If you want to open a new business in the Show-Me State, you may be feeling overwhelmed by the number of results that populate when you research how to start an LLC in Missouri. There are many steps to take when launching a Missouri LLC, so feeling overwhelmed at this stage of this process is understandable.
By following each step in the checklist below, you’ll be poised to confidently launch your new LLC. Missouri promotes a low-cost business climate and numerous incentives for new business owners, so you’ve chosen an excellent location to initiate your company’s operations.
Starting an LLC in Missouri will include the following steps:
- #1: Draft a Business Plan
- #2: Research Your Business Structure Options
- #3: Register a Business Name
- #4: Appoint a Registered Agent
- #5: File Articles of Organization
- #6: Obtain an Employer Identification Number (EIN)
- #7: Draft an Operating Agreement
How to Start a Missouri LLC
1. Draft a Business Plan
In Missouri, creating an LLC requires following both state-mandated procedures and common sense business practices. Although it’s not required by the state, creating a business plan will keep you organized and provide a guide for your next moves. Make careful to use a template that looks professional while creating your business plan. In this manner, when you approach lenders and investors to secure cash for your launch and startup phase, you’ll be able to present it with confidence.
A visionary business plan should include a description of your company’s purpose, its broader operational goals and a clear description of the function of your LLC. You’ll also want to detail the following when outlining how and why your company will ultimately be a success:
- The niche your business will fill within its industry
- The value of your company within the marketplace
- How you’ll structure your internal workforce
- How you’ll fund your startup period until your Missouri LLC achieves solvency
- How you’ll market and brand your company to attract customers and maintain their loyalty
2. Research Your Business Structure Options
You should also carefully weigh all available business structure options before moving forward with the process of learning how to start an LLC in Missouri. You don’t want to invest your time and effort into forming a Missouri LLC if an alternate business structure will better meet your company’s needs.
There are four primary business structures to choose from when forming a new company: Corporations, limited liability companies, partnerships and sole proprietorships. Carefully weigh the following business organizations before committing to any particular structure.
Sole Proprietorship
A sole proprietorship is owned by a single individual. The profits and losses from a sole proprietorship are taxed on the owner’s individual tax return.
Pros: Many small businesses start as sole proprietorships because they are so easy to form, aren’t subject to state reporting requirements and permit their founders total control over day-to-day operations.
Cons: Keeping one’s personal and business finances separate can be tough when operating a sole proprietorship. Also, a sole proprietor’s personal assets may be seized if their business is sued, fined or held liable for a debt.
Partnership
Partnerships function much like sole proprietorships do, except that they’re owned by multiple parties. Unless you form a limited liability partnership, the law won’t treat you or any of your partners as distinct. If your company falls into debt or legal trouble due to the actions of one of your partners, your personal assets may be seized to pay for their poor choices. Opting to form a limited liability partnership will reduce this risk but won’t insulate you from personal liability in the ways that forming a Missouri LLC would.
Corporation
Corporations are distinct legal entities. The owners of corporations are their shareholders. The personal assets of shareholders are totally insulated from corporate liability. Each corporation is run by a board of directors and is taxed as a singular entity. Corporations are subject to significant incorporation and reporting requirements. This structure works best for large companies.
Limited Liability Company
Limited liability companies offer a compromise: Personal liability protection like corporations and flexible management approaches similar to sole proprietorships and partnerships. LLCs can be taxed either as single entities, like corporations, or on the personal tax returns of their owners (called members). If you want operational flexibility and significant personal liability protection, opting to form a single-member or multi-member Missouri LLC may be a good choice.
3. Register a Business Name
To find out if your chosen company name is acceptable for use in Missouri, you must next start a business search with the Secretary of State. Every newly formed LLC is required by the state to register a name that is available as part of the creation procedure. A name is only considered available if it is unique from all other business names used in the state and isn’t being utilized by another firm.
If a Missouri bakery currently goes by the name Happy Belly, LLC and you wish to call your bakery Happy Bellies, LLC, for instance, your desired name will be denied since it is too similar to that of your rival. This arrangement aids in maintaining the integrity of each business’s branding initiatives.
Notice that each of these hypothetical companies has the term “LLC” featured in their names. This is because Missouri requires legal, formal LLC names to contain one of the following designations:
- Limited Liability Company
- Limited Company
- L.L.C.
- LLC
- L.C.
- LC
You can also register a fictitious name (as long as it’s available) to use for marketing purposes. A fictitious name is often referred to as a trade name or a doing business as (DBA) name.
ALSO READ:
4. Appoint a Registered Agent
Choosing an individual or business to accept legal notifications and official documents on behalf of your business is a stage in the formation of an LLC in Missouri. This individual or business is known as a registered agent or an agent for process serving.
At a physical address in Missouri, a registered agent must be generally accessible to accept papers during regular business hours. This location will function as your LLC’s registered address. A registered agent may be any person who resides in Missouri or an organization that is permitted to conduct business there. You must file your Missouri LLC articles of incorporation and a signed statement of permission from your registered agent.
5. File Articles of Organization
You cannot submit your LLC’s articles of organization without naming your Missouri LLC and designating a registered agent, which is why you need to do this so early in the creation process. One of the most important stages in learning how to form an LLC in Missouri is registering the articles of organization with the state. The state will recognize your LLC as “existing” after they receive this papers, your filing fee, and a confirmation of your return authorization.
Before you can fill out the Missouri LLC articles of organization form, you’ll need your formal name, trade name (if applicable), registered agent’s name, registered office address and the names, signatures and street addresses of all LLC organizers. If you’re the one preparing the articles of organization, with or without the assistance of a professional or other LLC members, you’re an LLC organizer. This form also requires:
- A statement describing the company’s purpose
- Clarification about whether the LLC will be dissolved at a specific time (or upon the occurrence of specific events) or will exist until formally dissolved at an unspecified date
- The effective date of the document, if different from its filing date
- Distinction of your LLC as member-managed or manager-managed
6. Obtain an Employer Identification Number (EIN)
You must apply for a federal employment identification number (EIN) before you can pay taxes, recruit staff, apply for company financing, or even create a business bank account. EINs identify corporations in the same way that Social Security numbers (SSNs) identify people.
7. Draft an Operating Agreement
Learning how to construct an operating agreement is an optional step for forming an LLC in the majority of states. However, Missouri requires this paperwork. Since the operational agreement is regarded as an internal agreement, it is not required to be filed with the state. As you design it, though, you should take the process seriously even if the state won’t be watching your back.
Contracts that have legal enforceability in the case of a violation or legal dispute are known as operating agreements. This implies that the wording you use to formalize your LLC membership agreement may have a significant impact later on. Therefore, seeking advice from a small company attorney might be beneficial as you traverse this section of the Missouri.
In this document, you and your fellow LLC members will detail fundamental aspects of your LLC’s operations. Many LLC operating agreements formalize the following concerns:
- Member voting rights
- Member ownership percentages
- When and how often meetings will be held
- How the LLC will be taxed
- Distribution and loss protocol
- Powers, responsibilities and duties of members, investors and managers
- Buyout, sale and dissolution procedures
- Indemnification and liability
- Membership modification protocol
Missouri doesn’t require operating agreements to be structured in any particular way. You simply must have one in place before your company opens its doors.
The Cost of Forming an LLC in Missouri
In Missouri, there is a $50 filing cost for domestic LLCs and a $105 fee for international LLCs. Missouri also requires LLCs to file an annual report and pay a fee. This yearly report cost adds another continuous financial commitment to the equation; it is usually $20 for domestic LLCs and $100 for overseas LLCs.
Pros and Cons of Forming an LLC in Missouri
Pros
- Missouri offers limited liability protection to LLC members
- Missouri is known for its business-friendly climate, with lower operating costs, a skilled workforce, and access to major markets
- Unlike some states, Missouri does not impose a franchise tax on LLCs
Cons
- Missouri has relatively higher initial filing fees for LLC formation compared to the national average
- LLCs in Missouri are required to file an annual report and pay a fee
Finance Your Business Launch
It’s rare that new businesses turn a profit within the first six months to two years of operations. When funding your launch, you’ll need to secure enough financing to get your business off the ground. But, you’ll also need to secure financing to allow you to operate successfully during your startup period until your company becomes solvent.
Thankfully, it’s no longer the case that new business owners must rely on banks alone to provide startup funding. Consider crowdfunding, federal small business loans, state small business loans, microloans, grants and investment programs when crafting your startup financing strategy.
Also, keep in mind that the nature of your personal circumstances may render you eligible for unique financing opportunities. For example, you may benefit from searching for “small business loans for women,” or “grants for Black small business owners.”
Protect Your Business Interests
Now it’s time to expect the unexpected. At some point, your company may face legal challenges or struggle with debt. Your place of business could even be hit by a tornado.
Obtaining business insurance and developing working relationships with trusted professional service providers can help you to weather tough circumstances over time. If you haven’t yet connected with a reputable small business law firm, accounting firm and insurance provider, now’s the time to protect your company from the threats that could compromise its profitability and longevity.
Craft a Winning Marketing Strategy
Simply learning how to start an LLC in Missouri won’t pave the way for a successful business if you can’t get customers or clients through the door. Creative marketing is the key to attracting customers so you can start earning their loyalty.
When creating a marketing strategy, focus at least some of your efforts on building a strong online presence. When customers need goods or services, they’re not going to pick up a phone book, they’re going to open a web browser. Make sure to reserve a memorable domain name before starting to build your website.
Once your site is up and running, open business accounts for your LLC on major social media sites and post your URL on those accounts.
Prepare to Hire Employees and Pay Taxes
Each Missouri LLC that employs workers as part of its operations must follow all Missouri labor laws. If you’re going to hire employees for your LLC, take the following steps before seeking applicants:
- Register for a Missouri withholding number with the Missouri Department of Revenue
- Register for an unemployment tax account with the Missouri Department of Labor and Industrial Relations
- Obtain Missouri workers’ compensation insurance coverage
- Print out required work-related posters if your employees won’t be working remotely
- Report any new employees to the state once you’ve begun the hiring process
You’ll also need to review your Missouri business tax obligations and obtain a Missouri LLC login for tax purposes as a new business owner. If all of this information is overwhelming, don’t hesitate to ask an attorney or accountant for help. Working with legal and financial professionals proactively can streamline operational obligations, protect your business interests and help to ensure that your Missouri LLC is in compliance with all relevant local, state and federal laws.
Network Locally
Local networking can give your Missouri LLC an edge within the marketplace. Checking out the Missouri Chamber of Commerce and its local branches can be a good place to start. Connecting with a business mentor for free can also be helpful. Aim to benefit from all the assistance, tips, tricks and resources you can find — especially if you’re learning how to start an LLC in Missouri for the first time.
By following the checklist above, you’ll move much closer to the end goal of opening the doors of your new LLC. Don’t be discouraged as you encounter bumps in the road and have questions about your new company.
There are many resources available to assist new Missouri business owners during the startup phase of a new venture. Begin by browsing answers to the FAQs below for any additional guidance you may need as you move forward.
The Bottom Line: Forming an LLC in Missouri
Forming an LLC in Missouri is a fairly straightforward process that can be completed in just a few steps. The state provides ample resources like step-by-step guides and template forms to simplify the paperwork. Making Missouri one of the best states to start an LLC. Additionally, exploring leading LLC formation services can further streamline the process.
How to Start an LLC in Missouri: FAQ
Do I need a business license in Missouri?
Obtaining a business license isn’t necessarily required as you learn how to start an LLC in Missouri. However, some Missouri LLC operations must acquire industry-specific licenses before they can become operational. Additionally, some municipalities require new businesses to obtain permits or licenses before setting up shop.
In either case, your local city or county business licensing office can provide necessary guidance.
How much does it cost to start an LLC in Missouri?
There is, unfortunately, no such thing as a free LLC in Missouri. Thankfully though, the fees associated with registering an LLC are low. The sum total of the Missouri LLC filing fees noted above amount to just a few hundred dollars. While financing your company’s launch and startup period may be costly, the LLC registration process is not.
Can I register an existing LLC in Missouri?
If you already own and operate an LLC in another state, you must register your company before you can operate in Missouri. File a foreign LLC registration application along with a filing fee to get started. Then, you can register with the tax and employment agencies detailed above to maintain compliance with applicable state law.
