In many cases, companies strive to minimize costs in every way possible. One such cost-saving measure involves serving as a company’s own registered agent, especially for entities doing business in Texas, such as corporations and limited liability companies. However, the potential long-term costs associated with this decision are often overlooked.
Originally posted on JDSupra, the insight piece underscores the requirement for such entities to, as quoted, “designate and continuously maintain” a registered agent and a registered office to be served with process. For corporations, this requirement is presumably in place to ensure that due process is achieved if a lawsuit or other legal proceeding is filed against the company.
While the annual cost for retaining a company to serve as a registered agent and provide an address for the registered office stands at around $100, many businesses may view this as something they can bypass to save crucial financial resources. What should be noted, however, is the possible implications and long-term expenses that may arise from being a registered agent for your own firm.
As referenced in the work by legal professionals from Carrington Coleman, the role of a registered agent can entail increased responsibilities and potential risks. A review of these obligations might provide critical understanding towards making sound decisions about designating and maintaining registered agents for companies and law firms.
Entities should always strive for regulatory compliance and be aware of the inherent risks associated with assuming functions beyond their realm of expertise. Thus, before taking on the mantle of a registered agent, it’s necessary to weigh the associated costs alongside the potential risks and burdens to decide whether it is indeed penny wise, or pound foolish.