There are many considerations you need to think about before launching your business. And one big factor is deciding about where to establish your new business? You’re drawn to the East Coast, Delaware, to be exact. It’s the place for you. Read on to learn about the 4 things every new startup founder should know about Delaware business addresses.
1. You’ll Need a Registered Agent to Form Your Delaware LLC
You might be wondering what a registered agent is and if you can be your own registered agent. First, did you know that a registered agent is a requirement to operate your LLC? You have to assign a registered agent to act as your business’s official point of contact with the state for all service of process. Your registered agent is responsible for receiving all compliance information and official correspondence related to your business. Essentially, your registered agent ensures that your business does not get in any legal trouble with state rules and regulations in the case of a lawsuit.
While rules vary state by state, there are three main expectations of all registered agents.
- Registered agents must have a physical presence in the state that your business is registered in, for this case since you’re forming an LLC in Delaware your registered agent must be in Delaware
- Registered agents must operate at a physical street address
- Registered agents must operate during normal business hours, Monday to Friday, 9:00 AM to 5:00 PM
So, if you want to make sure your business is in good standing with the state, be sure to get a registered agent that follows these rules!
Now the question of whether you should act as your own registered agent.
If you travel often for work or spend most of your days driving around the city meeting clients, being your own registered agent isn’t ideal. Another consideration is if you work odd hours and cannot maintain the standard business hours. Finally, for the address, you’re probably asking are there any downsides to the kind of address? Yes, there is, and here’s why.
2. You Can’t Use a PO Box as Your Address for Your Delaware Registered Agent
If you were thinking about using a PO Box as your address for your registered agent, think again. While there are some BIG reasons to not use a PO Box, the biggest holdback as seen from rule #1, the address must be a physical street address, and a PO Box is not defined as a real street address in the eyes of the state of Delaware.
Do yourself a favor and skip the PO Box altogether.
Now, let’s look at some other considerations for your address for your Delaware registered agent.
3. Your Delaware LLC Registered Agent Information and Address Will Be on Public Records
As a Delaware LLC, your registered agent information and address will be on public records which are accessible by anyone and everyone.
So, why would you have to worry about this? Well, if you use your home address as your registered agent, which is completely legal to use, but the downside is you are offering up your private home address to the general public. This means that anyone curious or noisy enough to search into your personal information, whether it’s a jilted customer or hacker, will be given easy access to your home address. You wouldn’t want a stranger creeping around your neighborhood, would you?
Long story short, don’t be your own registered agent because your home address will be open to the public, offering a free-for-all to the world. So, if you aren’t using your home address and won’t be assigning yourself as your own registered agent, who can be your registered agent?
4. Who Can Be Your Registered Agent
Seeing as a PO Box doesn’t work and how using your home address is not an ideal option to use for your registered agent, what are your registered agent options?
Friends or Family Members
Yes, you are legally allowed to use your friends’ or family members’ addresses as your LLC registered agent. This means that Joe will be responsible for being your official contact with the state, receiving service of process documents on behalf of your LLC. This option can be convenient and come at a low cost, but there are some risks you need to be aware of before committing to this option.
Because your friends and family members have other priorities and being your registered agent isn’t Joe’s only responsibility, it is unrealistic to expect that he will always prioritize delivering your business documents immediately when he receives them. This means you may encounter delayed deliveries (Joe’s kids and work might take his priority and he won’t get to it until 2 weeks later), which can jeopardize your business when you receive time-sensitive documents. Don’t risk your business’ standing with the state because of simple mistakes like that.
Additionally, you need to make 100% sure that you can trust Joe as your registered agent. Because your registered agent will be receiving business-sensitive documents and compliance information, you need to make sure that who you entrust as your registered agent is reliable and can comply with the rules of being a registered agent, including remaining available during normal business hours. They should also be well-versed in compliance and legal matters, so your LLC doesn’t go belly up.
Those are big things to put on Joe and it’s also a big risk for your business. Overall, it can be difficult to find a close friend or family member who can meet all of these requirements, so it’s recommended that you choose a different registered agent option instead. Continue to the next section to explore the option of a registered agent service.
Registered Agent Service
Registered agent services are commercial services that specialize in receiving service of process documents, from compliance forms to tax documents. Their sole purpose is to operate as the registered agent on behalf of your LLC. So, what does this mean for your business?
You will receive prompt and timely notifications for every piece of correspondence received. This means you’ll never miss time-sensitive information, and you will be able to ensure that your business complies with all rules and regulations set by the state. You’ll always be in good standing with Delaware!
Additionally, your privacy and secure business information will never be compromised because it is the registered agent service’s job to protect your information. You won’t expose your personal home address.
You can rest assured that your correspondence will be delivered through a secure process and all of your documents will be sent in an organized manner, meaning you won’t have to spend time sifting through boxes of papers and piecing together what needs to be done. Read more about the reasons to use a registered agent service here.
While you often do have to pay a fee for this service, VirtualPostMail (VPM) offers FREE registered agent services!
Having a trusted registered agent service ensures your LLC is always in compliance with the state, and you never have to stress about missing important information or legal deadlines.
When you form your startup in the state of Delaware, there are a couple of things you need to keep in mind. PO boxes are not a viable option of address for your registered agent. You need to be careful about the address you choose for your registered agent because this information will be on public records. While you are legally allowed to use your own home address or a friend/family member as your registered agent, there are many risks and disadvantages to your business in doing so. The best option is to invest in a professional registered agent service.
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