Are LLC/Corp State Registered Agents a Scam?

[xrac]

If you are incorporating out of state then you need a physical address and a registered agent to recieve legal docs for your company at that given physical address. This is the service they are offering you. No one does this for free.

If you create and register your Corp in your home state, you can be the agent and you can use your own address. This is my suggestion. No need for tax shelters. You are not google, apple, etc.

Focus LTC, is spot on. You only need a registered agent for an address in a state in which you do not have a physical office.
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Unless you get sued...and then this is bad advice. Also, these rules vary by state.

Tahoe Ray you are inaccurate on this. If you get sued you get sued having a different registered agent and address won't change a thing.

 

[Tahoe Ray]

Focus LTC, is spot on. You only need a registered agent for an address in a state in which you do not have a physical office.
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Tahoe Ray you are inaccurate on this. If you get sued you get sued having a different registered agent and address won't change a thing.

This was advice from my attorney and specific to a state like Nevada or Delaware where corp directors can be kept private. Using your personal address eliminates this privacy.

I'm not an attorney so maybe I have received bad advice...

 

[SportsNut]

This was advice from my attorney and specific to a state like Nevada or Delaware where corp directors can be kept private. Using your personal address eliminates this privacy.

I'm not an attorney so maybe I have received bad advice...

I don't think it was bad advice, but it is also not imperative advice either. One strategy in asset protection is keeping a low profile, meaning not letting others know who you are or what you own. [ Lawyers don't sue broke people so if they cannot verify assets that in and of itself can forestall legal action. I should clarify this... this advice would apply to small to medium claim cases... for large claims you are going to get named no matter what.

LLC or S-Corps are good for tax strategies for small practitioners, but your best asset protection device is insurance. Often times the biggest financial penalty of a legal entanglement is the cost of representation up to and including in court. This price tag for this can be 6 figures if the case drags on... so even if you won the case but had a rather sizeable legal bill, you still lose [financially]. Of course one claim on your E&O can be costly in obtaining new coverage.

The falacy of an LLC for liability protection of a small insurance praticitioner is when you are personally hands-on in a transaction you would also share personal liability for any wrong doing or errors. Therefore, even though an LLC exists, any lawsuit would likely name the principal of the business as well in an attempt to pierce the veil of the LLC for asset protection. This leaves you yet again burdoned with costs of defending yourself legally. So you now may have two sets of legal costs, one for you and another for the LLC. So even though I have several LLC's, whcih I do for taxation benefits, I am not sure that it really provides one with the asset protection that many people strive to accomplish here in the end.

 

[xrac]

This was advice from my attorney and specific to a state like Nevada or Delaware where corp directors can be kept private. Using your personal address eliminates this privacy.

I'm not an attorney so maybe I have received bad advice...

That may be accurate in those states. In many states that information is public record.

 

[Focus LTC]

I don't think it was bad advice, but it is also not imperative advice either. One strategy in asset protection is keeping a low profile, meaning not letting others know who you are or what you own. [ Lawyers don't sue broke people so if they cannot verify assets that in and of itself can forestall legal action. I should clarify this... this advice would apply to small to medium claim cases... for large claims you are going to get named no matter what.

LLC or S-Corps are good for tax strategies for small practitioners, but your best asset protection device is insurance...

The falacy of an LLC for liability protection of a small insurance praticitioner is when you are personally hands-on in a transaction you would also share personal liability for any wrong doing or errors.

Bango! Insurance. If you own an LLC, the best thing to do is buy a large commercial general liability insurance policy. If your policy is big enough to cover most legal claims, (one of the first thing attorneys ask for in discovery is a copy of your in force liability policies) then your personal assets will be protected and your company won't have to declare bankruptcy, and you, personally will be shielded from a lawsuit (given the insurance can satisfy the claim).

Lawyers would rather negotiate with your company's insurance provider for a settlement then to sue you personally. Its cleaner, theyu have deeper pockets, and more predictable.

I wonder how many sole practitioner LLC's insurance brokers are out there riding dirty with just personal E&O...

 

[yellowbirdnj]

Well I live in NJ and I live in an apartment and have almost zero assets. My goal was to create an agency and work out of my house but I am unsure if NJ requires me to have a store front or public accessible location? My take on registered agents is that they are really not necessary unless you operate out of state with no physical location and that is not regularly staffed during normal business hours. Just my two cents but I think that a lot of people who start LLC/Corps sign up for services like these do to the novelty and hoopla of starting their own business. Note that there are usually more fees with these registered agents than just the yearly fees.

 

[stacyp]

If you are your own agent you will need to be there all business hours to accept service of process. If you are not there, even if you are just in the bathroom or at lunch, and they cannot serve you, the Secretary of State will put you in an Administratively dissolved status.