Registered Agents and Virtual Offices (The Solopreneur's Checklist, Part 3)
Getting your business started is a big step, but getting all your legal ducks in a row can be as intimidating as it is important. This checklist is meant to serve as a guide to the main hurdles you’re likely to encounter, how much you actually need to worry about them, and how to clear them like a champ.
This is Part 2 of the Solopreneur’s Checklist series. You can find the other parts (once they’re live) here:
1. Name vs. DBA vs. Trademark
2. Entity Formation
3. Registered Agents and Virtual Offices
4. (coming soon!) Banking and payment processing
5. (coming soon!) Business tax basics
6. (coming soon!) Business insurance
7. (coming soon!) Website terms and policies
8. (coming soon!) Licenses and permits
Disclaimer: This guide is for informational and educational purposes only and should not be considered a substitute for personalized legal advice from a licensed attorney in your jurisdiction. Every situation is unique, and legal requirements can vary significantly based on your specific facts, industry, and location, so it's highly recommended that you consult with a qualified attorney in your jurisdiction. This guide is not intended to be legal advice, and no attorney-client relationship is formed by reading or otherwise using it.
Also, it’s written primarily from a California perspective. These issues are likely very similar in other states, but the particulars may vary.
Registered Agents and Virtual Offices
One of the steps of entity formation is selecting a registered agent for service of process. This sounds very official, but really your registered agent is just the answer to the question, “How do we get in touch with you if we have to?” This isn’t your mailing address for day-to-day operations — it’s your address for Official State Communications like “hey, you owe us some taxes” or “someone has filed a complaint against you.” (Some states refer to a registered office instead — this is talking specifically about the registered agent’s physical address, but is essentially the same thing.) Basically no communication that goes through your registered agent is likely to be good news, but that’s also why you’re required to have one in the first place: so if there’s a problem, you can’t just shrug and pretend you were never contacted about it. The registered agent’s whole job is to be a publicly available way to get in touch with you during standard business hours.
If you used a third-party service to actually do your entity formation, chances are good that they’re also acting as your registered agent and you’re paying them a bit each year for the convenience. Basically anyone who meets their state’s requirements (generally “over 18 and has a physical address in the state,” but not always) can serve as a registered agent — your lawyer, your CPA, your mom, whoever — but there’s plenty of businesses out there whose primary activity is providing registered agent services.
There’s a handful of other kinds of services that perform somewhat similar functions, though they’re not required the way that registered agents are. Let’s quickly talk through what they are and why you might want or need them for your business. One feature they all share is that they pseudonymize your physical address — that is, they’re all ways of keeping your actual, physical address private. This is especially important since many solopreneurs work out of their homes, and your home address is something you almost certainly want to keep private.
P.O. Box
The simplest option is a P.O. Box, which is just a private, locked mailbox at a post office. You can use one to cleanly separate your business and personal mail, but… that’s about it. In many cases, you’ll also have to physically come to the post office to pick up your mail.
For one thing, it's not a physical street address, which means you can't use it for things like business registration in many states. You also can’t use a P.O. Box when requesting an Employer Identification Number from the IRS (more on that in Part 5). Package carriers like UPS or FedEx may also give you a hard time about delivering to P.O. Boxes.
A P.O. Box will run you in the ballpark of $50-$150 per year, depending on location and how big a box you need.
Virtual Mailbox
A virtual mailbox provides you with a physical street address. You can almost always use that address on your public filings, so that’s the address that someone will see if they search for your LLC in your state’s database. FedEx and UPS are also unlikely to hassle you about delivering to a virtual mailbox.
Virtual mailbox providers will generally email you pictures of the mail you receive and let you decide whether you want them to forward the mail to you, open it and send you the scans, or shred it. They’re more hands-on and more flexible than just having your mail forwarded. It’s basically like having your own private mail room, or a receptionist just for your mail.
This can cost you anywhere from $10 to $50 per month, depending on the provider, whether they offer any add-on services, and the volume of mail you expect to receive.
Virtual Office
A virtual office piles on the bells and whistles. In addition to providing a physical street address and mail handling, a virtual office typically also provides receptionist services for phone calls, as well as drop-in access to physical meeting rooms, conference rooms, and sometimes even co-working spaces.
The range of amenities for virtual offices can vary pretty widely, and so can the associated price tag. You can expect virtual office services to run you anywhere from $50 to $200 a month.
That said, since many virtual office providers are also virtual mailbox providers, you can often start with a virtual mailbox and then upgrade to a virtual office if that becomes necessary for you as your business grows.
What you’ll need will depend on what kind of business you’re starting, and may change as the business grows. For example, you probably don’t need a virtual office setup if you’re starting a housesitting business. But you very well might need one if you’re starting a consultancy, where you may need the occasional meeting space and might benefit from your business appearing larger and more established to your clients. There’s no one-size-fits-all answer here.
There’s also a lot of overlap — many providers of registered agent services also provide virtual mailboxes and/or virtual offices, and vice versa. You’ll have to shop around a little bit to find the right price point and feature set for your business. (Getting your virtual mailbox/office services from the same provider as your registered agent services lets you have one fewer address to keep track of, which can be nice, and often you can get a better deal if bundling services from a single provider.)
Do bear in mind that these tools for essentially hiding your address from the public are for hiding your address from the public. You may still need to provide your actual, physical address to your bank, your insurance provider, the IRS, and so on. That’s okay because those are institutions that you’ll have a contractual relationship with, and they don’t disclose that information about you.
Where you’ll need to be careful, assuming you’re working out of your home and your privacy is important to you, is on filings that go into the public record (like your entity formation paperwork, and often your application for a business license from your city). That’s why it’s important to understand which of these options — virtual mailboxes and virtual offices, but generally not P.O. boxes — can go on your official, public filings.
Note that in most states, your name will still have to go on the public filings; that’s part of why it can be so important to keep your address out of them. Some states have special programs allowing people to form entities even more securely, using a fake address and sometimes even a fake name on all the public filings, if they’ve experienced stalking or similar harassment. If that’s been your experience, you’ll want to search for something like “stalking harassment anonymous [LLC/corporation] [your state]” to find out whether your state has such a program and whether or not you qualify.
Stay tuned for part 4 of the Solopreneur’s Checklist: Banking and Payment Processing!