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Are virtual addresses legal

Are Virtual Addresses Legal For A Business To Use?

Grant Merriel

If you’ve just begun your start-up journey and you’re trying to grow from a small to a medium-sized company, some questions regarding the registered office and the principal place of business might arise. Are virtual addresses legal? If so, are they suitable for your needs?

While the Covid-19 pandemic dictates new rules in the business environment, many organisations have to re-think the traditional ways of working and to find alternatives. Therefore, a virtual address can be an excellent choice for your company.

Having reservations at the beginning about the legality of virtual offices and addresses is understandable. This is the main reason why you need to have a clear understanding of the legal requirements which are necessary to run a business.

Although a virtual office and a virtual address are more affordable in comparison to a traditional office and working style, the benefits are not all about cost savings. In the current global context, it is necessary to adopt a different perspective and make radical changes so that your business can expand. It has become more apparent that the working environment will never be the same again.

Table of contents:

  1. What is a Virtual Address and how is it different from a Virtual Office?
  2. Are virtual addresses legal?
  3. Why you shouldn’t use your home address as a registered office or business address?

1. What is a Virtual Address and how is it different from a Virtual Office?

You may confuse these two concepts initially. Although they look similar at first glance, there are differences between a virtual office and a virtual address that you should keep in mind when making the best decision for your company.

  • Virtual office

It offers all the benefits of a traditional office (for example, email forwarding, phone answering services, meeting rooms, etc) for when you and your team work remotely and also builds a professional image for your business. It can also be the ideal solution if your company does not have a fixed location.

A virtual office not only gives the business a physical address, but it also allows you to interact with employees and clients just like in a traditional work environment. 

  • Virtual address

Renting a virtual address allows you to have a permanent business address where you can receive mail and packages. Usually, it doesn’t provide open access to meeting rooms, although they can be rented if you require them. 

In a nutshell, a virtual office and a virtual address can both provide you with a physical business address, while the difference between them lies in the services that can be accessed. 

The straightforward answer to this question is yes, a virtual address is legal for your business to use and can be utilised in various capacities, such as:

  • A Business Address

This means you can use your virtual address to receive correspondence and communications. It is not necessary to be the same as your registered address. For example, if your company begins to grow and expand, you can choose to have virtual addresses in multiple and different cities. 

Therefore, you may consider your virtual business address as the place you can be found and where third parties can communicate with you, but an address where you have to register your office is still required.

  • A Registered Office

According to the Australian business regulation, setting up a registered office is a legal requirement for each company. 

A registered office is a place where you can receive statutory mail, such as official documents and notifications, and where the Australian Securities and Investments Commission (ASIC)  can contact you. 

Therefore, it’s perfectly legal to use a virtual address as a registered office, as long as you can receive correspondence, it is a physical address and, in case the company doesn’t occupy the address, you have the written consent of the occupier. 

  • A Business Address and a Registered Office

A company can also decide to have the same address for the registered office and the principal place of business.

Consequently, keeping a few key considerations in mind will help you decide which business address works best for you and your business. You should also know that ASIC won’t accept a post office address as a registered office or as a principal place of business. Also, it must be pointed out that a virtual address is not a P.O. Box. 

Having a P.O. box will only make your business look uncommitted and it will tie you down by a physical address, without having the possibility to scan and forward the letters you receive to your email. 

3. Why you shouldn’t use your home address as a registered office or business address

If you ask yourself, “Can I use my home address as a registered office or even as a business address?”, the answer is “Yes, you can”. But there are important reasons why you might want to re-think mixing your personal details with your businesses, such as:

  • ASIC’s public records allow anyone to know where you live, which could jeopardize your security and the one of your family;
  • It can adversely affect your businesses professional image;
  • Your business will not appear that large and, as a consequence, you may lose credibility;
  • As your business grows, you may need  to change your company’s address, which can be a painful process for a company, since it means that you should write to all your clients and suppliers in order to keep going with your activity;
  • You will be significantly more vulnerable to identity theft.

In summary, virtual addresses are legal and they can help you grow and boost your business. If they were not legal, they wouldn’t be accepted by ASIC. 

You can use different addresses for the registration of the office and for the principal place of business as well as the same for both. 

No matter if you’re taking the first steps to register your company or you already run a small business remotely and you seek to expand it, you can benefit from a virtual address – It will keep personal information secure, establish credibility, portray a professional image to potential clients, help you save time and money, as well as potentially obtain better rankings within Google and other search engines. And, if you are interested in seeing how a virtual address can help your business grow, please be sure to consider us at B2B HQ

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