Registered agent services: DIY or do not try?
The adage, “you have to have money to make money” really hits home when you are reviewing the budget needed to launch a business. Starting a business is expensive, and we understand that many of the entrepreneurs and businesspeople that we represent are trying to “bootstrap it,” especially at the outset of a new venture. Saving money is always on the entrepreneur’s mind, and every dollar counts. The annual fee for a registered agent averages about $250, and since most people don’t understand the value of registered agent services, this is one expense that entrepreneurs are tempted to save by doing it themselves. In this post, I’d like to talk about why that $250 can save you more than $250 worth of time, money, and grief in the future.
What exactly is a registered agent? It is a person or entity that is legally responsible for accepting notices and service of process from governmental agencies, courts of law, and anyone else that wants to formally notify your company of something. When state annual reports and franchise taxes are due, when a municipality has a complaint against your business, or when Linda Llamahater sues your business because your llama spit at her (that doesn’t usually happen, by the way – llamas need better PR), your registered agent receives the notice or summons on your behalf, and forwards it on to you. Every state requires business entities that are formed or qualified to do business in the state to have a registered agent at a registered office physically present within the state.
Sounds easy, right? You could do that yourself and save a few bucks every year. But what if. . .
- You don’t want your home address to be public knowledge (P.O. boxes are generally not permitted)?
- You end up moving?
- You want to form or qualify your business entity in a state where you don’t reside?
- You don’t have a staffed office or a constant presence at the registered office address?
- You are just not an organized, every-paper-is-reviewed-when-it-is-received kind of person?
- You have family members with a stubborn tendency to throw away mail that they don’t recognize?
Most people fall into at least one of these categories, and if a notice is missed or a lawsuit not responded to, that generally costs a good deal more than $250 to rectify. In other words, while we understand that it’s tempting, registered agent services are not a great place to economize, when you compare the benefit to the potential costs and hassles.
goodcounsel does not provide registered agent services; however, we have partnered with one of the leading national providers of these services, and negotiated a discounted rate that our clients can take advantage of. We’ll work with whatever agent you select, but many clients find this to be a worthwhile option.
If you have any questions, goodcounsel will be happy to help you determine what is best for you or your business.