According to the Texas Business Organizations Code (“BOC”), LLCs and corporations should elect a registered agent. This registered agent is an intermediary between the state and the business, tasked with receiving official documents. These can be tax notices, compliance documents, or service of process. And the timely receipt and forwarding of these documents are crucial to your business operation.
So, can you take up this role, and if so, what should you know about it?
Who Can Be a Registered Agent?
While the registered agent requirements differ by state, the following factors hold where registered agents are necessary:
- The agent should be at least 18 years old. In the case of companies, the companies should have incorporation in the said state,
- The agent should have a physical address in the state where they will operate. This address comes in handy in delivering documents, as the agent will receive the physical copies in person. As such, P.O. Box addresses are not acceptable as addresses,
- The agent should be available during regular office hours to receive official correspondence, and
- The agent should be a resident of the state where the business will operate.
Anyone who meets these requirements can be a registered agent in the given state.
Can You Be a Registered Agent for Your Business?
You may have read the above requirements and realized you can check every box. So, can you represent yourself? Yes! But before you do so, please consider the following scenarios:
Pros of Self-Representation
Most business owners enjoy maintaining a high degree of control over their business operations. And receiving mail may feel like just another task to add to your to-do list. Let’s look at the benefit of taking on this crucial role: Control. You will be in charge of receiving and processing your mail. And that can cement the control you wish to exercise over the business.
But what are you willing to give up so you can have control? You may wonder what we mean by this. We review the downsides of self-representation to give you a glimpse into the challenges.
Cons of Self-Representation
How can representing yourself go wrong?
- Need for Constant Availability: A registered agent should be at the office to receive mail during regular office hours. And that means your office must always have someone present to receive the mail. That may work for big setups which feature messengers, tens of assistants, and scores of managers. But for small businesses, this does not work as you may not always have someone physically present at the address.
- Lack of Confidentiality: If your business ever receives service of process, it will be in the full glare of employees and clients. And that can send the wrong message about your business. It may even cause a scare if your business already has other legal issues in the offing.
- Lack of Privacy: If you work from home, receiving mail to your home is not ideal. Moreover, you would need to list your physical address in public records, giving people information on how to find you.
- Extra Time Expenditure: When you take on the role of registered agent, you will need to receive and process the mail. Or you would need to hire someone to ensure the mail gets handled promptly. You can use that time to cater to the more integral business operations.
Acting as your registered agent may have the benefit of control but its downsides outweigh this perk. The alternative? It’s best to hire a professional registered agent to address these challenges.