Mississippi is part of the 50 States that make up the United States of America and it is located in the southern part of the United States. Mississippi got its name from the Mississippi river and it is ranked as the 31st most populous state in the US. The largest city in Mississippi is Jackson and it is also the capital city.
Do you intend starting an L.L.C. in Mississippi and have no idea on what you need to do? You have come to the right place. In this article, we will be sharing a step-by-step guide on forming a limited liability company in Mississippi. However, before we get started, let us take a quick look at Mississippi and the benefits of creating an L.L.C. in the city.
If you want to form an LLC in Mississippi, you are required to complete and submit a Certificate of Formation with the Secretary of State. There is a $50 filing fee that must be paid upon submission of the documents. Fees can change, check with the Secretary of State for the most recent fees.
Table of Content
- How to Form an LLC in Mississippi
- Step 1: Choose a Name for Your LLC
- Step 2: Appoint a Registered Agent
- Step 3: File a Certificate of Formation
- Step 4: Prepare an Operating Agreement
- Step 5: Comply With Other Tax and Regulatory Requirements
- Step 6: File Annual Reports
- Step 7: Securing Business Licenses and/or Permits
- Step 8: Open Your LLC Bank Account
- Step 9: Foreign LLCs Doing Business in Mississippi
- Step 10: Hiring of Employees
How to Form an LLC in Mississippi
Here are some steps you would have to follow if you want to form an LLC in Mississippi;
Step 1: Choose a Name for Your LLC
Your LLC’s name must be distinguishable from the names of other business entities already on file with the Mississippi Secretary of State. Names may be checked for availability by searching the Mississippi business name database. You may reserve a name for 180 days by filing an Application for Name Reservation with the Mississippi Secretary of State. You will need to register with the Mississippi Secretary of State’s online filing system to get the Name Reservation application form. The filing fee is $25.
Mississippi law explicitly states that your LLC’s name should not be “misleadingly similar” to the names of other businesses on record with the Department of Assessments and Taxation.
To give you a better understanding, here are some of the naming guidelines for Mississippi:
- Your company name must contain the phrase “Limited Liability Company” or any of its abbreviations (L.L.C. or L.L.C.)
- Your company should not include words or phrases that might make the public confuse your company with a government agency such as F.B.I., State Department, NASA, Treasury. Examples of such restricted words include Bank, University, and Attorney.
- If you want to make use of restricted words like Attorney, Bank and the rest, you will need more paperwork as well as a licensed individual such as a lawyer or doctor to be members of your L.L.C.
- You can check if the name you intend to use is available by carrying a search business
So also, you must make sure that the name you want to use is not already taken. You can be check if the name is unique by searing the name on the State of Mississippi Website. Also, make sure your business can use its name as a web domain. Even though creating a business website is not on your plan, it is best you purchase the URL to stop others from using it.
After you have registered a domain name, consider creating a professional email account. A professional email that makes use of your domain name is vital to establishing trust between your business and its customers. In this modern era, where scam is on a high, companies need to make use of a professional email address to provide a sense of professionalism and credibility
Please note that you don’t have to use your LLC’s official legal name registered in your Certificate of Formation when you do business out in the real world. You can use a fictitious business name instead, also called a “DBA” (short for doing business as), trade name, or assumed name. You can register a fictitious name with the Mississippi Secretary of State by filing a Fictitious Business Name Registration form using its online filing system. The filing fee is $25. Registration is not mandatory, but is recommended.
Step 2: Appoint a Registered Agent
Next, you are required to choose a registered agent for your L.L.C. A Resident Agent is the person or company who receives your LLC’s documents, notices and legal mail (called Service of Process). Because of this, the Resident Agent must have an actual street address in Mississippi (PO boxes are not allowed by the state). Picture your registered agent as your company representative to the state.
It is important to note that not everyone can be a registered agent. For a person to be eligible to become a registered agent, the person or corporation must be a resident of Mississippi. That is to say, the individual or corporation must have a physical address within the state. If any member knows the ropes of being a registered agent, you may elect him or her rather than hiring one. This will help you save some dollars, especially if you are running a small business. However, hiring a seasoned registered agent offers tons of benefits like privacy and peace of mind.
Please note that you, your friend or family members or a commercial resident agent are qualified to be your LLC’s Resident Agent.
Please note that, every Mississippi LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be a Mississippi resident or a Mississippi or foreign corporation authorized to do business in Mississippi. The registered agent must have a physical street address in Mississippi.
Step 3: File a Certificate of Formation
A Mississippi LLC is created by filing a Certificate of Formation with the Mississippi Secretary of State. The certificate must include:
- the LLC’s name, including the designator LLC or L.C.C.
- the LLC’s email address (this can be a personal email address)
- the LLC’s future effective date–leave blank if you want your LLC to be effective upon filing the Certificate of Formation; the future date can be up to 90 days after filing the Certificate
- the NAICS code used to identify the LLC’s line of business
- the name and address of the LLC’s registered agent, and
- the signature of a member, manager, or organizer.
All Mississippi LLC filings must be completed using the Mississippi Secretary of State’s online filing system. You must register online with the system (create a username and password) and then you can either complete a Certificate of Formation and pay for it online, or you can print one out, complete it in hard copy, and mail it in with a check (processing takes three to five days). The filing fee is $50.
Step 4: Prepare an Operating Agreement
An LLC operating agreement is not required in Mississippi, but is highly advisable. This is an internal document that establishes how your LLC will be run. It is not filed with the state. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
The bottom line is that, in case your LLC is sued, having an Operating Agreement shows that your LLC is operating properly. This helps maintain your personal liability protection.
The operating agreement should include the following:
- the members’ percentage interests in the LLC
- the members’ rights and responsibilities
- the members’ voting powers
- how profits and losses will be allocated
- rules for holding meetings and taking votes, and
- buyout, or buy-sell, provisions, which determine what happens when a member wants to sell his or her interest, dies, or becomes disabled.
Step 5: Comply With Other Tax and Regulatory Requirements
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses.
Department of Revenue: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Mississippi Department of Revenue (DOR). You can register online using the DOR’s Taxpayer Access Point (TAP).
Step 6: File Annual Reports
In is important to state that all LLCs doing business in Mississippi must file an annual report once every calendar year with the Mississippi Secretary of State. The report can be filed any time on or after January 1st of each calendar year and is due by April 15th of that year.
Mississippi LLCs must file the report online. You must have a state-issued Business ID Number to file the report. You can find the ID number by doing a business name search on the Secretary of State business name database. There is no filing fee for Mississippi LLCs. The filing fee for foreign LLCs is $250.
Step 7: Securing Business Licenses and/or Permits
The next step you are expected to take is to secure your business license and permits as the case may be. The type of business licenses and/or permits your LLC will need to legally operate in Mississippi will depend on its location and the industry it is involved in.
Please note that in order to operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don’t be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
To find out more, contact your local agencies in the city, town or county where your LLC is located.
Step 8: Open Your LLC Bank Account
In order to keep your business finances apart from your personal finances, it is advisable that you open a separate bank account for your Mississippi LLC. It will indeed help you maintain your personal liability protection. A separate bank account helps maintain your liability protection and it also makes business accounting and taxes a lot easier.
The items needed to open an account in Mississippi are your approved Articles of Organization, EIN Confirmation Letter from the IRS, and your driver’s license or passport. We also recommend calling the bank ahead of time to find out if additional documents are required.
Tips: Look for free business checking: Call a few banks in Mississippi and take down notes for comparison. Some banks charge monthly maintenance fees for your LLC’s checking accounts, others don’t.
Debit card: A debit card for your LLC will be issued when opening the account.
Credit card: If you want to start building business credit for your Mississippi LLC (or get travel and cashback rewards), you can get a credit card or two for your LLC. We recommend using creditcards.com to find a business credit card.
Step 9: Foreign LLCs Doing Business in Mississippi
To do business in Mississippi, all LLCs organized outside of the state must register with the Mississippi Secretary of State. Foreign LLCs must appoint a registered agent for service of process physically located in Mississippi and attach a certificate of good standing dated within six months of the application filing. To register, file an Application for Registration of Limited Liability Company. The filing fee is $250. Foreign LLCs must complete an Application for Appointment of Registered Agent of a Foreign LLC (filing fee of $25) and file it at the same time. You must register with the Mississippi Secretary of State’s online filing system to access these forms.
Step 10: Hiring of Employees
Of course, registering an LLC means that you will need employees and in order to get it right as regard hiring employees, then you should ensure that you stay on the side of the law and here are some steps you should follow:
- Verify that new employees are able to work in the US
- Report employees as “new hires” to the State
- Provide workers’ compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your workspace
Lastly, ensure that you find out more information from the Mississippi Department of Labor, Licensing, and Regulation website.
Please, note that the information in this article is provided only for general purposes and it is no way a legal advice. No lawyer – client relationship is established or should any such relationship be assumed. For legal advice, please consult with a professional lawyer.
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