Do you know the most common registered agent myths misleading entrepreneurs across various industries? Many people perform this role themselves instead of hiring professionals because they believe it’s no different from mail sorting.
Few people recognize the risk they put their assets by serving as their business registered agent.
Are you a new entrepreneur seeking the most common registered agent myths for improved decision-making? Join us to discuss the profession and debunk widespread misconceptions about the service. Let’s get started.
What does a registered agent do?
A registered agent is an individual or organization designated to accept your business’s necessary government, legal, and tax documents. This person becomes the official point of contact for information in a state before forwarding communications to the organization board.
Most states mandate hiring a registered agent when forming a corporation or LLC. You’ll provide the name and address of this professional representing your business to operate in many jurisdictions.
A registered agent can help you file the Articles of Organization with the appropriate regulatory body. Besides, the person could be yourself, a professional service, or a colleague that meets the requirements.
What are the Common Registered Agent Myths?
There are various conspiracy theories and beliefs about registered agents that are only myths, not true. Some of them include the following:
Home-Based or Single-Member Businesses Don’t Need Registered Agents
The most common misconception about registered agents is that single-member entrepreneurs or home-based businesses don’t need them.
A registered agent for your business can operate in many states, whether you have 1,000 employees or running a one-person show.
After the online company incorporation, the professional helps you avoid unnecessary state penalty fees. You also prevent non-compliance risk and maintain good organizational standing in the formation jurisdiction.
After the company formation online, you need a registered agent to operate in jurisdictions other than your formation state. The person must have the criteria to represent organizations and handle critical services in different areas.
Registered agents keep all-important business paperwork, notifications, and emails in one place, making them easy to track. Besides, they store essential files such as licenses, permits, and tax filings until necessary.
A registered agent is often available during regular business hours to receive vital documents for the company by law.
Hiring the professional means you’ll privately have lawsuit receipts and other legal documents. Besides, the service protects your home address from public records, protecting you from unsatisfied customers.
You Should Be Your Own Registered Agent because it’s Economical
Although becoming your registered agent is legal in many jurisdictions, check your state regulations before deciding. Furthermore, think about the responsibilities and required designated address before jumping to a conclusion.
Acting as your registered agent saves costs when starting and provides short-term convenience. However, there are various implications to consider, whether a beginner or seasoned entrepreneur.
The job requires you to operate Monday through Friday, which is regular business hours. You can’t take breaks or go on vacations during these days when performing the role of an agent yourself. You can’t even hold business meetings with clients across town without missing the service of the process.
If you don’t understand legal documentation or compliance issues thoroughly, unnecessary fines and business closures are possible. Handling time-sensitive materials or misinterpreting terminologies might also attract penalties.
Your personal information, such as address and name, would become public if you function as your company’s registered agent. With your address out there, everyone can access it from anywhere. Besides, it’s a privacy breach that can interrupt business proceedings and your life.
Consider hiring a professional to handle these affairs to avoid revealing your home location to customers.
A Registered Agent Role is Similar to a Mail-Sorting Service
Although registered agents receive tax or legal mail on behalf of a company, it doesn’t make the role a mail sorting service. These professionals assist with annual report filing client support, alert owners about pending lawsuits, and maintain a compliance calendar.
A registered agent is the official point of contact for your business on file with the state by law. They receive official communication from the organization and get crucial compliance information.
A mail-sorting service sort, review and process inbound mail for distribution. There are mail sorting services that can alert you of documents upon arrival.
Virtual Post Mail (VPM) or virtual mailbox can scale your business for revenue growth. It can sort and digitally scan packages with real-time access to your mail.
Registered Agent Services are Expensive
Consider relocating or moving the business location before becoming your registered agent. You’ll need to notify each state of your decision and address the change, which is tiring and time-consuming. Each notification for the movement also attracts a fee.
After considering the time and fees involved in the process, hiring a registered agent is less expensive and more straightforward. Although performing this role for the business yourself is cheaper, you’ll find affordable options.
Registered agent services prices can vary based on your interests in what they offer.
Now you know the most common registered agent myths, it’s time to separate the facts from misguided misconceptions. Hiring these professionals for your business is crucial, even if you’re a home-based business or a single-person LLC.
However, think before you leap, and don’t become your registered agent without considering the implications. Furthermore, review the duties and responsibilities, including the regulations guiding the career, before deciding.
Remember that hiring a registered agent is different mail sorting services, but there are varieties and affordable options