Almost all LLC registrations in the United States require the “Physical Mailing Address” of the company to be identified. The general rule is that such an address can be located anywhere, it just cannot be a PO Box. Some states, such as Alabama (AL), California (CA), Massachusetts (MA), Maryland (MD) and Oregon (OR), even require that such an address be located within their state’s borders.
Some of our competition will permit their Registered Agent address to be used as the company’s address. If you call the Secretary of State’s office, they will also tell you that the Registered Agent address can be used as the company’s address.
We do not allow this, UNLESS you actually own or control the Registered Address (which means you’re acting as your own Registered Agent). This is because doing so can potentially eliminate the liability protection of the LLC.
If you’re not your own Registered Agent, then you SHOULD NOT USE the Registered Address as your company’s business address. The reason is this address is not in your control. Seldom will they be equipped to actually process mail, and unless you’ve filled out USPS Form 1583, the Registered Agent is not authorized to be a receiving agent for you. In short, you would violate US Postal Service regulations.
Filing a LLC like this would be considered a “fraudulent filing.”
Because of this, if the LLC is sued and a skilled plaintiff’s attorney figures this out, they can use this as a reason to “pierce the corporate veil” of your LLC and therefore sue you personally.
The best practice, is to either use an address under your control or (if you’re concerned about anonymity), purchase an actual virtual office or mailbox. When you do this, you’re actually under contract to lease / rent that mailbox and you are actually conducting business using that mailbox. To do this properly, you actually need to sign USPS forms and meet their requirements for the use of such a mailbox. This means you are certainly under control of the mailbox.
Get your virtual mailbox at L4SB. We will collect mail at this mailbox and forward it to you at your desired frequency.
Companies that permit this are clearly not law firms, nor are they following the law. This should give you some pause on who you’re doing business with. This can mean a number of things, which could be very detrimental to your company should problems occur in the future or you find yourself in a lawsuit.
Let me give you just one example: It’s common for people to forget what the purpose of a Registered Agent is (i.e. to receive legal service of process). Within a couple of years or so, some people cancel their Registered Agent service because they forget why they are paying for the service. So, if you cancel with a company that doesn’t know the law, it’s very likely they won’t even bother filing a “resignation notice” with the relevant secretary of state — this means your company looks like it has a valid Registered Agent, although that Registered Agent won’t forward you any legal notices, because you’re no longer paying for the service.
Such activity could cost you dearly in the form of a “default judgement.” I’ve seen default judgements take what was originally a $20k dispute, and turn them into a $360k dispute, with the power of the court to go after people personally, even though it was originally a corporate-based dispute. You do not want a default judgement ever, and saying your Registered Agent didn’t send you the notice of a lawsuit because you didn’t pay your Registered Agent isn’t going to win you any sympathy in court.
This is just one example. My law firm deals with problems on a daily basis associated with improper paperwork, improper organizational setup, and poor template Operating Agreements. It’s worth a bit of extra money, to make sure things are done right not just in the beginning, but over the lifetime of your company, and of course, to obtain a high-quality Operating Agreement.
If you’re just starting out and considering providers, we hope you will consider us for your next LLC formation — we address all these issues, and more, in what we do as part of our basic service. If you’ve already purchased or formed your company, it’s still not too late to tweak things to improve your position. We can replace your current Registered Agent. We can provide a Virtual Mailbox. We can, for a low-cost fee, provide you with a high-quality, highly customizable Operating Agreement.