According to the World Population Review, Mississippi offers the lowest cost of living in the United States, which contributes to its business-friendly environment for both entrepreneurs and employees. With a low 4% to 5% corporate tax rate, business funding programs, and a streamlined transportation system, Mississippi has become a popular choice for businesses surrounding agriculture, manufacturing, and aerospace.
A limited liability company (LLC) offers liability protection and tax advantages (among other benefits) for small businesses. To get started, you must fulfill legal requirements, like naming your business, filing the appropriate paperwork, and completing state tax registration.
How to form a Mississippi LLC in 6 steps
LLC formation in Mississippi is easy. Just follow these steps and you'll be on your way!
1. Choose your business name
Naming your business is the first step toward making it a reality. First, you must ensure that your business name is unique by checking the Mississippi Secretary of State’s business name search tool. It’s important to identify a distinctive name to set your business apart from competitors to avoid customer confusion.
Your business name must comply with Mississippi's naming requirements. Here are some of the most important requirements to keep in mind:
- Your business name must include business entity identifiers, such as limited liability company or abbreviations like LLC or L.L.C.
- Your name must not be similar or identical to an existing business in the state of Mississippi. You can conduct a Mississippi business name search using the business services page located on the Mississippi Secretary of State's website to determine if a particular business name is already in use.
- Your business name cannot contain words used to name a government agency or words that imply a connection to a regulated industry, such as “attorney,” “bank,” or “credit union.”
In addition to finding an appropriate name that meets Mississippi naming requirements, there are a few other considerations to keep in mind:
- Even if you don't think you'll need a webpage, you probably will at some point. After all, the digital world serves as one of the best forms of communication between businesses and consumers. At the very least, you should reserve the option of having one in the future by buying your domain name now.
- If you aren't ready to register your LLC but are concerned your name might be taken by someone else, you can submit a business name reservation form with a $25 application fee. In Mississippi, names may be reserved for up to 180 days if approved by the Secretary of State.
- You must become a registered filer with the Mississippi Secretary of State filing system to access business document forms and apply for your name reservation.
2. Appoint a registered agent
It is a Mississippi state requirement to appoint a registered agent. Your registered agent must be a person or entity with a physical address who is authorized to receive official legal documents and notices on behalf of your business. Additionally, your registered agent must meet the following criteria:
- A business entity registered to conduct business in Mississippi
- The agent must be a Mississippi resident
- The agent must be on-site and available to accept documents during regular business hours.
Although it is possible to be your own registered agent, investing in a registered agent service is highly recommended, as well as appointing an agent who can manage your business’ legal documents in a reliable, timely, and secure manner. The cost of registered agent services can vary depending on how many services they provide. LegalZoom’s comprehensive registered agent services cost $249/yr.
3. File a certificate of formation
The certificate of formation, also known as the articles of organization, is a document that officially establishes your business by laying out basic information about your LLC. You can file this document by completing an online form. To prepare, you must have the following information:
- LLC name and email address
- LLC's effective date (must be within 90 days or the date your certificate of formation is approved)
- Registered agent’s name, address, and e-mail address
- NAICS code (the North American Industry Classification (NAICS) code is used to identify your LLC's business industry and statistical data related to the US business economy)
- The signature of a member, manager, or organizer of the LLC
Once you file your certificate and pay the $50 filing fee, the Secretary of State will review your paperwork. Your documents and payment can be submitted electronically or by mail; however, mailing processing times may vary, making online filings the quickest and most convenient option with an estimated one to three business day turnaround. Once the certificate is approved, your LLC will officially become a legal business entity.
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4. Create an operating agreement
Mississippi state law does not require an LLC operating agreement; however, it is certainly recommended. Your operating agreement will provide an outline of ownership structure, roles, and operational procedures.
Additionally, a Mississippi LLC operating agreement presents a transparent plan for how your LLC will conduct business. Although it is not necessary, it can lend credibility with investors and creditors and help provide clarity in legal disputes. Without an agreement in place, courts can make determinations based on state law, not necessarily what is in the best interest of LLC owners and their members.
The operating agreement can include the following:
- LLC's name and principal address
- Duration of the LLC
- Registered agent’s name and address
- Certificate of formation information
- Purpose of the business
- Members' rights, responsibilities, and voting powers
- Profits and loss distribution
- Incoming and outgoing member procedures
- LLC management
- Indemnification and liability clauses
- Meeting rules
You don’t need a multi-member LLC to take advantage of the structure, freedom, and protection that an operating agreement provides. Plus, you can hold off on traditional filing and fees because creating an operating agreement is absolutely free, and this internal document does not have to be filed with the Mississippi Secretary of State.
5. Obtain an EIN and open a business bank account
The nine-digit employer identification number (EIN) is assigned by the Internal Revenue Service (IRS) to identify your LLC for taxes. You can obtain your EIN through the IRS in four ways: by mail, online, fax, or by phone. Although applying for an EIN is completely free, you may wish to pass the task along to an EIN filing service to save time.
If you apply online, you will be issued an EIN number immediately; however, if you decide to apply by fax, it will take four days to process, and if you apply by mail, it may take up to four weeks.
An EIN allows you to do the following:
- File and manage federal and state taxes
- Open a business bank account.
- Hire employees
- Apply for business licenses (if necessary)
6. Register for state taxes and business licenses
You must register with the Mississippi Department of Revenue for a Mississippi Tax Identification Number, which is required to conduct business in the state. This can be accomplished on the MS Department of Revenue website.
Depending on your business activities, you may need to apply for a local business license or permit. For example, businesses in the food, tobacco, or alcoholic beverage industries are subject to additional state regulations, and are required to obtain special permits.
You can check with the Mississippi Department of Revenue or contact your county clerk to help determine if your business requires a state license or permit. You can also allow a service like LegalZoom to identify and apply for all the licenses and permits you need.
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What to do after forming your Mississippi LLC
Once your LLC is formed, it’s time to roll up your sleeves and start making things happen! Here are some important parts of the process you should add to your business to-do list:
Register a domain name
The modern economy is competitive, especially in a digital world saturated with startups. Reserve a domain under your new business to set your business apart from competitors and make yourself easily accessible on the web. You can use domain name search engines like GoDaddy or Bluehost to search for name availability and register your domain name and start designing your website with a user-friendly website host like Wix or Squarespace. You can also choose to direct your domain name to a list of social media links if you prefer to interact with your customers and clients that way.
Maintain compliance
LLCs must file an annual report online with the Mississippi Secretary of State between Jan 1 and April 15 every year. If you don’t file one, your LLC may run the risk of being administratively dissolved.
LLCs enjoy the option of pass-through taxation—being taxed on the owner’s personal return—but must still comply with state and local tax obligations, including sales tax and income tax.
Obtain a certificate of good standing
Though not necessarily required, a certificate of good standing can verify your legal status and registration in Mississippi. This certificate may provide multiple benefits, such as assistance with business loan applications, business insurance, or opening a business bank account. You can order the document on the Mississippi Secretary of State website for a $25 fee.
Consider a foreign LLC
If you decide to conduct business outside of Mississippi, your business will be considered a foreign LLC in the other state(s). The process of obtaining a foreign LLC qualification will be slightly different for each state, but should be very similar to the process of starting an LLC in Mississippi. You will need to complete this process in each state where you intend to operate.
Apply for a trademark
Branding material is a necessity, especially when first starting a business. If you plan on using designs, symbols, sounds, words, or catchy slogans, it may be a good idea to submit a trademark application to protect your brand. If you’re interested in the benefits of trademark law and would like to apply for a trademark, simply visit the United States Patent and Trademark Office (USPTO) website to get started.
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The cost of forming an LLC in Mississippi
Here are some costs you should consider to prepare for forming your Mississippi LLC:
- Business name reservation (optional): $25
- Certificate of formation: $50
- Registered agent: $50–$600
- Operating agreement: Free, unless you hire a third party for assistance
- EIN application: Free, unless you hire a third party for assistance
- Permits and business licenses: Costs vary depending on the permit and license
- Beneficial Ownership Information Report (BOIR): $0
Total estimated cost: It can cost as low as $50 to form your Mississippi LLC. The cost may increase depending on required licenses and permits, or any additional services you use for assistance.
Special considerations for Mississippi LLCs
- Mississippi businesses with employees must register with the Mississippi Department of Employment Security for unemployment insurance.
- Mississippi requires businesses to have workers’ compensation insurance if they have five or more employees.
- Mississippi maintains a Small Business Development Center to supply resources for small businesses.
How to start your Mississippi LLC with LegalZoom
If forming your Mississippi LLC seems like an overwhelming and lengthy task, you may want to let us handle the busywork. LegalZoom can shorten the LLC formation process—just fill out our quick and simple questionnaire, and LegalZoom’s LLC formation services will take care of the rest so you can focus on what’s next.
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FAQs
How long does it take to form an LLC?
Forming an LLC takes time, and there are several steps you must complete to accomplish this goal. However, in order for your LLC to become a legal business entity, you must file a certificate of formation with the Mississippi Secretary of State, which may take one to three business days to process online.
What are the benefits of filing an LLC in Mississippi?
Mississippi’s business-friendly environment enhances the benefits of filing an LLC. From tax flexibility, limited liability, and pass-through taxation, the Magnolia State’s low cost of living and strong sense of community makes it a fertile place for small businesses.
What are the annual filing requirements for Mississippi?
To keep your business compliant and in good standing, Mississippi LLC owners must file a yearly annual report between Jan. 1 to April 15 to avoid administrative dissolution. LLCs in Mississippi can file an annual report at no cost; however, foreign LLCs based in other states should expect to pay a $250 filing fee.
How do I correct filing errors in MS?
Errors are inevitable, but thankfully, you can file a Mississippi LLC Certificate of Amendment to fix filing errors. This business document costs $50 to file online with the Secretary of State.
How do I dissolve a Mississippi LLC?
If you decide to dissolve your LLC, you must file a Mississippi LLC Certificate of Dissolution. Depending on your filing method, it may take between one to three business days to complete.
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