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Can a Virtual Office Address Be Used as a Legal Business Address?

Can using a virtual office address be beneficial for business growth? Find out all you need to know plus more below!

 

With COVID increasingly popularizing the business model of fully remote or hybrid work teams, it’s becoming harder and harder to justify the cost and upkeep of commercial real estate – but that doesn’t mean companies, whether big or small, can rely entirely on personal addresses or PO boxes as a legal business address.

 

Virtual offices represent a huge boon to businesses who can’t afford to lease a commercial space of their own, or function mostly remote, and see no benefit in investing a large portion of their working capital into a physical office only a handful of team members might be able to commute to, if at all.

 

But do virtual offices fulfill the requirements of a legal business address? In most cases, yes.

 

However, there are a few issues to discuss, and misconceptions to clear up.

 

The Merits of a Virtual Office

 

First, let’s tackle what a virtual office actually represents. In many cases, the name itself gives away the fact that the office does not exist in the same capacity that most conventional offices do.

 

However, virtual offices do share a real-life physical location, often in a commercial building within a business district or business park of some sort. Virtual offices often share the same street name with the offices of large financial institutions, banks, insurance companies, and broker firms.

 

Their business model relies on providing clients access to that name as a legal address, without requiring anywhere near the same financial investment usually needed to work at that address.

 

Virtual offices can be considered a legal business address. This is especially important when establishing a limited liability company, or an LLC. You can declare a virtual office as your business’ legal address in your Articles of Organization, a requirement for filing the paperwork as an LLC.

 

However, all LLCs and corporations are required to have a registered agent. These are required to be available to visit and talk to at a physical address during business hours. One solution is to hire a law firm to act as your registered agent. This way, you can still avoid keeping your personal information in the documents for your LLC. Some virtual office companies also provide registered agent services, to solve this problem entirely in-house.

 

What Are Virtual Offices Like?

 

If someone were to visit a virtual office, they would find most of the amenities that you would usually expect to see at an office. However, instead of being staffed by the employees of the companies that use said virtual office as their official location, virtual offices are staffed by receptionists and correspondence staff who receive and relay messages and packages for multiple companies.

 

For all intents and purposes, a virtual office serves the function of a front desk and call center for all the companies it hosts.

 

This does have a few drawbacks. For one, clients expecting to visit an office might be disappointed at the fact that the company they’re paying a visit to is a subtenant, so to speak. This is where a coworking space can come into handy.

 

Coworking Spaces as Virtual Offices

 

Coworking spaces are not virtual offices. But they can be. Coworking spaces rent their floor space and divided sections (such as meeting rooms and certain shared amenities) to a number of clients, including individual freelancers and contractors, as well as corporate satellite teams.

 

A coworking space may also offer virtual office services and may further allow client companies to make use of the space’s meeting room to receive and host clients, as well as use the space for in-person onboarding.

 

Why Not Use a PO Box?

 

PO boxes are a simpler and cheaper option for receiving and redirecting correspondence, but you also get what you pay for. A PO box is nothing more than a post office box that receives mail for you, and that’s about it. There is no physical location, no business address to speak of no office space for an LLC to claim as their legal business address, and certainly no space for a registered agent.

 

PO boxes can be used to receive fan mail and even certain important business correspondence when working as an entertainer from home, a career many have successfully started during the lockdown. This way, you can avoid putting out your personal address when wishing to receive messages and packages. However, for a company or remote team, a virtual office represents a much more practical solution.

 

Virtual Offices Vs. Home Offices

 

If privacy isn’t a concern for you, then there are a number of other reasons why registering your home address as your business address might get you in trouble.

 

These include loss of LLC and corporation rights, because LLCs and corporations are generally structured to provide limited liability. This requires at least a degree of separation between the professional and the personal. Naming your home your business address gets in the way of that.

 

You need also consider your Homeowners Association and your local zoning laws. Some residential areas and landlords prohibit home offices or might have a problem with you declaring a portion of your home a commercial area.

 

If you name your home as a business address, you should also prepare to receive a lot of correspondence and several in-person meetings.

 

Getting a Space of Your Own

 

Of course, simply getting a commercial space of your own is certainly easier said than done.

 

We have already mentioned some of the challenges in your way, including lack of access to the necessary funds, as well as maintenance fees, upkeep responsibilities, the additional cost of setting up the office, getting all the equipment together, and much more.

 

If you do find an office space you can afford, chances are it won’t be in an area you’re comfortable presenting your brand in, or it will have a number of potentially unwanted qualities to make up for its low price, such as incredibly little floor space.

 

Partnering with the Right Space

 

If you are in a position where you cannot afford the right address, then a virtual office might be a better solution for you. By working with a coworking space, you can even get the benefit of using an actual real office location for onboarding and client hosting, and much more.