Registration
There are two types of registration related to forming an LLC. Registered Agents, and Registered Office. Both are state requirements.
When forming an LLC it is a state requirement that you designate a Registered Agent.
While an LLC can provide a great deal of security, it cannot be a faceless entity. Existing only on a form at a government office or in a file in the cloud is not enough. An LLC is required to have both an actual person, and a physical address in order to meet the preconditions and act as a reliable point of contact. This designated person (or company) and street address is known as the Registered Agent and the Registered Office.
Note: Your Registered Office must be a street address located in the state where your LLC is being formed. It cannot be a PO Box address.
Registered Agent/Address
Registered Agents are known by several other names. In some states, a Registered Agent is called a Resident Agent, a Statutory Agent, a Statutory Agent for Acceptance of Process, or an Agent for Service of Process. Whatever title your particular state uses, they are all the same.
The laws regarding Registered Agent requirements vary by state, but the following are base requirements:
- If the LLC’s Registered Agent is a person, that person must be a resident of the state where you are forming the LLC.
- The Registered Agent must be at least 18 years of age.
- The Registered Agent must have a street address located in the state where the LLC is being formed.
- The Registered Agent must be available during normal business hours, Monday through Friday, 9am to 5pm.
- If the LLC’s Registered Agent is a company, the company needs to be registered to do business in the state in which the LLC is being formed.
Note: Some states require a written and signed consent form known as a Registered Agent Consent to Appointment (or similar name) to be on file with the Secretary of State’s office.
The primary reason for this is to ensure that legal documents can be delivered in the event of a lawsuit against your company. Your business cannot be outside the reach of the courts. The Registered Agent and Office will also be used for the mailing of business and state tax notices, payment reminders, and other documents.
Tip: Many LLC’s use the address of their accountant to satisfy this requirement as it simplifies the delivery of tax and other documents the accountant deals with without having to go through the managing member of the LLC. It also provides an added layer of security by having your LLC’s address different from your home address in public databases.
Your LLC’s address can be your home address, that of a trusted friend or relative, that of your accountant or tax adviser, or even an office you maintain for your own reasons. As long as the registered agent is present there during normal business hours.
Who can be a registered agent?
There are several options.
1- YOU can be your LLC’s Registered Agent.
2- Your Accountant can be your Registered Agent
3- Your Lawyer can be your Registered Agent
4- A friend or relative can be your Registered Agent
5- You can hire a Commercial Registered Agent to be your Registered Agent.
Note: There are a few states that will allow an LLC to serve as its own Registered Agent, but this is an exception to the rule. In the majority of states an LLC cannot be its own Registered Agent.
Which Registered Agent option is best?
We’ve already determined that registering your LLC in the state in which you live is the best option, so using the street address of your home is the simplest option here. Both for convenience and costs (it’s free).
The downfall of this is the lack of privacy. The upside is a streamlining of communications.
If you wish to have another layer of separation between you and the public you might opt for using your Accountants or Lawyers address. Most accountants will do so for free or for a small charge, while Lawyers tend to charge more.
A trusted friend or relative, one who has a street address in the state, can be another option, but is not recommended if said friend or relative is away from their address on a daily basis. If the Registered Agent is not going to be at the street address provided in the Articles of Organization during normal business hours, this can expose your LLC to risk. In most states, it is a requirement to “continuously maintain” a Registered Agent and that Registered Agent needs to be available during business hours if a legal document needs to be served on the company.
If a legal or court document needs to be served upon your LLC, but your Registered Agent cannot be reached, the court is only required to make a valid effort. If you or your agent cannot be reached the case can and will proceed in your absence.
If you, your friends or relatives, or your accountant don’t have an address in the state you are filing in, then you will need to hire a Commercial Registered Agent.
A Commercial Registered Agent is a company that specializes in receiving any Service of Process documents on behalf of a business. They can charge as much as $100-$400 per year. Once hired, they will receive Service of Process on behalf of your LLC and then forward them to you by mail (or email) to whatever address you prefer. This amounts to a rather expensive middleman who does little more than give you use of their mailing address, with some occasional mail forwarding thrown in.
A word about Privacy
The owner of the LLC should understand that the name and address of the Registered Agent will be listed publicly with the states Secretary of State’s Office. This information is included in the “Articles of Organization” that the LLC files with the State and is therefore in the public record.
Using someone else’s name and address will help keep your name off that public record, but it’s not a sure thing. Several states require not only the Registered Agents name and address, but the names and addresses of the LLC’s members and manager as well. If this is the case, using a Commercial Registered Agent for privacy reasons is no longer viable.
Note: Registered Agents are not locked in. They can be changed at any time by contacting your state's Secretary of State office, filling out a simple form, and paying a small fee.
WARNING
Beware of LLC formation companies. These are companies that offer to set up your LLC for you, usually charging what sounds like a small fee for taking care of all the paperwork and filing it with your chosen state. You are often asked to fill out a simple “worksheet” that they will use to complete the necessary forms and get you registered. Somewhere in that process, usually in the fine print of the payment paperwork, they quietly make themselves your Registered Agent. A year later you discover this when they bill your credit card for the yearly fee from the state as well as their own outrageous fee for filing your Annual Report. (Something you can easily do yourself for free.) If you do use one of these services make sure it’s you, or whomever you have chosen, who is named as the Registered Agent.
Phone Numbers.
Most States will require a Business Phone Number.
With email now the number one form of business communication most authors balk at giving anyone a phone number. The main reason is Robocalls. Everyone gets them and they can range from mildly annoying to destroy-your-day distracting. They can lead to you ignoring your phone, constantly full voicemail inboxes, and even a lack of communication among your own people. Blocking these calls still requires your time and the distraction can upset even the most productive of days.
Yet the state requires you to have contact information on file, and unfortunately, that includes a phone number.
The state will do nothing about the robocalls that come with that number. So how can you avoid them right from the start?
Rather than using your home telephone number or your cell phone, your LLC can utilize a virtual business number. This a phone number used specifically for your LLC and nothing else. You can set this virtual business phone number up to forward to your cell phone, go through voice prompts, direct the caller to your email, or configure it any way you’d like.
Companies such as Phone.com offer packages for as little as $9.99/month. This may sound expensive, but if you factor in the time it takes to deal with these types of calls, and then apply your hourly rate to that number, it may be quite a bit cheaper to do so. That fee is also a business expense and therefore a write-off on your taxes, further reducing the costs.
A business phone number for your LLC can be used on every form and government database we will discuss in this section. This works to keep your actual number private and having to appear on any “public record” websites.
Conclusion
If you’ve researched your state’s requirements, determined who your Registered Agent is, where your Registered Office will be located, and how you plan to handle phone calls, it’s time to talk about who is going to manage your LLC.
