If you’re looking to start a business in the South, you could do worse than the Magnolia State. A Mississippi LLC, or “limited liability company,” is easy and affordable to form and maintain — you can even complete the process online. Use the following tips and step-by-step guidance to learn how to get an LLC in Mississippi.
Starting an LLC in Mississippi will include the following steps:
- #1: Create an Account with the MS Secretary of State
- #2: Choose a Name for Your LLC
- #3: Choose a Registered Agent
- #4: Fill Out and File a Certificate of Formation
- #5: Draft an Operating Agreement
- #6: Request a Federal Employee Identification Number
How to Get an LLC in Mississippi in Six Steps
Running a business can be complicated, but registering your LLC in Mississippi is a simple matter of completing the Secretary of State LLC application online, or printing and mailing it. Following these six steps will have your LLC operating before you can spell out M-i-s-s-i-s-s-i-p-p-i.
1. Create an Account with the MS Secretary of State
All of the forms you’ll need to file to register your Mississippi LLC are available on the Secretary of State’s website. To access them, create a registered filer username and password.
2. Choose a Name for Your LLC
The next step to setting up your Mississippi LLC? Search for an available name. Perform a Mississippi business searchto make sure your business name is not identical to another one already in use. Your LLC name must contain one of the following:
- Limited Liability Company
- LLC
- L.C.C.
Mississippi also restricts the type of businesses that can operate as LLCs. For example, banks are prohibited from organizing as LLCs, as are insurance companies.Your LLC name can’t contain the following:
- Bank
- Banker(s)
- Banking
- Trust or trust company
- Insurance
- Corporation or incorporated
- Partnership or limited partnership
You may reserve the name you intend to use for your business by filing an application for name reservation with the Secretary of State. It costs $25 which can be paid online or by mailing a check. Mailing a check will extend the processing time by three to five days.
3. Choose a Registered Agent
If you’re a business owner, you’ll be receiving important documents in the mail. As in any state where you do business, you need a designated address where an appointed person or business is available during all business hours to receive correspondence for your LLC. This is known as a “registered agent,” and you can hire one for as low as $50 per year. A list of Mississippi LLC registered agents is available on the secretary of state’s website, or you can search online for your own.
4. Fill Out and File a Certificate of Formation
Your Mississippi LLC is almost official! The most substantive part of figuring out how to get an LLC in Mississippi filing the certificate of formation. This is completed on the secretary of state’s website or by printing and mailing the form. It costs $50, payable at the time of filing or by a mailed check.
One piece of information Mississippi requires is your business’s North American Industry Classification System (NAICS) code. This is used to classify types of businesses for statistical purposes, and can be found on the U.S. Census website or by searching online for a free resource like this NAICS identification tool.
You’ll need to provide the following information when you fill out the certificate of formation:
- Your business name (if you haven’t reserved it, make sure it’s still available)
- Your business email address
- Whether you want the effective date of registration to be immediate or at another point within 90 days
- Your business’s NAICS code
- Your registered agent’s name and address
- The name of one organizer of the LLC
Once you file the certificate of formation, Mississippi will issue a state business identification number. You’ll use this number to file the annual report due during tax season each year.
5. Draft an Operating Agreement
Very few states require LLCs to have operating agreements on file, but it is better to be safe than sorry when it comes to determining how your business will operate. Especially if you plan to have employees or other LLC members, it’s wise to protect yourself legally by outlining your policies and procedures in a legally binding document from the beginning. Operating agreement templates are available online for free or for a small fee online. They usually contain information on the following:
- Membership in the LLC
- Rights and duties of the members
- Voting percentages of the members
- How profit and loss is to be portioned
- Provisions for buying or selling membership
- Provisions for members resigning or dying
- Dissolution of the LLC
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6. Request a Federal Employee Identification Number
Congratulations — you’ve learned how to get an LLC in Mississippi. To prepare to meet your tax obligations, you’ll need to request a federal EIN if you plan to hire employees or your LLC has more than one member. It’s free to apply for an EIN, but you’ll need a taxpayer identification number — such as a Social Security number — to apply.
How Much Does an LLC Cost in Mississippi?
The cost of setting up your LLC in Mississippi can be as low as $50 if you plan ahead. Besides paying yearly taxes, it’s not too expensive to keep your business running in Mississippi. In fact, it’s free to file the required annual report once your LLC is officially registered.
If you reserve your LLC name before filing the rest of your LLC papers, it will cost an additional $25. Other changes you may need to make after filing your LLC paperwork, such as amending your certificate of formation or changing your registered agent, may incur filing fees as well.
Overall, with the state’s low cost of living, you can get a big bang for your buck if you’re savvy about spending in Mississippi.
Mississippi LLCs: Types
In Mississippi, you can start a partnership or sole proprietorship simply by engaging in business activity — no paperwork is required for these informal business types. If you want more legal protection for yourself and your personal assets, you’ll want to form an LLC, corporation or another business entity that is considered legally separate from you.
LLCs vs. Corporations
Both LLCs and corporations shield business owners from liability for most actions of the business. They also protect business owners’ personal assets from creditors of the business. For tax purposes, an LLC can be treated either as a partnership (if the LLC has more than one owner, or “member”) or a sole proprietorship (if the LLC has one member), or a corporation.
If it elects to be taxed as a corporation, an LLC will pay taxes at the business level, and the members will pay personal income tax on the income from the business. An accountant can advise you on what tax status works best for your business.
LLCs require less paperwork and ongoing administrative requirements than corporations. A Mississippi LLC requires little more than filing a few forms and paying taxes each year.
Pros and Cons of Forming an LLC in Mississippi
Pros
- Mississippi has fewer reporting and operational requirements for LLCs compared to other states
- Mississippi does not have a state income tax, which can benefit LLC owners
- Forming an LLC in Mississippi only requires filing articles of organization and paying a small fee
Cons
- The liability protections afforded to LLC members may not be as strong as in other states
Mississippi LLC: How Long Does It Take?
To get an LLC in Mississippi in a day, you’ll just need to gather your information before filing. The filing process itself can be completed quickly, and you can pay the filing fee and download your registration online.
Of course, planning a business typically doesn’t happen overnight, so the planning stage can take much longer than the registration process. Consider these small business resources specific to Mississippi, especially if this is your first business:
- Mississippi’s Small Business Development Center
- U.S. Small Business Administration’s Mississippi district
- Mississippi.org’s minority-owned and small business resource page
- Mississippi Secretary of State’s crowdfunding resource
ou’ve Formed Your Mississippi LLC: Now What?
Learning how to get an LLC in Mississippi is only the beginning. There are ongoing requirements every business must meet, depending on what goods or services the business offers.
Licensing
You will need to check for state and local Mississippi business license requirements, such as requirements for LLCs providing legal or medical services or other licensed services. Mississippi provides a full list of regulatory boards with which you may need to register.
Insurance
There may be special insurance requirements, especially if you have clients visiting your business premises. Mississippi follows the Small Business Administration guidelines when it comes to requiring insurance. If you have employees, you’ll likely need workers compensation insurance.
Recordkeeping
Mississippi LLC laws require you to keep the following documents at your principal place of business:
- Name and address of each member and manager
- Copy of the certificate of formation, with any powers of attorney (POA) relevant to the certificate
- Copy of any effective operating agreement
- The amount of cash and description of value of property contributed by each member and when additional contributions will be made, if applicable (if not included in the formation documents)
- A written statement explaining what would cause the LLC to dissolve (if not contained in the formation documents)
Of course, your business will need to retain tax and other records in addition to the documents above. It may be a good idea to have a regular accountant to consult to make sure you don’t throw away necessary information.
Annual Reports
Using the state-issued business identification number you received when you filed your certificate of formation, you’ll file the free annual report on the secretary of state’s website each year by April 15.
The Bottom Line: Forming an LLC in Mississippi
In Mississippi, creating an LLC is a very simple procedure that only requires a few steps to finish. To make paperwork easier, the state offers a wealth of materials, including template forms and step-by-step instructions. Mississippi is among the greatest states in which to form an LLC because of this. Examining top LLC formation services may also help to expedite the procedure.
Frequently Asked Questions: Mississippi LLC Formation
What are the requirements to form an LLC in Mississippi?
You must file articles of organization with the Secretary of State and pay a $50 filing fee. The articles must include the LLC’s name, registered agent, and principal address.
Does Mississippi require an operating agreement for an LLC?
No, Mississippi does not require a written operating agreement but it is highly recommended to outline management, profit/loss distribution and voting rights.
What are the ongoing costs for an LLC in Mississippi?
You must pay an annual $50 report fee to the Secretary of State. You may also need to pay for business license renewals, legal/accounting services, commercial leasing, insurance and taxes.
How long does it take to form an LLC in Mississippi?
If you file online, the formation process usually takes 1-2 business days after the Secretary of State approves your articles. You’ll receive a certificate of formation when complete.
