6 reasons you shouldn't be your own registered agent

The answer to the question "Can you be your own registered agent?" is yes, but you should consider some of the downsides before making your final decision.

What is a registered agent?

A registered agent is a person or agency your company appoints to receive official notices on your business's behalf. This includes service of process, correspondence with the state, and notifications about state and federal taxes.

The agent for service of process can be anyone—the business owner, an employee, or an outside person or service hired to fulfill the role.

Registered agents are particularly important for companies that are not based in a state where they are doing business (for example, you're located in New York but also sell things or provide services in New Jersey). There must a way to contact the company for legal purposes, and a designated registered agent is the way to do so.

Many companies hire a registered agent service, a company that is set up to accept notices and service of process for other businesses. These firms have thorough procedures in place so that they can track anything they receive on your behalf and ensure it comes to your attention quickly.

It might seem as if it would be less expensive and simpler just to be your own registered agent, but there are several reasons why this this might not be the best option.

1. Sharing your address

When you file your business formation paperwork with the Secretary of State, you are required to give the name and address of your Registered Agent. Once this paperwork is filed, the name and address of your Registered Agent are now part of the public record. If you are running your business from home or your business doesn't have a traditional public-facing office, having your home or business address part of the public record can compromise your privacy. If you hire a Registered Agent service, the address of the company you've hired will become the public address of your company. Which shields your privacy. 

2. More mail to process

If you plan on being your registered agent, you may have to use your home address (particularly if you have a home-based or web-based business), which will make the address public. In addition to the privacy issues mentioned above, making your address public can also lead to an uptick in the amount of junk mail you receive. Processing this extra mail can be overwhelming and important notices can get lost in the shuffle.  By hiring a Registered Agent service, you have someone who can sort through your mail. Get rid of the junk and ensure that you are given important documents promptly.

Using a Registered Agent service also avoids having a process server, or angry litigant come to your home to serve you with notice of a lawsuit, something you may not want to deal with at home.

Additionally, it could mean a process server or angry litigant could come to your home to serve you with notice of a lawsuit, something you may not want to deal with at home.

3. Address change notices must be made promptly

As you wonder, "Can I be my own registered agent?" if you're planning on moving or relocating your business location, you would need to notify the state of each address change, which can be time-consuming. You will likely also need to pay a fee for each notification of an address change.

When you add up those fees and consider the time involved in handling address changes with the state, hiring a registered agent service may be simpler and possibly less expensive.

4. Agents are required to keep regular business hours

Registered agents need to have regular business hours to accept service of process. This can be difficult for small business owners who often cannot stay in an office all day and cannot afford to hire full-time employees to work out of a specific location. Hiring a Registered Agent means someone is always available to accept your important documents, leaving you free to run your business instead of waiting for the mail to arrive. 

5. You must have an agent in every state

You need to designate a registered agent in every state your company operates. Maintaining a brick-and-mortar location for your company in each state would be costly.

If you hire a registered agent service, you can easily maintain an agent in every state without hiring employees or maintaining a physical location where you are conducting business.

6. You never want to miss an important notice

Paying a fee each year for registered agent services so that you have an agent for service of process and other notices can be well worth the time you will save in trying to keep track of official notices and ensuring you're sorting and reading your mail.

This type of service ensures you won't miss or forget an important notice, which could be hugely expensive for your company if you don't respond to pending litigation or fail to pay taxes by their deadlines.