Registered Agent vs Business Address
Registered Agent vs Business Address
Here at L4SB, we form a lot of LLC’s and Companies. Needless to say, our clients have a lot of questions about forming their new company. This blog is written to answer one of our most common questions; what is the difference between the address for a Registered Agent versus the company’s mailing address?
Addresses and Anonymity
Knowing the difference between a registered agent and mailing address is very important for anonymous LLC’s. Remember, a company owner can keep the knowledge of their ownership confidential for many legitimate reasons (read our article on Panama Papers: A Lawyer’s Perspective for more information on legitimate reasons for anonymous LLC’s and companies). Many owners looking to preserve their privacy opt for registered agent services.
A “registered agent” is an “agent of the company” defined under statute (i.e. a “statutory agent”). In other words, a registered agents is designated to receive service of process when a company becomes a party in a legal action such as a lawsuit, legal summons or subpoena. A registered agent can either be a business or individual. Because of this, all states require that a company’s registered agent maintain a physical mailing address in the state where the company (or LLC) is registered. A PO Box does not count as a physical mailing address.
This helps ensure that anyone participating in the legal process as against a particular company has a well-defined agent to send important legal material to. The Registered Agent’s job is to simply accept such legal materials and forward it on to the relevant party. Nothing more.
At the state and federal level, the rules of civil procedure permit service of process on companies through their registered agents, and contain rules on how to serve such registered agents. Yes, any service of process your business might receive through a registered agent is important. Using a registered agent does not invalidate the process. Ignore a legal document submitted to your registered agent at your peril — you can risk a default judgement or worse.
A Registered Agent is not the same as a physical or mailing address of the company. Most states require a business to have a physical address, regardless of where the company is actually conducting business. Companies operating exclusively on the Internet still must have a physical presence somewhere, dictated by where most of its operations are conducted, where it accept regular mail or where one or more of its owners sit. This is not the address of the Registered Agent.
If you don’t want your personal address associated with your company, you can use a “virtual office”. A virtual office is a place where you can rent space or services on behalf of your company. In turn, you use the virtual office as an address for your business.
How does a virtual office service fit into the mix? For starters, a virtual office is not the same as a registered agent. A registered agent (or registered office) only receives your legal documents on behalf of your company. A registered agent does not receive your general mail, and doesn’t have the processes to deal with regular mail. A virtual office can function as an address for your regular office. It must be permitted by the United Stated Postal Service. A virtual office has the processes and permission of the USPS to handle your mail and deliver it to you dependably.
Preserving Liability Protection: Why This Matters
If your LLC is sued, you want the LLC to protect you from personal liability. This is one of the primary purposes of the LLC, but it is possible to “pierce the corporate veil” of a LLC under certain circumstances. Two of those circumstances would be if the LLC is “engaged in fraudulent behavior” or otherwise “fails to follow corporate formalities” (as defined by the Operating Agreement or in Statute).
If you claim the LLC’s “physical mailing address” is the Registered Agent’s address, but you don’t actually control the Physical Agent’s address, then you leave yourself open to a claim by the shrewd plaintiff’s attorney that your LLC is either engaged in “fraudulent behavior” (i.e. by filing fraudulent paperwork to the Secretary of State) or is not “following corporate formalities” by not abiding by the statute that requires disclosure of where the company operates. If such an argument is successful in litigation, then that means the owners are potentially personally liable for the debts and obligations of the LLC.
This is why L4SB does not permit LLC’s to use us as both their Registered Agent and physical mailing address. You want the LLC to be in control of its physical mailing address (i.e. with a legal mailing address maintained by the USPS), so that the shrewd plaintiff’s attorney cannot use such an excuse to pierce the corporate veil, and potentially hold the owners of our client’s LLC’s personally liable.