New Businesses and Privacy

A business owner is often surprised to learn that his or her home address is unnecessarily available to the public.

This availability is a privacy and safety concern that may also have adverse asset protection consequences.

While there is not a perfect fix for an existing business, there is an easy solution for a business not yet legally formed.

Why are The Addresses of Business Owners Available?

Operating a business through a legal entity (as opposed to doing so in your own name) confers liability-reducing, scaling, and tax advantages. Consistent with these advantages, a business entity acquires legal personhood.

As such, a state (including Kentucky) ensures that a business formed and operating under its laws can be served legal papers, i.e., notice that it is being sued, or otherwise contacted.

To this end, the Kentucky Secretary of State provides a searchable database of all domestic (formed in Kentucky) business entities.

The Scenario

You are forming a new business that is either internet-based or that doesn’t yet have a physical office or storefront.

So, your attorney or CPA provides a document that requires your address. Like most people, you list your home address without much thought.

(I was, unfortunately, one of these people before I attended law school)

Now, almost always, your home address and its association with your business are available to anyone. This will always be so, even if you later change the address on file.

You not being advised of this fact irritates me for two reasons.

First, it is a safety concern, which may be particularly worrisome for women internet entrepreneurs, who face a statistically higher chance of being targeted by a stalker at some point.

Second, in considering whether you or your business are worth suing, this information—your home and its value—will be relevant.

Nonetheless, if someone is aware of the issue and decides not to spend the additional money to keep their home address private, that is their choice. But they should know that they are making it.

Required Addresses for Kentucky Businesses

In Kentucky (like other states), a business needs to provide two addresses.

• Registered Office
• Principal Office

A registered office is where someone can serve you notice that you are being sued. The registered office must be located in Kentucky and may not be a P.O. Box or other non-street address.

In contrast, the principal office may be located outside the state of Kentucky and may be a P.O. Box or other non-street address.

If your business has a physical location where it conducts business—perhaps one that interacts with the public—then that location can serve as both the registered and principal office.

If, however, your business has no such location, then you will likely need two different addresses. This is because most commercial services that will act as a registered agent do not provide regular mail services. Further, those that do so while also providing full mail services are located outside of Kentucky.

The Solution

A business that does not have a non-residential location should consider using a company that provides registered agent and virtual mail services.

I use Kentucky Registered Agent for my registered office. The price is $49 a year.

I like using Traveling Mailbox for a principal office address. The basic plan is $150 a year. This company provides full mail services, including mail forwarding and check deposit.

Conclusion

For $200 a year, the owner of a home-based business can shield their home address (and its association with that business) from the public.