No matter where you’re starting your business, there’s a good chance that if you’re forming an LLC or corporation, the state will require you to have a registered agent. That’s especially true if you’re in the state of California. California law requires you to appoint a registered agent so that the state government has a consistent and reliable contact person for your LLC.
In short, that means you can’t officially form your brand new business (see our guide on forming an LLC in California) without filling this position.
So what is a registered agent exactly? It’s typically a person or business who is authorized to accept official government notices and service of process notices on behalf of the LLC (this can include everything from lawsuit papers to important notices and subpoenas).
Whether you're looking to start a new business in California or you want to expand your business to the state of California, here’s everything you should know about appointing a registered agent, what they do, and why you need one.
What does a registered agent do?
A California registered agent accepts tax and legal documents on behalf of your business, making sure you don't miss important information regarding tax payments and compliance information. Registered agents are also responsible for accepting service of process. That is, if your LLC should be sued, your registered agent will accept the legal summons on your LLC’s behalf.
Consider this scenario: When someone wants to serve process against a company notifying them of a lawsuit, for example, they do this in person. So, serving a notice against a business would mean going to the office of the registered agent and presenting the document. The registered agent then sends an email to the business, with a copy of the document.
While this doesn't sound like a big job, it's important that businesses are notified of impending legal actions as quickly as possible. That’s why most registered agents are required by the state to be available and accessible during all business hours year-round (that means the normal 9-5 and Monday through Friday).
Who can be a registered agent in California?
In California, there are two main criteria for registered agents. First, the registered agent must be a California resident with a physical address in California (not a PO box or mail service).
Alternatively, your registered agent can be a business entity. It just needs to fulfill one major requirement: The registered agent must be an LLC or corporation that is licensed to operate in California.
Whatever route you choose, it’s vital your registered agent has an address where a person is available during regular business hours to physically receive the mail. This ensures the legal documents can be tracked, and it ensures that all important information is received by the business owner.
Can you be your own registered agent in California?
You can be your own business’ agent of process, as can any adult who is a California resident, but your corporation can’t be its own agent. However, as a registered agent, you’ll be required to maintain normal business hours and always be available to accept hand-delivered service of process.
But just because you can be your own registered agent, doesn’t mean it’s necessarily recommended. Taking on this role comes with its own unique set of pros and cons.
Cons of being your own registered agent
- If you plan on being your own registered agent, you may end up having to use your home address (especially if you have a home-based or web-based business), which will make the address public. This could create potential privacy concerns. It could also mean the address will be available to marketers and may increase the amount of junk mail you receive at your home.
- If you're planning on moving or relocating your business location, you would need to notify the state of each address change, which can be time-consuming and tedious. You will likely also need to pay a fee for each notification of a change in address.
- Registered agents need to have regular business hours. This can be especially difficult for small business owners, who are often juggling multiple responsibilities already.
Pros of being your own registered agent
The pros of being your own registered agent include saving costs for hiring an outside registered agent. On average, in California, a registered agent service can cost anywhere from $50 to $300.
You’ll also benefit from knowing immediately when documents are received—because you’ll be the one receiving them.
So what are my options when choosing a registered agent?
You can hire a friend or family member.
If you have a friend or family member who lives in California and has a physical address, you can designate them as your registered. They would need to follow California requirements, however, like being available during normal business hours to receive all mail in-person.
You can hire a California Registered Agent Service, also known as a Commercial Registered Agent.
There are a lot of advantages if you decide to go this route.This includes:
- Privacy: Your registered agent’s address will be listed on the public record instead of your own personal or office address. This is especially important to consider if your business operates out of your home.
- Convenience: If you choose to take on the role as your own registered agent, you will need to be available to receive official notices during standard business hours. Hiring a professional registered agent allows you to keep a flexible schedule.
- Discretion: If your business is ever sued, your registered agent will notify you immediately and discreetly. No need to worry about getting served in front of your employees or customers.
- Peace of mind: A professional registered agent service will send you regular compliance reminders and notify you of any requirements needed to keep your LLC in good standing. As a result, you can focus more of your time and attention on running your business.
Final steps for choosing your California registered agent
You have a few options when it comes to choosing a registered agent. Fortunately, the process doesn’t have to be complicated. Going with a registered agent service will free up a few tasks from your already-full plate. That gives you more time to focus on managing and growing your business.
Learn more about how Swyft Filings can serve as your company’s California registered agent.