If you are starting a business and you go through the process of forming your LLC with an online service, you will very likely be sold Registered Agency services.
However, on the face of it, a Registered Agent will feel very much like a Virtual Address. After all, it is an address, separate from that of your business, where important business-orientated documentation will be sent, (I will define in greater detail below).
However, many people using a Virtual Address for their business, do so for the same reason, (see here for an article on the benefits).
Does this mean you have two addresses for your business? Can you operate with just one? Can a registered agent pass as a virtual address?
In this article, we will answer all the above and more?
What is a Registered Agent?
Registered Agent services can be described as a 3rd party for your business. Essentially, it is a designated individual or business that is set up to represent an LLC or Corporation in the state of formation.
This is especially important in situations where you may have established an LLC in a state where you do not reside, (some states are more beneficial for tax reasons, etc).
At the time of formation, you will be asked to appoint a Registered Agent, (that’s why most LLC services offer this).
The address of the Registered Agent has to be a physical street address (not a PO Box address), and the 3rd party that has been appointed will be filed in the official documents that are held by the state, (articles of organization).
Now, this is the part where it is easy to get confused between a Registered Agent and a virtual address.
The Registered Agent will receive government documents, tax files, service of process (SOP like lawsuits, summons, or subpoenas), and any type of legal actions, on behalf of the business.
And all of this will go to the Registered Agent address on file with the state.
When you use a registered agent service, only state documents can be sent to that address. It cannot be used for general business correspondence such as invoices, on your letterhead, or as a contact address for your customers.
Another point to note is that the registered agent’s address will be in the public record. It can be looked up by anyone that takes an interest to do so.
A REGISTERED AGENT SERVICE:
- Receives official government documents on behalf of an LLC or Corporation
- Will send reminders for complying with state business rules and regulations
- Will file important documents such as annual reports
- Will forward notices and documents and send the business owner reminders
- Keeps copies of important business documents
So what is a Virtual Address?
A virtual address can be rented from a CMRA (commercial mail receiving agent) and be used for all aspects of your business.
In essence, you can use a virtual address to portray the actual location of your enterprise. A lot of businesses will do this for a more professional image by using a prestigious street address rather than say, their home address.
A virtual address helps with privacy issues too, as it stops your home address from being made public to your customers and clients.
Head here for more information on the benefits of virtual addresses, and differences from other services (such as a P.O Box).
Q. What’s the difference between a registered agent address and a virtual address?
The biggest difference is the one mentioned above. An address provided by a registered agent can only be used for state-sent documentation. A virtual address (as long as it is not a P.O Box address), can be used for all aspects of your business.
Q. Can a virtual address be used instead of a Registered Agent?
Theoretically yes, but it is not advised. A registered agent serves an important role, (see key takeaways above).
To keep on top of all the important documentation and notices that come from the state it is recommended practice to utilize a registered agent service.
Q. Can I take care of the registered agent duties myself?
Yes, you can. The same issues apply in terms of the responsibility is completely on you to manage the relevant state documentation etc.
In a situation where you elect yourself as your own registered agent, your business address (virtual or otherwise) and registered agent address will be the same.
Q. Who can act as a registered agent?
You can nominate all manner of persons to be registered agents. You yourself, a friend, neighbor, family member, virtual address, and of course an established registered agent service.
There is a good reason why registered agent services exist. They help business owners ensure that the important, legal requirements of a business in terms of documentation, paperwork, and filings are adhered to.
Yes, you can use a virtual address as the contact point with your state of formation, however, you will have to take care of the registered agent responsibilities in one way or another from that address.
This could be by yourself or a nominated individual. Whichever way you decide to do it, you have to make sure it is done properly, otherwise, you could see your business get into trouble.
I’m a 25 year veteran of USPS. I’m retired now, but as the editor of Mailbox Master, I can’t quite remove myself from the carrier industry just yet. 🙂