If you’re running a business that requires a registered agent, you might be tempted to take on the responsibility yourself. At first glance, being a registered agent seems simple, since you’re really tasked with monitoring the mail and receiving state correspondence for your business.
But this position comes with significant responsibility, and if you make mistakes, you could land your business in financial or legal trouble – or both.
Before you decide to be your own registered agent, it’s important to understand just what’s involved and what you’ll need to do to position yourself for success.
What is a Registered Agent?
If you decide to operate your business as an LLC or a corporation, you’ll need a registered agent. The registered agent helps to connect your business and the state and is responsible for accepting state documents on behalf of the business and ensuring that the business stays compliant with the state law. Some businesses choose a third-party business to act as a registered agent, but it’s also possible to be your own registered agent, as long as you follow some specific requirements. There are pros and cons to being your own registered agent, though, so it’s important to make sure that this is the right choice for both you and your business.
The Basics of Being Your Own Registered Agent
To become your own registered agent, you’ll need to meet some strict requirements. The following steps can guide you through the process.
1. Carefully Consider the Pros and Cons
Becoming your own registered agent might seem ideal, but there are several pros and cons that you should consider.
As a registered agent, you’ll need to publish the physical street address where your business operates. If this is your home, then your home address will be public.
You’ll also need to receive state documents and correspondence at that address, including being served in the case of a lawsuit. If you’re operating out of a business, then your staff will see you be served with these documents.
You’ll also need to be available during normal business hours, year-round. If you often take vacations or have a flexible schedule, this commitment will be difficult.
Many businesses use registered agent services for these reasons. While these services do cost money, they are more convenient and can be more thorough than you may be while balancing your normal work responsibilities with the commitment of being a registered agent. Using a professional service can help to ensure that documents and correspondence aren’t missed, and that your business stays fully compliant with the law.
Becoming a registered agent can potentially save your business money, but it’s important to weigh the pros and cons of this choice. This decision isn’t right for everyone and every business. If you feel that it’s the right choice for you, the following steps can help you to move forward with the process.
2. Determine Your Business Address
As a registered agent, you’ll need to have a physical address that’s within the state where your company operates. This address cannot be a post office box or a private mail service.
You’ll need to provide the physical address of a brick and mortar location where you can receive mail or where you can accept service of process.
In the case of a web-based business or a smaller business that you operate from home, your business address may be your home address. This is acceptable, but your home address may be provided to the public. You might be served with legal documents at your home, and you’ll likely receive increased amounts of junk mail. You might also have security concerns about your address being publicly attached to the business.
Put careful thought into the business address that is best to use. If you’ve been working out of the home but have been considering getting office space, this might be the time to make that transition so you have a business address that isn’t your home.
Keep in mind that every time you change your business address, you’ll need to notify the state of the address change. There’s usually a fee associated with address changes, and completing the required paperwork can also be time-consuming. For these reasons, it’s best to try to keep address changes to a minimum.
3. Determine an Appropriate Schedule
Another requirement of being a registered agent is that you need to have regular business hours at your business address year-round. This is for the purposes of accepting mail and service of process in the event of a lawsuit.
If you have a small business or a home-based business and don’t have additional staff, it can be difficult to ensure that the business is staffed during working hours year-round. Carefully plan your schedule and make sure that you’re ready for this commitment. Consider what you’ll do about coverage during vacations and plan out how you’ll manage this type of schedule.
4. Designate Registered Agents in Every State
If your business operates in multiple states, you’ll need to have a registered agent in every state. This can be challenging if you’re not yet operating a brick-and-mortar business in every state you operate in, and it might warrant hiring a registered agent service in some or all of those states.
While you may work as a registered agent in your state, before you make that decision to move forward, be sure that you have a plan to provide registered agents for the other states.
5. Get Organized
As a registered agent, you’re responsible for receiving notices and ensuring that they get proper attention from your business. You’re also responsible for accepting service of process.
Focus on ways that you can ensure you’re organized and you don’t miss any important mail. This might mean developing mail handling procedures for your team, ensuring you check your mailbox daily, or even taking over the mail handling duties, yourself.
Mail isn’t always recognizable, and it’s important to promptly receive any state correspondence. Develop a procedure so that all mail is opened and read daily.
6. Create an Action Plan
To ensure that all of the notices you receive are handled appropriately, work with your employees and business managers to develop an action plan. Put some steps in place so that if you receive state correspondence that requires action, you know who to connect with, how to initiate the appropriate response, and how to follow up to verify that appropriate action has been taken.
The follow-up phase is particularly important, especially if the correspondence requires someone else in the business to take some sort of action. Even though this action might not be your responsibility, you still need to monitor the progress and verify that the action is completed by your deadline. Consider using calendars, checklists, automated reminders, and any other tools that can help ensure you don’t miss anything important and are able to see the process through to completion.
7. Review Any Additional State Requirements
The above requirements to become a registered agent are somewhat general and widely applied, but every state has its own rules and regulations. Be sure to research your state’s specific requirements to make sure that you’ll qualify as a registered agent.
8. File a Statement of Change
If you’re already using a registered agent and want to become your own agent, then your business will need to file a Statement of Change with your state. Filing fees and processing times can vary.
If you’re starting a new LLC or incorporating your business, you’ll need to identify yourself as the registered agent when you file the paperwork.
3 Tools to Improve Being Your Own Registered Agent
Being a registered agent is full of challenges, and something as simple as an overlooked notice could result in legal and financial consequences for your business. These three tools can make your job easier and help ensure that you don’t overlook anything important.
monday.com
monday.com is a workflow management program that can help to keep you and your entire team working together smoothly. With monday.com, you can ensure that everyone takes appropriate action after you’ve received important correspondence from the state.
You can use monday.com to assign tasks and deadlines to your team members, and then you can see at a glance whether they’ve completed those tasks or not. All of your team members using monday.com will see the tasks and deadlines, and will be able to provide updates right through the system, keeping everyone updated. You can access the platform on your phone, so you always have the latest updates and can keep your business progressing.
Ring Video Doorbell
If you work out of your home, it’s essential that you are available to receive correspondence and deliveries during normal business hours. Using the Ring Video Doorbell can help ensure you never miss a delivery or visitor who comes to your house. It’s ideal if your office is located toward the back of the property or if you otherwise don’t always hear the doorbell.
This video doorbell detects motion and sends a notification right to your phone, tablet, or computer. You can then see and talk to the visitors in real time, letting them know that you’ll be right out to greet them. This might help to prevent missed deliveries or attempted deliveries of service of process.
TickTick
While a workflow management system like monday.com is a great choice for those larger tasks and to-dos, you might also want to use a personal reminder app to help ensure you don’t forget those little details and projects you’re working on each day. TickTick is an app that can help you to manage your to-dos, no matter how small or how tight the deadline is.
With TickTick, you can set reminders for everything from needing to check the mail to needing to follow up with your business owners. This app offers five calendar views to keep you on task, and notifications will remind you about those important items you can’t afford to forget.
3 Tricks for Being Your Own Registered Agent
Being a registered agent can be challenging, and mistakes can be expensive for your business. These three tricks can help you to prepare for this responsibility.
Learn How to Handle a Service of Process
There are many potential consequences for mishandling or overlooking state correspondence, but mishandling a service of process could potentially lead to a default judgment against your business in a legal case. Just in case you receive a service of process, it’s essential that you know how to properly handle it.
Familiarize yourself with the process that you’ll need to follow if you are ever served. This is an excellent question to discuss with your lawyer, who can help you to draw up a game plan – just in case.
Develop a Calendar
It’s essential that you are available during working hours throughout the entire calendar year. The exception is only for weekends and federal holidays. Establish a calendar well ahead of time and ensure that you’re available to receive correspondence during those times.
Triple-Check Your Deadlines
When you receive correspondence, you need to read it carefully and look for the essential information, including deadlines associated with the request. Consider making a photocopy of the correspondence so you can highlight it and draw on it, making notes that will help you to better understand the document.
As you identify deadlines, put them right into a calendar. It’s always wise to back up your deadlines for a few days, so you have a little extra time if something goes wrong. Then, follow up with everyone involved in the process to verify that the correct action has been completed in time.
What to Do Next
It’s important to carefully consider whether being your own registered agent is the right decision for you and your business. The money you could save might be appealing, but be honest with yourself about whether you can commit to the responsibilities that this decision brings. Mistakes and overlooked correspondence can be very expensive and carry significant consequences for your business, so it’s important to only take on this role if you’re certain that you can do it well.
Before you decide to be your own registered agent, research some registered agent services. Ask for quotes and get details about how the services operate. Their rates might surprise you, and you might find that the investment is well worth the peace of mind that working with a service will give you.
If you’re still considering which type of business operation is right for you, do some research into how an LLC and a corporation compare. It can also be helpful to research how to start an LLC, which can give you information on the other requirements that your business will need to meet. The more information you have about these business options and the requirements of being your own registered agent, the better able you’ll be to make a well-informed decision about how to handle your business.
from Quick Sprout https://ift.tt/3af1Fwp
via IFTTT
No comments:
Post a Comment