Why You Need A Registered Agent Service

Did you know that as a business owner, you are legally required to have a Registered Agent in the state that your real estate company is formed in? This is particularly true if you have set up an LLC or Series LLC outside of your state of residence. There are many good reasons why investors choose to set up their companies in a location they don't live in. Some states offer favorable tax treatment, including a lack of a state income tax, while others offer legal and operational benefits to owners of corporate structures. It is not unusual at all for an investor living in, say, North Carolina, to have their investment properties secured in a Nevada or Delaware Series LLC. There are a number of financial, legal, and practical reasons to structure a company outside of your state of residence. There is nothing wrong with this practice. In fact, we often recommend it for asset protection purposes - check out our free educational resource on the best states for forming a Series LLC for even more details. But real estate investors who do this must have a Registered Agent in the state where their business operations are based.

What Exactly Does A Registered Agent Do?

The Registered Agent serves a clear role that is critical to the legal standing of your real estate investment business. This is the person who will function as your legal point of contact for all of your business matters in your company's state. He or she will be responsible for receiving business documents and keeping up with all legal correspondence. To learn more, check out our previous educational article on the role of the Registered Agent.

Who Can Serve As My Registered Agent?

Fortunately, you have options when it comes to satisfying the Registered Agent requirement. These are some of your most common options:

  • Serve as your own Registered Agent. Some people try to be their own registered agent. While you can absolutely do this under certain circumstances, you may not be qualified to thoroughly understand or meet the legal obligations that are necessary. This option is not even available if you are not conducting business within your own home state. For instance, if you're a California resident, you could not serve as your own Registered Agent for any property in another state, like Texas. We do not recommend that most investors serve as their own agent unless they are attorneys licensed to practice in the relevant state themselves. Let's take a look at your second option.
  • Hire a "professional Registered Agent." There are people who are professional Registered Agents available for hire. Essentially, this is someone who you pay (typically on an annual basis) to satisfy the legal obligations in the state you're doing business in. This option appeals to some investors because it appears cheap on first glance. But we have found in our professional experience that you absolutely get what you pay for. There are no legal regulations restricting who can become a Registered Agent. You do not want to be the unfortunate person who gets the woefully unqualified Agent from a random list online. This is a mistake you could end up paying for later. Now we will move on to the recommended option.
  • Use the services of a qualified real estate attorney. Your final, and far and away best, option is to use an attorney licensed to practice in that state.

Using an attorney has some obvious advantages over a professional Registered Agent. First, someone who is simply a Registered Agent may not have much experience in matters of law. These individuals also cannot assist you with other aspects of company formation. An experienced real estate attorney, on the other hand, will be able to help ensure your compliance across the board - not just with the Registered Agent requirement. Further, a qualified attorney will also keep track of changes in law and corporate regulations. Because the law is always evolving, it's best to have someone with the knowledge and research skills to make sure you're operating your business by the book. Some investors prefer to use a professional Registered Agent to save a few dollars, but we find having a qualified attorney to help defend your real estate empire is well worth the investment.

Why Choose Royal Legal Solutions to Serve as Your Registered Agent?

At Royal Legal Solutions, we have served as Texas Registered Agents for our clients for years. We are real estate attorneys and investors ourselves, and well aware of the legal ins-and-outs of this role. Further, an attorney is the ideal legal face of your business. Our prices for this service are lower than market average, and competitive with some "professional Registered Agents." The difference is that we have the qualifications and credentials to back it up.
If you have questions about the Registered Agent requirement, contact us today If you're considering forming a business entity such as a Series LLC in Texas, Royal Legal Solutions can also serve as your in-state representative. Don't neglect this legal requirement for your out-of-state LLC or Series LLC. Take action and stay compliant by scheduling your personalized consultation today.

Last Updated: 
May 22, 2018

Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.

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