Corporations and LLCs must designate a registered agent to receive service of process on behalf of the state. You may choose to serve as your business’s registered agent or appoint a third party, including a commercial registered agent service like Northwest, or an individual—which could be a friend or family member if they meet the requirements and agree to do the job. Here are some things to consider if appointing a friend or relative as your registered agent sounds like the right option for you.
What Does a Registered Agent Do?
A registered agent (also called a statutory agent or resident agent in some states) is a person that is able to accept service of process (legal notices) and other official state mail on behalf of an LLC or corporation.
Your company can designate any individual or entity who legally qualifies to be its registered agent, as long as they consent to perform the service. However, when you appoint a registered agent, you’ll want someone who can meet the following requirements:
- Residency: A registered agent must maintain a physical address (listed on the state record) in the state where you’re doing business, often called a registered office.
- Availability: A registered agent must be present to receive service of process and other official state mail during standard business hours.
- Responsiveness: A registered agent must be able to forward any official state documents received on behalf of your business in a timely fashion.
Businesses operating in multiple states must appoint a registered agent in each state—so while a professional service with offices in each state can be your sole agent, if you choose to designate individuals as your agent, you’ll need multiple registered agents, each legally residing in a different state or jurisdiction.
Friends or Relatives as Registered Agents
Because of the cost of hiring a professional registered agent service and the mobility restrictions that serving as your own agent imposes on an individual business owner, designating a friend or relative as your company’s agent might seem like a good solution for some businesses. Here are a few potential benefits:
- Cost-effectiveness: One possible advantage of using a friend or family member as your registered agent is you might save on costs. Hiring a professional registered agent service may not be as expensive as you think (depending on the service provider and location), but you’ll still be paying something for the service. By designating a friend or family member as your registered agent, you might be able to save your company a bit off its bottom line. That said, bear in mind that your friend or relative might also prefer to charge for their services, rather than working for free.
- Flexibility: Using a friend or relative as your registered agent may give you more flexibility in terms of communication and availability. If your registered agent needs to be served with legal documents, they may be able to receive them outside of normal business hours or on weekends, or deliver them to you personally at whatever time you prefer.
- Intangibles: Dealing with someone you already know as your registered agent might be easier for some business owners, compared to working with an unfamiliar person. This is ultimately a matter of personal comfort, but it can be a valid choice for those who’d rather have someone they already know and trust tending to their legal documents.
However, it’s important that any individual serving as a registered agent understands the potential drawbacks involved. Apart from the need to maintain an office and keep ordinary business hours, there are also potential privacy concerns that must be considered. Registered agent information appears on state websites and otherwise goes on the public record. That means your friend or relatives’ name and the location of their registered office (whether that’s their home or a place of business) goes on the public record too.
Can I Be My Own Registered Agent?
Yes. A business owner is free to be their company’s registered agent (or they can appoint an employee or other member of the company’s ownership board if the individual is willing). However, the same potential drawbacks apply here too. If you serve as your business’s registered agent, you’ll need to maintain a registered office and keep standard business hours to receive service of process if the state comes calling.
Hiring a Commercial Registered Agent
A commercial agent service doesn’t need to be free to pick up kids from school or go on a long vacation. It’s just always available during the required times a registered agent needs to be. You don’t have to worry about your commercial registered agent misunderstanding its responsibilities or blowing them off, you can instead expect a certain baseline of knowledge and competence. Some commercial registered agents can provide you service in every state you do business in. And privacy is not a concern for a professional registered agent—in fact, at Northwest, protecting your privacy is one of the things we do best.
Overall, while it might be tempting to use a friend or family member as the registered agent for your business, it is often smarter to use a professional registered agent service to ensure that the business is properly represented while avoiding the limitations that can affect an individual agent.
Whether you’re ready to sign up for registered agent service today, or need time to work out the details, Northwest can help. Get a free account with Northwest to access the resources you’ll need to start and maintain your business on your own, or hire us to do it for you. No obligations.