Being your own Registered Agent is a great way to save money – as long as you meet the state requirements.
That said, there are some risks of being a Registered Agent for your LLC. They aren’t likely to occur, but if they do, you could lose your liability protection.
Most of the risks of being a Registered Agent are related to missing important legal documents and notices from the state.
We’ll explain the risks of being a Registered Agent so you can make the best decision for your LLC.
What are the duties of a Registered Agent?
A Registered Agent is responsible for receiving state notices and important legal documents on behalf of your LLC.
When you become the Registered Agent for your LLC, you are responsible for receiving your own documents. This means you must be present during normal business hours at a physical address in the state where the LLC is formed.
If you aren’t present, you could miss the delivery of state notices and important legal documents.
Missing an important notice from the state
It’s very important that your business promptly receives all important notices sent by the Secretary of State or any other state agency.
Notices sent by state agencies often have actions that your LLC must take by a certain deadline. And in some cases, there are penalties and fees if you miss those deadlines.
If a Registered Agent misses state notices:
- your LLC could lose its good standing status, and
- the state can shut down your LLC (called administrative dissolution).
Losing good standing status
When you file your LLC’s Annual Report and pay the necessary fees each year, the Secretary of State marks your LLC as being in Good Standing. This is the default status for LLCs.
If you don’t file your LLC’s Annual Report and pay the necessary fees each year, the Secretary of State will take away your LLC’s Good Standing status. Then they’ll mark your LLC as being Delinquent.
This can happen if your Registered Agent isn’t reliable. For example, if you travel a lot or don’t check your mail frequently, you may miss a notice from the Secretary of State letting you know that your Annual Report is due.
Administrative dissolution
Once your LLC is marked as Delinquent, you usually have 30-60 days to file your Annual Report late and pay the filing fees (plus any late fees).
If you fail to file your Annual Report during this 30-60 day window, then the Secretary of State can shut down your LLC. This is called Administrative Dissolution.
Said another way, no one is physically coming down to your business address to shut you down. That said, you may not be able to renew your business licenses or permits, or get certain contracts.
Missing the delivery of Service of Process
A Registered Agent’s job is to accept state notices and legal documents on behalf of your LLC. The delivery of legal documents is called Service of Process.
Examples of these types of documents include:
- notice of a lawsuit
- subpoena (a demand for documents or testimony)
- summons (requires your attendance at a hearing)
- complaint (the filing that starts a lawsuit)
- writ (requires or prohibits some action)
Service of Process can be delivered by certified mail, or in person.
And people who deliver Service of Process are called Process Servers.
If a Process Server is unsuccessful in reaching your LLC’s Registered Agent about a lawsuit (they’ll try a few times), a court case can proceed in your absence and you might not even know about it.
Worse, the court could enter a default judgment against your LLC if you aren’t there to defend yourself.
A default judgment is when the court or judge rules against one party because they failed to appear in court or respond to served documents.
Why might a Process Server be unable to reach my Registered Agent?
A Process Server might not be able to reach your LLC’s Registered Agent include if you/they:
- move and forget to update your address with the state
- travel or leave town for extended periods of time
- don’t have a reliable physical address
- don’t keep up with your mail
- aren’t available during regular business hours to accept Service of Process
For example, if your spouse is the Registered Agent, you’ll likely go on vacation together. This means that while you’re gone, no one will be available to accept any Service of Process or state notices that may arrive. That said, going on vacation for a week once or twice per year probably won’t be a big deal because the time frame is so small.
However, if you’re concerned about missing a notice or important legal document for any of the reasons listed above, you may want to hire a Registered Agent Service instead.
If you need to hire a Registered Agent, we recommend Northwest Registered Agent ($125 per year). Northwest has been in business for over 20 years, and they have excellent customer support.
And if you hire them to form your LLC, they’ll also let you use their business address throughout your entire LLC formation paperwork. This helps keep your address off public records.
Special offer: Hire Northwest to form your LLC ($39 + state fee), and you'll get a free year of Registered Agent service.
(Why is Northwest the best? Read our Northwest Registered Agent review)
Risks of Being Your Own Registered Agent FAQs
What are the risks of being a Registered Agent for a friend or family member’s LLC?
The risks of being a Registered Agent for your friend or family member’s LLC are the same risks as being your own Registered Agent.
By agreeing to be the Registered Agent, you’re accepting legal duties:
- to be present at the Registered Agent address during normal business hours
- to receive state notices
- to sign for Service of Process (if it arrives)
- to forward any state notices or legal mail that arrives within a timely manner.
If you fail in these duties, your friend or family member may pursue legal action against you.
That said, if the LLC itself gets sued, you aren’t liable for that lawsuit.
Can a Registered Agent be held liable?
No, Registered Agents aren’t liable for any of the LLC’s lawsuits or debts.
Accepting documents on behalf of the LLC doesn’t bring Registered Agents into a lawsuit.
If you are the Registered Agent and someone sues your LLC, they are still only suing the business. The Registered Agent doesn’t get sued.
That’s true even if you are the Registered Agent and the owner of the LLC.
And only the LLC gets sued – not you, as the individual owner. That’s because an LLC protects your personal assets.
Who can be a Registered Agent for an LLC?
You typically have 3 options for who can be the Registered Agent for your LLC:
- you (the LLC owner)
- a friend or family member, or
- you can hire a Registered Agent Service
In order to be a Registered Agent, you must meet the Registered Agent requirements.
Can I be my own Registered Agent?
Yes, you can be your own Registered Agent. In fact, it’s a great way to save money. You’ll just have to be sure you meet the state’s requirements.
For more information, please read Can I be my own Registered Agent?
Where do I list myself as the Registered Agent?
The name and address of the Registered Agent goes in the LLC Articles of Organization.
The Articles of Organization is the document that, once filed with the Secretary of State, officially creates your LLC.
Every state requires an LLC to list a Registered Agent and Registered Office (the Registered Agent’s address). This information goes on public record, so that a Process Server, if needed, can serve your LLC.
What are the pros and cons of being my own Registered Agent?
The main pro of being your own Registered Agent is saving money.
You’ll also receive state notices and any legal documents directly at your home or business address (instead of having to retrieve them from an online dashboard).
The cons include having your address on public record, and having to be at a set address during normal business hours in case Service of Process arrives.
Additionally, if you receive Service of Process at your own address, it could arrive in front of neighbors or clients, which can be embarrassing.
How do I choose a Registered Agent?
Choosing the right Registered Agent for your LLC depends on your specific business needs.
We’ll guide you through your options and how to choose a Registered Agent, so you can confidently pick the best one for your LLC.
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.