How to Start an LLC in Mississippi: Cost and Registration Steps

As a business owner, you can choose any legal business structure for your operations. However, an LLC remains the most beneficial option for startups, as well as small and medium-sized businesses. This is mainly due to its beneficial tax and limited liability aspects. Unlike other business structures, an LLC can be set up in any state, regardless of the owner's location.

In this review, we will talk about how to get an LLC in Mississippi. You will also find out what things to do after the registration process and how you can form a strong company that will be ready for every possible legal event. Moreover, you will find out what budget you need at the initial stages of your LLC formation and after its official establishment.

Mississippi LLC Registration

If we compare limited liability companies with other business structures, e.g., corporations or sole proprietorships, we will see a number of advantages that become crucial for most businesses. These advantages are mainly associated with reliable personal liability protection, easy startup process, tax and distribution flexibility, as well as charging orders and credibility that LLCs can provide to businesses. 

• By separating your personal and business financial life cycles, an LLC allows you to keep your personal assets safe in case the company runs into debt or other financial/legal problems. The same goes for all members of the LLC. And even though there are cases when the owner can lose legal protection, they are more related to fraud or the lack of a corporate bank account, but we'll talk about that a bit later;
• The advantages have to do with pass-through taxation, which makes it possible to avoid double taxation. Also, the moment you start an LLC in Mississippi, you should know that the state itself has its own advantages. For example, businesses that are controlled by women have the prospect of receiving a reduction in tax liability. Moreover, the state does not impose any major federal taxes on business owners;
• As for an easy setup process, this means that business owners don't have to address a professional lawyer to properly register an LLC in the state. The entire registration process can be completed fairly quickly by the owner himself, even if it's his first time;
• Although Mississippi is not one of the top 5 states for LLCs, it's still one of the cheapest states to register your business. That said, the state filing fee to file a Certificate of Formation is only $50. We will talk about Mississippi LLC fees and other related expenses in more detail below. 

In addition to all of the above-mentioned strengths, limited liability companies can easily build credibility with customers, business partners, and investors, which can't be said about all other business structures.

How to Form an LLC in Mississippi in Five Steps

When it comes to business formation, U.S. business laws apply to all newly created and existing businesses. At the same time, each state, city, or county may require business owners to comply with additional regulations.

Taking into account that foreign persons can also start a business in the state, it's worth mentioning the requirements for foreign LLCs. Thus, to register your foreign business in Mississippi, you will need to fill out and file an Application for Registration of Foreign Limited Liability Company with the Secretary of State, as well as provide the address of your statutory agent and a Certificate of Good Standing from your home state. 

Now let's find out how to form an LLC in Mississippi for residents of the state in 5 mandatory steps.

1. Name Your LLC

Find a business name for your LLC that will not only look good to you and your clients but also fit the rules and requirements of the U.S. government. In Mississippi, there are no special rules or regulations regarding business names for LLCs. Thus, business owners must comply with the general regulations. 

Consequently, here's a list of rules that you can't ignore:

• Searching for an available business name. As in any other state, in Mississippi, you cannot use names that are already taken by some other existing business operating within the state. Unless, of course, you have a good reason for that, i.e. the official permission from the company with the same name; 
• Specify a business entity. Every unique LLC name states that your business is a limited liability company, which looks something like this: "Coffee Shop LLC" or "Coffee Shop, L.L.C."; 
• Business purpose and name. If your LLC's business purpose does not correlate with the name, then it's considered a violation. For example, if you are going to sell animal products, then your LLC name should indicate this.

You can check your chosen name's availability on the Secretary of State's website. Moreover, your LLC name must be 100% unique, which will allow you to:

• Improve your online presence (your LLC name will be associated exclusively with your company); 
• Increase your chances to get approved by the Secretary of State;
• Get an EIN (employer identification number) for the business; 
• Get a business license if you need to use any restricted words/phrases. For example, words that point to state and federal entities can only be used if you have previously obtained the appropriate license.

Additional tips on business name reservation

To know how to get an LLC in Mississippi with maximum benefits, you should also get a domain name so that your clients can quickly find your company online. Your domain name should be available and easy to remember. If you already have an idea, you can check it on Namecheap or Google Workspace. 

Registering a trademark will help protect your company's assets and goods. Once a trademark is "tied" to your business name and confirms your ownership of all your company elements (name, logos, goods), you and only you can use them for your business purposes. In other words, a trademark protects your rights to use the mark to identify your company goods and/or services and prevent your competitors from using it for the same purpose.

If you choose to file a DBA (AKA a fictitious business name) though, know that it only helps "shorten" your business name and make it more convenient for marketing purposes. Say, in case the former is too long or not suitable for commerce. However, a DBA does not protect your copyrights. Moreover, you may not even be able to use your fictitious name legally in commerce in case it violates another company's trademark.

Where do you register your business name?

Once all the rules have been followed, and the perfect business name for your LLC has been found, it's time to register it. There are 2 options:

• If you're not ready to run your business at the moment (for any reason) but have an intention to do so in the future, you will need to reserve your LLC name to prevent others from using it during that period of time. This can be done by filing an Application for Name Reservation with the Mississippi Secretary of State. Once the Secretary approves your application, the right to use the name is reserved for you for 180 days;
• Otherwise, if you're ready to get started right now, you don't need to go through the name reservation process - simply submit your Certificate of Organization to the Secretary of State and wait for the approval. Once you have a green light on setting up an LLC in Mississippi, this will indicate your business name meets all the requirements.

2. Appoint a Registered Agent

Mississippi Code 79-35-5 (Appointment of Registered Agent) requires all businesses to file a Certificate of Formation with the Secretary of State to provide contact details of their commercial/noncommercial registered agent (RA).

The RA's job is to receive legal/tax documents and communicate with the state government, as well as receive service of process on behalf of the company. By omitting this field in the Certificate of Formation, the Secretary of State will not be able to approve your Mississippi LLC registration. 

Who can be your RA?

As a business owner, you can hire an employee of any company or a third-party legal entity to become your official RA. This can also be any of your adult family members, friends, colleagues, or even yourself. The process for appointing an RA for an LLC in Mississippi is subject to the general requirements imposed in the United States and has no specific rules to follow. Thus, your appointed RA must agree to receive official documents and legal notices from the state on behalf of your LLC.

Below you can see a list of basic requirements for registered agents in the U.S.: 

• Must be a resident of the state and available in the registered office during normal business hours to accept tax and legal notices from the state;
• If it's a person, he/she must be 18 years of age or older;
• If it's an entity, it must have an appropriate business license to do business in the state;
• Must have a registered office and mailing address to receive legal correspondence from the state. 

When choosing a third-party service or a business formation company as your RA, consider whether they know how to start an LLC in Mississippi and what experience they have in the field. Research client reviews and study customer feedback online. Also, make sure you check the list of services offered to weigh out all the pros and cons and understand how the company meets your business needs. 

On being your own RA

As a business owner, you can be your own resident (registered) agent if you are ready to manage your business paperwork. Given the fact that an RA must be in the office all day, which means no lunch breaks, trips, vacations, sick leaves, etc., being your own RA can be quite challenging and not good business practice.

You will have to use your home address as your registered office address (if you have an actual office there since this is a requirement), which will be publicly available for everyone interested. Moreover, there is always a risk of missing an important notice from the state, which will lead to negative consequences (possible lawsuits, fines, and loss of reputation). 

The only advantage to being your own registered agent is that you don't have to pay for the service. 

That's why it's still recommended to hire a professional RA service for the job. In this case, you will have the following benefits:

• Privacy. Your registered agent's address will be available in the public domain instead of your personal home address;
• Concentration. A professional RA will allow you to focus on managing and growing your business, and the RA will help maintain it and comply with all requirements. Moreover, you will not miss any notice or deadline;
• Reputation. You will not get into any embarrassing situation associated with litigation notices being delivered to your office in front of your employees or clients. 

Think good about if you really need to take on such a burden? Especially, considering the fact that there are many great RA services out there offering their registered agents for hire. Some will even provide RA services at no charge (for the first year) in their cheapest package. That said, do you really want to take on extra responsibilities and deal with potential inconveniences?

How do you change your registered agent?

You can change your RAs after your LLC formation in Mississippi by applying online to the Secretary of State. Get on the website, click on "File an Amendment on an Existing Business,” and fill out the form to submit. Also, you will have to pay a $10 fee.

However, you should first find another RA who is willing to cooperate with you and get his/her consent. Your "ex" registered agent, on the other hand, must be notified of the change. This way, you will ensure a smooth transition from one registered agent to another.

If you previously performed this role yourself and decided to switch to a third-party expert, you will need to file an amendment with the Mississippi Secretary of State, which is the best way.

3. Filling Out and Filing the Certificate of Formation

Once you have chosen a business name and registered agent for your LLC, it's time to fill out the Certificate of Formation and file it with the Secretary of State. A Mississippi Certificate of Formation is a set of information details about your future business that will legally establish an LLC. An approved document allows you to legally run a business in the state of Mississippi. Therefore, when forming an LLC in Mississippi, filing the Certificate of Formation is an obligatory step in the registration process. 

The filing is done exclusively online at the MS Secretary of State's website. To do this, you will need to create a Mississippi Corporations Register Filer account on the website. You will then receive an email with your password and username. Save the information and go to your personal account. Next, fill out the Certificate of Formation form as follows:

• Getting started. The process begins under the "Name Reservation and Registration" section. Click on the "Form a Mississippi Corporation, Non-Profit, LLC, Partnership or Cooperative" link under and select the type of business (LLC), indicate your name, business address, and business email; 
• Effective date. You can skip this field if you plan to start your business operations immediately after getting your Certificate approved by the Secretary of State. Otherwise, in case you plan to "activate" your company in the future, you will need to enter the appropriate date;
• NAICS code is a 6-digit number that describes business type. You will need to choose the one which most closely matches your business activity. The NAICS code will let individuals interested in your company understand what products or services your LLC offers;
• Registered agent. In this section, you will need to provide the contact details of a person or an entity acting as your RA;
• Signature. The Certificate of Formation can be signed by the organizer, manager, or member; 
• Submitting. This page will help you determine if there were errors in the completed document. If there are, you can get back to the previous section and make the necessary edits. This is where you may also need to register with the state Department of Revenue and add an attachment about additional LLC rules/regulations. Once all the requirements are met, you will need to pay the registration fee of $50. For this, you can use your credit card. Next, submit the registration document.

This is how you file a Mississippi LLC Certificate of Formation. If everything is OK, you (and your RA) will receive a copy of the document in 1-2 days from the Secretary of State.

Note that the processing time may take longer due to the COVID-19 situation and workload.

Certified Copies and Amending Your Certificate of Formation

As an LLC owner, you (or other members of your LLC) may need more certified copies of the Certificate of Formation, which can be obtained from the Secretary of State's online platform almost instantly. For this, you simply need to log in to your account on the website and submit a request to get your copies. Each certified copy will cost you $10.

As for making amendments to your Certificate of Formation, they also can be made online, by mail, or in person at the office. By filing an amendment, you can change:

• The name of the company;
• Your principal office address;
• Information about members and managers of the LLC

If you need to change your registered agent, you will need to complete and file a Change of Agent form with the Mississippi Secretary of State, Business Services Division.

The time for processing amendments online is 24 hours, other ways make take up to 3 working days.

4. Prepare an Operating Agreement

If you want to have a complete understanding of how to open an LLC in Mississippi,  you should take care of an important internal company document called an Operating Agreement (OA). Even though the state of Mississippi has no mandatory requirements regarding this document, there are several good reasons to have one.

An OA is a series of rules, regulations, and provisions that help regulate the management of the business within the company, making its operation more smooth and harmonious. This document is more of a contract between all LLC members, which helps resolve disputes and conflicts painlessly. 

Here's what companies usually indicate in their OAs:

• The management structure of the LLC;
• Percent of ownership and members' contribution;
• LLC profit/losses distribution;
• Rights, roles, and responsibilities of each member/manager;
• Voting rights/rules and decision-making authorities;
• Company meeting rules;
• What happens in case of LLC dissolution;
• What happens if a member leaves the company or passes away; 
• How a new member can join the LLC;
• Transfer of shares, compensations, etc. 

You can find quite a few examples and templates online on how to prepare an OA in the right way. However, it's important to keep in mind that each document should be formed individually because you need to consider the needs of your business and the interests of each LLC member. Therefore, it makes sense to consult an experienced attorney or hire one to help you prepare your operating agreement. Once done, the document should be signed by each LLC member.

Additionally, you want to make sure your OA is always up to date if there are any changes in the company. For example, this can be a situation when a new member is added to the LLC or there's a transition to a new form of management (e.g., from member-managed to manager-managed LLC). If changes occur in the information that was indicated in the Certificate of Formation, you will also have to file an appropriate amendment to the Secretary of State.

How is OA beneficial to your business? 

In addition to boosting your company's credibility with customers and business partners and allowing you to open a commercial bank account faster, an operating agreement also reveals other perspectives as follows: 

• Protection. Creating a written OA means that a single-member LLC will be able to prove in court that the owner and the company are two different entities; 
• Evidence. Your OA can be verbal, and LLC members can disclose a list of their claims under such an agreement, but only the written version will be legally enforceable. In addition, the latter will allow you to quickly find solutions to many potential issues, disputes, or events within the company; 
• Power of the law. Just like in any other country, US laws may change occasionally. If this happens, an LLC without an OA must obey them by default. Whereas if you have a written OA, it will allow you to set your own rules.

If you are ready to prepare an operating agreement, we recommend that you do it in parallel with collecting the necessary information for your Certificate of Formation. Once done, each member of the LLC should get their own copy of the operating agreement.

5. Get an EIN for Your Mississippi LLC Registration

Once you register a business in the state, you will have to pay appropriate federal taxes. For this, you will need to apply for an EIN (employer identification number). You can do this online on the IRS (Internal Revenue Service) website for free.

According to Mississippi state, every multiple-member LLC, operating in the state, must apply for an EIN after the registration process. This 9-digit number will allow you to:

• Legally hire employees;
• Open a separate bank account;
• Get a loan from a bank;
• File tax returns;
• Apply for business licenses/permits. 

Note that if your LLC has only one member and no employees, you can avoid getting the 9-digit number and use your Social Security number (SSN) instead. However, even in this situation, an EIN is still beneficial for your personal data protection. 

How do you apply for an EIN?

The first fastest and most effective option is to use the IRS website. You can do it during regular business days (Monday - Friday) from 7 a.m. to 10 p.m. 

That said, you'll need to prepare the following information to apply for an EIN:

• Type of your business entity;
• How many member(s) are in the LLC; 
• State in which the LLC is located;
• Name and addresses of the responsible party of the LLC (e.g. the owners, members, or the managing member of the LLC or a third party applying for an EIN on behalf of this LLC);
• Additional details. 

Given that this information will already be collected earlier in the filing of constituent documents, you will not need much time to fill out all the fields. The same goes for processing time - the number will be assigned in a matter of seconds after submitting your application.

However, it will take up to two weeks before your EIN becomes part of the IRS's permanent records. You must wait until this occurs before you can:

• File an electronic return;
• Make an electronic payment;
• Pass an IRS Taxpayer Identification Number (TIN) matching program."

You can also apply by phone, but only those who own non-profit organizations or firms established outside of Mississippi will be able to do so. You should expect the approval letter from the IRS within 4 weeks.

LLC Mississippi Cost and Turnaround Time

While Mississippi is considered one of the least expensive states to open a limited liability company, it's worth considering a number of other requirements that imply expenses for LLCs. 

This section of the review is dedicated to Mississippi LLC costs and turnaround times for requests. 

• As mentioned earlier, the state fee for filing a Certificate of Formation is $50. However, the price only applies to domestic LLCs. If you're opening a foreign LLC in Mississippi, be ready to pay a $250 fee to file your Certificate with the Secretary of State. The filing process is done solely in the online system on the Secretary of State's website, and the documents are normally processed within a couple of days. There are no expedited processing options available on the website;
• If you plan to reserve a business name, this will also cost you another $25. The name reservation process also takes place on the Secretary of State's website, and you can "hide" your business name from other businesses for 180 days;
• Along with the official LLC name, you can also file a DBA or trademark. The former option will cost you $25, whereas registering a trademark is more expensive even though it provides more rights and benefits to your LLC;
• You will also need to pay for the services of a registered agent if you don't plan to become one yourself. The cost of a third-party professional can range from $40 to $300 per year. 

Note that US-based business formation companies provide their services to help entrepreneurs understand how to set up an LLC in Mississippi, as well as other solutions to successfully launch and run a business. Many BF companies will offer activation packages to companies, which often include one free year of registered agent services.

• At some point in your business's life cycle, you will also need to get a Certificate of Good Standing to verify the official status of your LLC, i.e. that your LLC is legally formed, properly maintained, and still active. This will cost you an additional $25. This document is issued by the Secretary of State;
• Operating agreement. Although you can prepare this document independently, it's best to do so with the help of a professional attorney to not miss any detail and consider all the specifics of your business. In this case, you will also need to consider the cost of such a service. Make sure your chosen lawyer has enough experience in the field;
• Next, we have permits and licenses, which, depending on your business sphere, may either cost around $100 or be obtained at no charge at all. It all depends on what type of activity you plan to do. For example, business license costs usually range from around $50 to $100, whereas professional licenses are usually quite expensive (from $100 and higher). 

These are the expenses you may have to consider at and after the initial stage of your business formation. Once your LLC is up and running, you should also pay attention to other requirements, e.g. taxes, business license renewals, annual reports, and more.

First Things to Take Care of After Forming an LLC in Mississippi

Opening an LLC in Mississippi is only half the battle. Once set up, you will also need to take care of a few more important things that will help fully prepare your LLC for legal operations. 

The first thing is to write an LLC business plan that will include the main goals and objectives of your company. Also, make sure you include potential risks and opportunities to analyze your key success factors and find the best ways to grow your business. This document should be created independently or with the help of experts specializing in your niche.

Although it should be noted that a business plan for an LLC is often prepared in advance, before the registration process. This will allow you to determine the cost of an LLC in Mississippi and your prospects for the project as a whole. 

A standard LLC business plan will usually include the following points:

• Title (or cover page). This is where you should provide a simple description of your company and its business activities;
• Contents. This will help your potential investors and business partners navigate through the plan;
• Executive summary. This will help people have a brief understanding of your business plan and see the steps you're going to take to achieve your goals;
• Business background. This is where you should indicate your experience and main skills. Also, you can tell about the company's ownership, history, values, and mission;
• Marketing, accounting, and action plans. Here you can describe the main product/service you plan to offer to your clients and how you will do it (describe your marketing strategy and pricing policy). Also, this section can include information about where your initial capital comes from, your monthly budget and projections, expected ROI, and additional strategies you plan to implement in the project;
• Summary. This is where you can restate your main business goals, mission, and values;
• Annex. This is where you can include any examples of your marketing or promotion materials, statistical analyses, reports, charts, and any other related elements.

Next, consider the following steps: 

• Separate bank account. You will need one if you want to separate your personal and business assets. Most business owners have a separate bank account for security measures. Especially, when it comes to LLCs. What's more, a business bank account will inspire confidence in your clients and business partners and help you get business loans much faster. Once you get an EIN, you can immediately open a business account in your chosen bank;
• Insurance policies. This is primarily about protecting the interests of the company in case any negative situation arises that may lead to a lawsuit or fines (e.g., injuries or property damage). Depending on the industry and niche, each business chooses its own insurance policy - this can be general liability insurance, business property insurance, professional liability insurance, and so on; 
• Licenses and permits. Depending on your business niche, a different state or local licenses/permits may be required. For example, a general business license (some cities in Mississippi require one), professional business license, seller's permit, DBA license, home occupation permit, commercial sign permit, health permit, etc.;
• Software. You can automate and streamline your business operations with the right software for your LLC. This will help your company become more productive and efficient, and you will be able to achieve goals much faster.

Keep Your Company Compliant

Now that you've started your business operations, you must comply with state rules and requirements to maintain your Mississippi LLC in good standing and profitable. Therefore, you need to follow all current MS laws. What's more, it's important to keep your finger on the pulse and keep track of any changes in the legislation so that you don't put your business at risk of being fined for non-compliance.  

As a business owner, you will need to track your business license(s)' expiration dates and timely renew them to be able to provide your services/products to clients. 

Also, it's highly important to: 

• Pay your LLC taxes;
• File your annual reports;
• Follow federal tax regulations and filing requirements of the state. 

Thus, you want to know in advance what types of taxes you will need to pay and how you should do that. This will help you keep your LLC's finances on track. For example, if you sell physical goods, you will have to pay Sales Tax.

Conclusion

That's it! Now you know how to apply for an LLC in Mississippi and what steps should be taken before and after registration. Initially, before filing the Certificate of Formation, you will need to collect all the necessary information to apply to the Secretary of State. Namely, you will need to choose an available and unique business name for your LLC. This includes an official name, a DBA or trademark (optional), and your domain name. Also, make sure you hire a professional registered agent to handle your legal and tax documents. After that, go to the Secretary of State's website and fill out the Certificate of Formation form online, pay the filing fee, and wait for approval.

While you wait, you can prepare (write) an operating agreement. Make sure you consult an experienced lawyer on this matter or hire one to write an OA for your LLC. Next, you should obtain an EIN and open a separate bank account to split your personal and business finances.

After creating an LLC in Mississippi, try to keep all your registration documents organized and remain compliant with existing and new state laws, i.e. pay your taxes on time and renew your business licenses. There's also good sense to hire a professional accountant or an attorney to help you with your accounting and legal issues at the initial stage.

All in all, that's all we wanted to tell you in this review. We hope that this guide will help you form a successful and strong company.

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