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6 Risks of Being Your Own Registered Agent

Understanding the dangers of being your own Registered Agent for your business

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Do you know the risks of being your own registered agent in a limited liability company or corporation? Acting in this role on behalf of your company has many benefits, but not without disadvantages.

Unavailability during business hours, missing important legal deliveries, and address being on public records are a few cons. Furthermore, other risks include being unable to expand the company and organization compliance.

Are you ready to discover the risks of being your own registered agent to avoid unnecessary pitfalls? Join us as we discuss the reasons not to function as a designated professional for your organization. Let’s get started.

Who is a registered agent?

A registered agent is a person who completes and files a form on behalf of an organization with the appropriate government agency. Given that you meet the state’s criteria, this individual can be a professional service, a colleague, or yourself.

The registered agent provides a physical address for an online company formation in the setup state and works during regular business hours.

Reasons Not to Become Your Own Registered Agent

There are various reasons not to become your registered agent. Below are the details:

1.      Unavailable during business hours

Registered agents receive relevant correspondence during office hours. They’re available during work hours to collect tax forms and official and legal documents on behalf of the organization. It’s one risk of being your own agent as you’ll be unavailable during business operations.

There’s no sleeping or clocking in on your hours in this role. Acting as a registered agent for your company may affect your spontaneous vacations. 

Due to your work ethic, you may have to plan for national holidays. It might also affect your strategies for customer retention

Furthermore, lunch breaks might require planning to avoid missing mail arrivals in the virtual PO Box. Besides, there’s no point being an entrepreneur when you’re unavailable during business hours.

2.      Missing important legal deliveries

Another risk to being your registered agent is missing legal deliveries crucial to the organization’s development. You might miss an important message due to unavoidable circumstances, even when present during standard business hours.

You might miss essential deliveries when attending to a client in person or on an important phone call. Another distraction involves helping customers find the right product or service.

The delivery professional may conclude your unavailability if you’re too busy to sign off packages, even when present. It’s best not to risk such situations when dealing with essential legal company documents. Lastly, consider hiring a registered agent to perform the necessary duties properly.

3.      Expanding the business might become challenging

A registered agent helps companies run successfully without becoming bogged down with administration requirements. Functioning as your agent gives you limited time to expand business operations or grow the organization.

You’ll become restricted from conducting business in the formation state when serving as your registered agent. The company formation online requirement limits your options even if you want to expand beyond your jurisdiction.

Furthermore, expanding your company into other states becomes impossible since you can’t be in multiple locations. Don’t limit your options with this role; get a professional that can move between jurisdictions for business purposes.

4.      Address availability on public records

Registered agents’ mailing addresses are publicly available, so acting in this role for your company infringes on your privacy. Anyone can get information about your home address, which endangers your safety.

It leaves you vulnerable to angry and violent customers who can become stalkers for not getting ahold of their package.

Starting a public business from home is typical and ideal for revenue generation. However, making your confidential information available to the public is not, and that’s why you shouldn’t be your agent.

5.      Deprives your business of a professional image

You can register your business free, but lawsuits often arise against companies when there’s a financial situation or breach of contract. The company might get sued, and you don’t want business partners, employees, and clients to witness it.

Furthermore, think about getting served while solving a problem or rendering services to customers. It’s an awkward situation that affects the company’s professional image and should be private. But that’s why you should hire a registered agent.

These professionals receive all legal documents on behalf of the company, protecting the organization’s image. It’s a benefit of using a registered agent for your business. Consider working with an experienced attorney to avoid unnecessary pitfalls when resolving disputes.

6.      Risk of business compliance

Registered agents deliver and notify the service process for a limited liability company. Since operating a business requires lots of energy and time, moving many parts at once can be challenging.

Acting as your registered agent is time-consuming, and staying on top of legal issues can become uncomfortable. You risk business compliance, which could make the company lose its good standing and lead to fines.

Don’t risk business closure because of too many responsibilities. It’ll overwhelm you, so consider hiring a registered agent for excellent business practice.

Wrapping up

After learning the risks of being your own registered agent, it’s time to make proactive decisions. Performing this role means risking your privacy and abiding by standard business hours. You don’t want to miss deliveries and risk business compliance, so hire a competent professional.

Consider extensive research when choosing a registered agent service to handle immense business responsibilities. 

Access their level of customer service and go with a nationwide provider. Lastly, get a professional with a permanent address to safeguard your professional image and privacy.

About Author

Picture of Rick Mak

Rick Mak

Rick Mak is a 30-year veteran businessman, having started, bought, and/or sold more than a dozen companies. He has bachelor's degrees in International Business, Finance, and Economics, with masters in both Entrepreneurship and International Law. He has spoken at hundreds of conferences around the world during his career on entrepreneurship, international tax law, asset protection, and company structure. Business Anywhere Editorial Guidelines

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