Does it make sense to use a registered agent for your LLC?

Question

Hi everyone,

I am attempting to setup my first LLC for my first flip (in Georgia).  In looking up the process I was presented with the option of using a registered agent for the LLC records.  My understanding is this would provide flexibility (can choose states that I don't live in), privacy (don't need to have my name and home address included in LLC records), and convenience (I guess these services send updates about deadlines, etc.).  What do most of the more experienced investors here do?  Is it worth the extra $120 or so a year to make use of a registered agent?  Thanks.

Matthew Kreitzer · Answer

There are some definite legal advantages of having a registered agent other than yourself weed through these legal papers. Generally speaking, big agencies that act as Registered Agents have very specific policies in place for dealing with legal paperworks that come through the mail. Losing a paper could spell disaster for your company, and having the extra layer of RA protection could save you from a gigantic headache down the line. From a CYA perspective, I think registered agents are amazing.

NOTE: Subject to change based on local rules and procedure. Consult local attorney for more information. Not legal advice, merely intended as generic educational information that should NOT be acted upon.

Richard Balsam · Answer

I don't think the tax benefits have anything to do with with the registered agent address - just where the LLC is located for income purposes.  As for anonymity - you are right - just like I do not have my own address listed anywhere- I have a mailbox store address for this reason. But- assuming a tenant is smart enough to know where to look and how to look at a secretary of state web address to look up registered agents...(a rare feat!) I have not experienced anyone driving by my house - even those that I evict and foreclose upon. If someone wanted- they could find where we all live. If they couldn't - they could hire a private detective - they would find each of us very quickly anyway. Almost every LLC has a registered agent with their address shown on the web site. Of course- there will always be others that disagree - just like those that feel a Trust would protect them...just ask any good lawyer!

Richard Balsam · Answer

In a word...no. I have four LLC's for the last 13 years. I am the registered agent. I had my attorney be the agent when I started - and he never had to do anything! So- when I made the switch ( you do that when you pay the annual registration fee to the state) I have noticed...nothing. I don't get any "official" mail that I know of - just property tax bills from each county, and the annual registration post card from the state. My personal address is listed - but it shows me as a registered agent- not as the "owner" of the company ( Yes...I am officially a "Member" of each company. Certainly not worth the $120+ fee for others to be the agent.

Nick Brubaker · Answer

Thanks Eamonn!

Eamonn McElroy · Answer

@Nick Brubaker

Every GA LLC must have a registered agent on file for service of process.  The registered agent must be physically located in GA.

It seems the company you're using to set up the LLC is giving you the option of using them as your registered agent.

You can be your own registered agent.  If you want to keep your home address harder to find (nothing's really anonymous in 2019), you can use a PO box or UPS box for the address.  If you use a PO box, use street indexing format.

"Furthermore, I wonder if there would be tax benefits by having the address of the LLC or S-Corporation located in a state with lower taxes."

Nope, you're still a resident of GA.  Substance over form.  All you're doing is adding complexity and overhead cost.

Edit: Notice your OP was 3 years ago.  Hopefully this helps someone else in the future.

Chris Das · Answer

Being a Registered Agent in Delaware, my answer is going to be somewhat biased, but I'll try to remain as objective as possible.

The short answer is "Yes". Remember that while Registered Agent services may appear to be an expense you can do without, the trade-off is possibly missing tax deadlines, not being available during standard business hours - to receive important documents that you may be served (such as service of process), important government mail etc. This will, ultimately, cost you more money and stress than if you had used a registered agent in the first place.

Chris

Nick Brubaker · Answer

Thanks @Richard Balsam.  Yeah, I do think that is the consensus.  That said, I was told just now by a CPA that one of her client's uses a registered agent service so that his tenants can't easily look up where he exactly he lives - which is interesting.  I'm not sure if the anonymity offers more liability protection as well.  Furthermore, I wonder if there would be tax benefits by having the address of the LLC or S-Corporation located in a state with lower taxes.

Does it make sense to use a registered agent for your LLC?

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