What Is an LLC?

Are you wondering, "Can you be your own registered agent for an LLC?" An LLC, or limited liability company, is a type of business structure that can protect owners' personal assets from company debts and obligations as well as provide beneficial tax status such as pass-through taxation as well as providing for numerous tax deductions. Additionally, the highest percentage of tax audits are performed on persons who use a Schedule C for tax purposes, so an  LLC can prevent this potential tax complication.

Basic Steps of Forming an LLC

When forming an LLC, you will be required to go through several steps to achieve recognition as a limited liability corporation. When forming you will need to:

  • File your articles of organization.
  • Pay the filing fee.
  • Draft an Operating Agreement detailing how the business will run.
  • Publish a notice of your intent to form an LLC.
  • Obtain any permits or license you will need to run your business.
  • Designate a registered agent for the LLC.

What Is a Registered Agent?

A registered agent is a designated third-party that resides in the state where the business LLC formation is being filed, and they will be responsible for receiving any and all correspondence and notices such as process notices, Secretary of State correspondence, and government notifications on behalf of the limited liability corporation. Most states will require a registered agent to complete the formation of an LLC, and even in states that don't require it, it is a recommended step.

The agent will act as your business contact for the state and any processing bodies, and it can be anyone including an owner, an employee, or an outside service hired primarily for that role. A registered agent can be significantly important to companies that are not based in the state where they are doing business as there must be an in-state contract for legal purposes.

Why Do States Require Business Entities to Have Registered Agents?

The organization of a registered agent started with the necessity of due process. Lawsuits and legal actions cannot move forward until a business or entity has been properly notified. Without a physical address and established point of contact, notification can become difficult.

What Does a Registered Agent Do?

A registered agent is not only responsible for being the primary point of contact for an LLC in the event of a legal process, but they will also be responsible for maintaining an accurate record of your company's information that will be relevant to your business operation.

What Are the Benefits of Having a Registered Agent?

While having a registered agent is required in many states to form an LLC, there are other benefits to having a registered agent. 

  • A registered agent can create a legal separation between the business and the owner.
  • They can accept physical documents so you can use a P.O. box for your business address.
  • You can have an agent in each state that you do business in.
  • They often provide services such as reminding you when annual reports and other operations are required to help your business maintain compliance.
  • A good registered agent will help promote and maintain your LLC's reputation.
  • You will have someone to handle any legal documents without them being served in front of customers or associates.
  • You can easily change your business address without having to refile paperwork as the registered agent's address will be on the formation paperwork.
  • You will lower the risk of losing a lawsuit by default.
  • Agent services will know the ins and outs of business requirements in other jurisdiction, saving you the time and money to find them out.
  • With the registered agent being the address on public record, you may limit your exposure to advertisers and marketers that will continually offer specials and services.
  • A registered agent will maintain regular hours so you will not be required to be in the office all day or hire a full-time employee to make sure your business has someone there to accept legal documents.
  • A registered agent will help keep all of your business documents organized and in one place so that you can retrieve them whenever necessary and don't have the headache of maintaining them yourself.

If you need help with determining if you can be your own registered agent for an LLC, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.