The best state to file your LLC or Corporation may well be the state that you do business in. In most cases, people will generally file in the same state their business is located in. It would make it things easier to file in the same state since all your revenues will be generated in the same state.
However, there are people who decide to file their LLC or Corporation in a different state other than the state they are located in. The reasoning behind filing in other states are many. The reasons can be due to taxes, privacy, corporate environment, lower regulation and others. Filing in a different state can make things tricky when filing your tax returns. So it is always best to consult with an accountant before you file.
Also, if you file in a different state, you will need to have a resident of that state to be the registered agent and this person must have a physical address. Many people would not be able to provide a friend or relative in the state so they would require the services of a third party registered agent. These entities sole purpose is to provide address in all 50 states to where the Secretary of State can serve process and send legal forms. These registered agent services would then forward these documents to you.
Again, it is wise to get advisement on what state may be best for you. You should be well informed about the pitfalls of forming in a different state.
A registered agent is an individual that is a resident of the state in which the filing of the LLC or Corporation is to take place. This individual will be the person who will be the service of process agent when the state needs to send legal documents in the event of a lawsuit.
The requirement of the registered agent is that the agent must be over 18 and be a resident of the state. The address in which the service of process will occur must be a physical address. The state will not accept a PO box for the registered agent address.
In most cases, the registered agent is usually one of the members of the LLC or an officer of the corporation. The LLC or the Corporation can always designate another individual to serve as the registered agent. This does not mean that the agent is liable in the event of a lawsuit, it just means that the service of process will be served to this individual. If you do choose to have someone other than the owner of the LLC or Corporation, it is wise to choose someone that is reliable because it is their responsibility to send these documents to you.
There are third party providers who can serve as a registered agent for a fee. The fees are usually around $125 to $150 per year. The advantage of using a registered agent fee is that some states sends out tons of junk mail and therefore shield you from this. Also, using a registered agent may shield you from privacy inquiries. On state websites, information about the registered agent is posted. Therefore, people would only see the third party registered agent information instead of yours. One other use for a registered agent and the most common is if you need to file in another state other than the state you reside in. In most cases, you will not have a physical address that you can provide the state for the registered agent address. This is where a third party registered agent would provide this address for you.
When you form a LLC or form a corporation, you will need to decide whether you will serve as your own registered agent or require a service. A registered agent is mandatory in all states.