After you have finalized the structure of your LLC and have designed a business plan with a certain capital amount, you have to fill in the legal requirements of starting your LLC. One of those requirements is getting an address for all the documentation involving your LLC. A virtual address allows you to receive your mail without being physically present at that address.
Any address that helps receive the paperwork for your LLC sent from the secretary of state office can qualify for being registered as LLC’s address. A virtual address is where your LLC isn’t situated, but it can be used to receive all your paperwork and for registration purposes.
The importance of having a virtual address for LLCs has increased over the past few years as the IRS and federal taxation agencies have increased their monitoring of business activities. Before that, you could have used your home address as a registered address for your LLC, but now it comes with many questions about privacy and is no longer the most viable option.
So, a virtual address is a place that is not just helpful in having your mail delivered quickly to you but also offers a great sense of security and privacy protection. You can imagine the privacy concerns when your house address can be found easily online when your LLC is registered with it.
HOW TO GET A VIRTUAL ADDRESS?
Instead, it is a straightforward process, but you have to decide what kind of virtual address you want for your LLC. Deciding it is imperative, and you have to consider how much anonymity you want for your LLC and where exactly you want your address to be located.
There are many online providers for the virtual address. You have to choose your provider and then choose from their plans that suit your needs. After you have selected your provider and your plan, you have to submit a notarized USPS form 1583 along with two photo identifications to validate your address.
You get various options to choose from in your plans, but it is always more credible to select a physical address instead of a PO box. Having a physical the virtual address will help you build your credibility among the stakeholders of your LLC – clients, creditors, etc.
COST OF VIRTUAL ADDRESS FOR YOUR LLC
It depends upon the service provider you choose for your LLC and then the kind of plan you have selected. Usually, physical, virtual addresses are slightly expensive as compared to PO box numbers. Furthermore, it also varies from address to address – as an address in NYC will be costly compared to selecting an address from other parts of the state of New York.
Coming back to the exact figure, the typical cost of a virtual address revolves around $10 to $100. The lower end of this cost belongs to the PO box numbers, and as you move towards the physical addresses, the price increases. Similarly, the virtual addresses from metropolitan cities are costlier than the addresses from other cities.
WHY DO YOU NEED A VIRTUAL ADDRESS?
While we have already looked into some of the reasons you need a virtual address, we will take a detailed look into this now. The primary reason for getting a virtual address for your LLC is its privacy over using a home address.
However, privacy and security are not the only reasons behind using a virtual address for your LLC over your house address. Using a home address also doesn’t offer a professional look at your LLC. Your LLC should always look credible, and nothing can do it better than having it registered with a virtual business address.
Furthermore, if you want to simplify things than using your home address, nothing will do it better than registering it at a PO box. For instance, how do you plan to explain to your customers that your LLC is located inside a post office building? It is why always avoid registering your LLC at a PO box.
Nothing compares to having an actual office for your LLC and using its address for your LLC, but if you are unable to do it, the best way is to use a virtual business address for your LLC. Again, when considering a virtual business address, do not opt for a PO box.
ADVANTAGES OF USING A VIRTUAL ADDRESS
The virtual address offers a sense of security, protects your privacy, and looks more professional, but are there other advantages of using a virtual address for your LLC? Yes, there are, and a lot of them.
A virtual address for your LLC offers a very different marketing advantage, and it upscales the branding of your business. When you have your LLC registered at an address that is a business hub, you are already one step ahead of your competitors. An address at a known business place will always offer you an upper hand in terms of branding.
Furthermore, if you are operating an LLC that is in a transition phase, having it registered at a virtual address will be beneficial compared to registering it at your home address or a PO box. You can also change your virtual address anytime without much fuss.
Furthermore, a virtual office will office you a lot more leverage over a PO box. For example, some parcels from your client or secretary of state office will not be delivered to a PO box. A virtual business address will help you by receiving it and forwarding it to you quickly.
DISADVANTAGES OF USING A VIRTUAL ADDRESS
While there are many advantages of using a virtual address for your LLC, there are some demerits as well, but they are very insignificant.
There is an argument about the lack of centralization that comes with choosing a virtual address for your LLC. However, this should only be a problem if you have multiple co-owners and employees in your LLC. If you are operating a single-member LLC or have very few employees, lack of centralization is not a problem.
Furthermore, on the virtual addresses where you don’t have a mail-forwarding setup, and you have to collect your mail yourself, it could be a time-taking and expensive process. However, nowadays, almost all providers offer a mail-forwarding service, which shouldn’t be a problem.
Frequently Asked Questions:
In the FAQs section, we shall take a look into some of the highlighted questions about the use of a virtual address for your LLC:
CAN I USE A VIRTUAL ADDRESS FOR MY EIN?
Since EIN is linked with taxation, a virtual address means nothing to tax professionals. You can register your LLC in any state’s virtual address, but EIN is usually for federal tax purposes and not for taxes related to the state.
CAN I USE A VIRTUAL ADDRESS FOR A BANK ACCOUNT LINKED WITH MY LLC?
Yes, it is legal in the United States to register a bank account with a virtual address. However, you would still have to visit the bank yourself and offer all the required documents for opening a bank account.
IS IT LEGAL TO USE A VIRTUAL ADDRESS FOR LLC?
As long as there is nothing shady happening, it is perfectly legal to use a virtual address for your LLC. However, you would need to make sure that you are receiving your mails at the given address and that you have a permit from the occupier of the address to use it.
DOES USPS OFFER VIRTUAL ADDRESS?
USPS doesn’t offer virtual business addresses, but it provides you virtual PO boxes that you can use for receiving your mails. However, it is not recommended to use a virtual PO box for your LLC.