The short answer to the title question is “maybe.” You might be able to use your home address for your limited liability company (LLC), but whether you should may be the better question.
An LLC is a business entity that offers liability protection for owners, as well as pass-through taxation, much like a sole proprietorship. To learn more about LLCs, read this Step By Step article.
Benefits of Running Your LLC from Home
- The number one reason business owners choose to run their business from home is to keep costs low. A monthly lease payment for an office or other commercial space can really eat into revenue and reduce your profit margin.
- You may be able to claim a home office tax deduction, which means deducting part of the expenses of running your home as a business expense. This can include part of your rent or mortgage interest, utilities, and other home expenses. This applies if you use a portion of your home exclusively and regularly for business purposes. It also only applies if your home is your principal place of business. That means that you don’t have any other business location, such a shop or office where you also do business.
- Many people enjoy the flexibility of working from home, particularly in light of the pandemic. You don’t have to travel anywhere, you have the ability to set your own schedule, and you can work in your jammies if you want!
Potential Issues with Using your Home Address for Your LLC
- Many business owners run their business from home at first, but you need to make sure you’re allowed to do so. Zoning laws in your area may bar you from running a business, or certain types of businesses, from your home. You need to check with your local government to find out. Some apartment and condo associations, as well as gated communities, also prohibit certain types of businesses from being run from home. Check your lease, association documents, or community bylaws to find out.
- You need to maintain separation between your personal and business finances to keep your personal liability protection intact. Using your home address in some situations could be considered what’s sometimes called “piercing the corporate veil” – a reference to the commingling of business and personal activities that could put your personal assets at risk.
- Having an office address for your business can lend greater credibility and professionalism. Using your home address might make your business seem like a one-person operation, rather than a legitimate company.
- Your privacy will not be protected if you use your home address for billing, vendors, and suppliers. You probably do not want these folks to turn up at your home.
- If you work at home and need to meet with clients, your home may not be the ideal place to do so. Clients may prefer the credibility and professionalism of an office.
Registered Agent Address
A registered agent is a person or business authorized to accept legal, tax, or financial documents on behalf of your business. You can check your state’s website to see if you are required to have a registered agent for your LLC. Your registered agent must be available at their registered address to receive correspondence during normal business hours.
If you are your own registered agent and use your home address, you must be available to receive correspondence at your home address during normal business hours.
If you want to use your home address as your business address, you should be aware of the potential issues. It’s important to make sure you’re allowed to run your business from home, as per local zoning restrictions and your building or community bylaws. Many new entrepreneurs run their business from home and use their personal address, but this could put your personal assets at risk.
When you’re forming your LLC, it’s best to consult with your attorney on the best option for you in terms of address. It’s better to get professional advice to avoid future issues that could damage your business and limit your success.
Forming an LLC is a simple process laid out in this Step By Step article.