Should I Use My Home Address for My LLC?

Many of today’s new entrepreneurs choose to run their businesses out of their homes, mainly for convenience and to cut costs. But a home-run business can also be good for tax deductions. 

While in most states, you’re allowed to use your home address for your LLC, there are a number of issues to consider before going that route. First, depending on your business, it could place you at a disadvantage. 

If you run your business from home but don’t want to use your home address, you may be able to use a virtual address instead. This guide walks you through the main issues linked to using your home address for your LLC and provides additional information to help you decide. 

Considerations

Running your business from home is not a decision to take lightly. Before you set up shop in your home office, consider the following concerns.

Security and Liability

Keeping your personal and business finances separate preserves your personal liability protection. Using your home address for your business could appear as if you, the business owner, are combining business and personal activities, which could place your assets at risk. Also, if you use your home address for billing, vendors and suppliers will know where you live, potentially compromising your privacy and security. 

Zoning

Some areas have laws that could bar you from running a business, or certain types of businesses, out of your home. Check your local government to be safe. In addition, some homeowner’s associations and gated communities prohibit business operations. Before registering your home address as your business address, review your lease and community bylaws for rules and regulations.

Professionalism

Having a separate office address for your business adds an element of professionalism and credibility. Using your home address might make your business seem like a one-person operation rather than a legitimate company. If you need to meet clients, there are better places than your home. Depending on your products and services, your clients may prefer the credibility and professionalism of an office. 

Virtual Addresses

A virtual address can offer an additional layer of privacy if you operate your business from home. However, your home address remains unaffiliated with your LLC unless you serve as your registered agent.   

A virtual address is not a URL or online address but a real-world street address at which neither you nor your business resides. A virtual address enables a business owner to delegate the sometimes arduous task of receiving and storing standard mail. 

Mail will be delivered to the address, where a mail service will accept it on your behalf. Most virtual address providers charge fees for their services, typically monthly. The service will scan documents and upload them to a cloud-based virtual mailbox. You can keep them in your virtual mailbox or delete them.

Virtual addresses are common in major cities, which helps make your business more credible. Think about it, which would you trust more, an insurance company based in Cheyenne, Wyoming, or one based in New York City? 

But the main benefit of a virtual address is convenience, as it eliminates the hassle of dealing with paper mail, which can be a huge chore to keep track of and store. In addition, with your virtual mailbox, your business mail is always secure and available in the cloud. 

Registered Agents and Addresses

In most states, you’ll need to identify and assign a registered agent when you form an LLC. A registered agent is a person or business authorized to accept official government correspondence and legal, tax, or financial documents on behalf of the LLC. 

Your registered agent must have an in-state physical address to receive official mail. In other words, a P.O. box or out-of-state location cannot be listed as a registered agent’s address.

Registered agent requirements differ from state to state, so check with your state for details. However, a standard rule is that your appointed registered agent must be available at their address during regular business hours to accept official correspondence. 

Virtual addresses are not usually used as registered agent addresses, as the two are meant for different purposes. But some companies, such as Virtual Post Mail, have begun to offer registered agent and virtual address services under one roof. 

This dual service could be a severe time-saver, freeing the business owner from receiving any business or government-related mail, all of which will be available 24/7 in the cloud. Just be sure to research and ensure such an arrangement is feasible in your state. 

Summary

Although many business owners run their companies from home to cut costs, it’s important to ensure that it’s the right move for your business. Local laws or regulations may be in place that prevents you from doing so, or it might make your business appear unprofessional. 

As with any critical business decision, choosing your business address deserves careful consideration.