also exposes your address on the public record for solicitations. This can be a serious headache if you work from home. Even if you work from your office, if you are served as part of a lawsuit, everyone will see it happen. Designating another individual or a registered agent service instead will better maintain your privacy.
Appointing Individuals as Registered Agents
You can appoint anyone 18 or over as a registered agent, which means you could appoint a friend or family member. But can you trust that person to be available when they should be? What if they get sick or just aren’t reliable? You could miss important documents.
Since appointing friends or family can strain relationships, you might instead consider appointing your CPA or an LLC member.
Have Your CPA Act as the Registered Agent
Your CPA might be willing to serve as your registered agent. They likely keep normal business hours so they would be available as required by law. However, there are downsides to this choice.
A CPA is focused on accounting, not being a registered agent. They may or may not take the job as seriously as you need them to. Since it’s something they do on the side, they might not be as quick to notify you of important documents as you would like. They might also charge a high fee for serving as your agent. It’s extra work that they might prefer not to take on.
Another problem with using your CPA is that they can’t help you as your registered agent in other states. If you expand your business across state lines, the CPA can’t be your registered agent because their address is in your current state.
Have an LLC Member Act as the Registered Agent
An LLC member might be willing to be a registered agent for your business and do it without charging a fee. It could be a better choice than doing it yourself or using a friend or family member. The LLC member should be motivated to protect the business and therefore do what is necessary to receive important documents and notify you of their recipe.
An LLC member would probably be cheaper than using a CPA as well.
The problem with using an LLC member is that even if they are highly motivated, they are unlikely to be as efficient and reliable as a registered agent service. Professional services are guaranteed to be there during business hours and also guarantee uploading documents and notifying clients as soon as possible. Your LLC member might be able to compete with a professional service in these areas, but probably not.
Another issue with using an LLC member is that they can’t expand with your business into other states. They can only be your registered agent in the state where they reside.
Hiring a Registered Agent Service
Hiring a registered agent service can cost between $100 and $300 per year. The cost is the biggest downside to using them because other options are free (like doing it yourself). But what these services offer more than makes up for the price.
A registered agent service ensures that your agent is available during normal business hours – always. When they receive state or legal documents, they scan and upload them so you can view them online, and they notify you as soon as possible. It is unlikely that any important documents will be missed by the service and, therefore, by you.
Using a service protects your privacy because your agent’s address is not your address nor your office address. Solicitations and lawsuits go to the agent first.
A registered agent service is the best choice for most small businesses because it protects your privacy and ensures important documents are not missed.
We recommend Northwest Registered Agent, which offers a year of its registered agent service for free when you use the company to form your LLC ($29 + state fees).
Why You Should Choose a Registered Agent Service
We think there are four primary benefits to choosing a registered agent service:
- Privacy. The agent’s address is on the public record. They get the solicitations, and if you are sued, they are the ones who are served the documents.
- Flexibility. Using a service lets you set your own schedule and not be stuck waiting for possible state or legal documents during business hours.
- Legal compliance. The last thing you want is to miss a service of process or other vital communication. A service notifies you and makes the document available to you as soon as possible.
- Peace of mind. No need to put pressure on yourself to always be available or worry if the individual you chose will be available. A registered agent service specializes in being there when they are supposed to be.
Best Registered Agent Service
Our favorite registered agent service is Northwest. The benefits of using Northwest registered agent service are many, and you get all of them for $125 per year. That’s a bit more than some bare-bones services, but those cheaper options are less comprehensive.
The benefits of using Northwest include:
- Locally-scanned documents. The company states that it is the only national registered agent service that locally scans every document you receive.
- Corporate guides. You can call and speak to a local expert on state bureaucracy for business guidance.
- Privacy by default. Northwest never sells your data, and you don’t have to opt out to keep your data private.
- Free limited mail forwarding. Most services only scan state and legal documents. Northwest will also scan up to five other pieces of business mail per year.
- Annual report compliance. You get notifications each year that it’s time to file your annual report, and Northwest will even file it for you.
If you are looking for a registered agent service, we encourage you to give Northwest a try.
Recommended Registered Agent Service
Northwest Registered Agent offers its registered agent service for one year when you form your LLC ($29 + state fees) with them.
What are the Types of Registered Agents FAQ
Why do I need a registered agent?
You are required by state law to have a registered agent. That’s primarily to ensure that you receive service of process – notification that you are the target of a lawsuit – as soon as possible.
What does a registered agent do?
A registered agent has a physical address in the state where you do business. They are available to receive service of process and other state documents at that address during normal business hours. They make sure you get vital documents sent to your business.
Do I have to use a registered agent service?
You don’t have to use a registered agent service. There are other options, like doing it yourself or having another individual serve as your registered agent. However, we think using a registered agent service is the best option because it improves your privacy, ensures legal compliance, and gives you flexibility.
Can I change my registered agent?
You can change your registered agent whenever you like. Just follow your state’s guidelines and notify the proper government body when you make the change. If you need a registered agent that has the capacity to do business in multiple states, then read our guide on How to Find a Registered Agent in Another State.
Can I be my own registered agent?
Yes, you can be your own registered agent. Just remember, that means you need to be available to receive documents during normal business hours. Unless you plan to always be at your place of business, it’s usually a better idea to hire a registered agent service to do the job for you.