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.
Table of Content
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.
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.
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.
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:
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:
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.
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:
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.
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.:
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.
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:
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?
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.
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:
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.
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:
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.
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:
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.
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:
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.
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:
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.
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:
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:
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.
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.
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.
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.
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:
Next, consider the following steps:
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:
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.
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.
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.