- What?
(cat meows loudly)
Meow, what?
Wanna come up here?
What, wanna say hi to everyone?
Come here, honey.
Someone was down there meowing at me
while I was getting ready to do this.
Do you wanna say hi to the people?
Or are you mad at me?
You wanna say hi to everyone, hi, Bird.
Hi, hi, everyone.
I'm business and branding attorney, Aiden Durham,
with 180 Law Co. in Colorado.
This is little Bird.
And welcome back to All Up In Yo' Business.
(upbeat music)
Okay, you had enough?
Okay, okay, bye, Bird.
Well, thank you, little Bird,
for joining us for a moment there.
And thank you for joining me
for another episode of All Up In Yo' Business.
If this is your first time on my channel, welcome.
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Today we're gonna talk about registered agents
and specifically registered agents
in the case of a single-member LLC.
If you've watched any of my other videos
about single-member LLCs
or avoiding the risks of a single-member LLC,
you know that one of the big principles
of limited liability protection
and avoiding piercing the corporate veil is separateness,
keeping a separateness between you
as the owner single-member and the LLC itself.
This comes into play with things
like having separate bank accounts
for your business and your personal,
not commingling funds or commingling assets,
and following certain legal formalities
that sometimes feel kind of silly in a single-member LLC
but are nonetheless quite important.
And so when we're talking about that separateness,
the question often comes up of,
"Well, just how separate does this need to be?"
For example, is it not separate enough
if I as a single-member LLC
or as the member am also the registered agent
for the single-member LLC?
In other words, is it bad?
Or do you put yourself at risk
if you are the member of the LLC and the registered agent?
In case you don't already know,
the registered agent is the person or entity
that's appointed to accept service of process
on behalf of an entity like an LLC.
Every state requires that if you've registered an LLC
or a corporation in that state,
you must have a registered agent with a physical address
or a physical location in that state.
There's really no way around it, no exceptions.
If you've formed a company in a state,
you will need a registered agent in that state.
And so if the LLC is sued
or has any kind of legal proceedings going on,
the registered agent will be the one
to accept those documents,
that service of process on behalf of the company.
The registered agent in itself,
solely by virtue of being the registered agent doesn't have
any other interest in the company.
Being the registered agent doesn't mean
you are also an owner of the company.
It doesn't mean you're a manager of the company.
It doesn't mean you have any say whatsoever
in what the company does.
You are solely the registered agent,
and that is, the sole role is to accept legal documents,
service of process on behalf of the company.
But does that mean that you can't also be a member
and the registered agent?
No, not necessarily.
Of course, it's going to depend
on your state's requirements.
Each state is going to be a little different.
But for the most part, most states only require
that the registered agent be 18 years of age or older
if it's a person, a living individual person.
They have to have a physical location in that state.
And of course, they have to consent
to being the registered agent.
You can't just say,
"Uh, this person's gonna be my registered agent
even though they don't know about it."
No, the person or the company has to consent to doing so.
For the most part, though,
as far as I'm aware at least,
there are no states that prohibit a member or a manager
from being the registered agent for their own company.
Some states, in fact, such as Colorado permit the company,
the LLC to be its own registered agent.
Not every state permits that.
Some do, but in many instances,
the company itself can be its own registered agent.
But so if you are a single-member LLC
or forming a single-member LLC
and you're doing it in the state that you live in
where you are physically located,
often it makes most sense.
Well, why don't I just be my own registered agent
rather than having to maybe pay a registered agent company
or find someone else to do it?
Why can't I do it?
And really the simple answer is,
you can be your own registered agent
if you're a single-member LLC.
That on its own,
the fact that you as the single-member LLC are also acting
as the registered agent for the LLC,
that fact on its own is really not gonna do anything
to put at risk your liability
or the limited liability protection
that you get from the LLC.
There are a number of factors that a court will look at
if the question of piercing the corporate veil comes up
to determine if there is an alter ego
between the company and the member or the members.
Really, none of those factors have anything to do
with registered agents.
So again, that in itself,
you being your own registered agent in itself
really isn't going to put you at any risk.
Of course, though, if you're doing all these other things
that you shouldn't be doing,
like you are putting all your business funds
and business income into your personal account,
if you're not keeping things separate,
if you're commingling funds,
if you're not following corporate formalities,
if you're trying to use the LLC
to avoid otherwise legitimate liabilities
or debts or claims,
if all of those other things
or some of those other things are happening, then sure.
Maybe the fact that you're also the LLC's registered agent
might be another factor that can go into that.
But if you're doing everything right, then no.
The fact that you're the registered agent isn't going
to increase your risk of liability
or of piercing the corporate veil.
Does that mean we should all be our own registered agent?
No, of course, it doesn't.
There are plenty of instances
where we as the single-member wouldn't want
to be our own registered agent.
It could be, for instance,
if we are working from home,
if we run our business out of our home
and that is where we are physically located,
if we then want to act as our own registered agent,
our home address would be the registered agent's address.
And the registered agent information
in every state is going to be publicly available.
People can look up your LLC info
and see the name and address of your registered agent.
So if you don't want your home address publicly available
as the registered agent,
that might be a reason to not be your own registered agent
and instead use maybe a registered agent service.
Or maybe you don't mind using your home address
but you've got some nosy neighbors
or you've got kids or roommates or other people in your home
who may not want to have to deal
with a process server coming up to your door.
If you were to get sued,
if the LLC was to be sued,
someone would knock on your door, if that's the address,
and would serve you with court papers.
Your neighbor might see that happening.
Friends might see that happening.
It could, I don't know, be embarrassing.
If you think that's an embarrassing thing.
It just means, in my opinion,
that you're doing business and someone might be mad at you.
It's not always a bad thing to be involved
in a legal dispute.
I mean, it's not fun.
Anyway, that might be a situation
where you don't want to be your own registered agent
or if you're not going to be home for the most part
during regular business hours.
'Cause, again, the purpose
of the registered agent is to accept service of process
on behalf of the LLC.
If the registered agent isn't there,
then they can't be served.
There are other avenues that can be addressed potentially.
But if no one's there during the day at that address,
you risk missing that delivery of those important documents,
and you could potentially put yourself at risk
for other legal issues.
So those are some reasons why you may not want
to be your own registered agent for your single-member LLC.
But for the most part, if those things don't apply to you,
if you don't mind using your home address,
if you're gonna be home during the day
for the most part at that address,
and you don't wanna spend the additional money
on maybe a corporate registered agent service,
it's perfectly fine.
But if you're nervous about it,
if you wanna keep your info private,
or just don't wanna be your own registered agent,
then the best option is to work
with a reputable nationwide registered agent service.
And I will link to a few
of my favorite registered agent services
in the description as well
if you're trying to figure out which one's best for you.
That's all for this episode, folks.
If you learned a thing or two,
go ahead and give me a thumbs-up
and maybe drop a comment below.
And again, don't forget to subscribe,
hit that little notification bell,
and check the description for links
to additional information and resources.
Thank you all so much for watching.
I'm Aiden Durham, and I'll see you next time.
(upbeat music)