Forming a Mississippi LLC requires filing the Certificate of Formation with the Mississippi Secretary of State. However, there are a few extra steps needed to ensure that the filing is correct and the approval can proceed smoothly.
This guide on how to form an LLC in Mississippi will take you through the necessary steps and insights to forming and running an LLC smoothly.
A limited liability company is a way to legally structure your business. It provides liability protection for your personal assets in case the LLC is sued. At the same time, it offers excellent flexibility and ease of doing business.
Let’s get started with forming an LLC in MS.
1. Picking A Name For the MS LLC
Picking the right name is a seemingly simple, yet very important step for your Mississippi LLC. The chosen name should be unique and distinguishable upon record. This means that the name you pick cannot be the same as, or confusingly similar to the name of an entity already registered with the state.
A quick way to check for availability is to search for the desired name on the Business Search page on the MS Secretary of State website. This should give you a good idea of name availability.
Mississippi LLC Name Designators
Every LLC name in Mississippi must end with a proper designator. As you probably know already, LLC is the most common designator, though the following can be used too:
- Limited Liability Company
Name Reservation Request (Optional)
You may choose to reserve a name for your LLC without actually forming the company. This requires filing an Application for Name Reservation with the Mississippi Secretary of State. Once approved, the reservation is valid for 180 days. Reservation requests cost $25 and can be filed online.
2. Registered Agent For Mississippi LLC
Every Mississippi LLC must maintain a Registered Agent in the state for receiving service of process. This is a person or entity that agrees to receive legal documents like lawsuits, summons, etc. on behalf of your LLC. The agent might also serve as a general point of contact.
Mississippi requires that the Registered Agent have a physical street address in the state. PO Box addresses aren’t accepted. Ideally, the agent should maintain normal business hours in case the service of process arrives.
Your Mississippi LLC registered agent can be:
- Any adult who is a legal resident of the state.
- A business that maintains an office in Mississippi and is allowed to do business in the state.
The second option includes Commercial Registered Agents. Several people pick commercial agents simply because the setup is more reliable and easier to use.
3. Mississippi Certificate Of Formation
A Mississippi LLC is formed by filing the Certificate of Formation with the Secretary of State. The LLC comes into existence once it is approved by the MS SoS.
It’s possible to file the documents online or via postal mail. Either way, a major chunk of the process is completed online.
To start, you’ll have to visit the MS Secretary of State website and register for a (free) account. Once your account is ready, you can start the process of filing the document.
If you prefer to file online, continue with the process and pay the filing fee of $50. Online filings are approved immediately.
To file via mail, once the information is entered, look for the button titled “Print Document and Mail-in with Check”. This will download a pdf for the Certificate of Formation on your computer. You can print this document and mail it to the Secretary of State along with a check for the $50 filing fee. The mailing address is:
Secretary of State
PO Box 136
Jackson, MS 39205-0136
The check should be made payable to “Mississippi Secretary of State”. Processing and approval of Certificate of Formation sent via mail usually takes 3-5 business days.
Once approved, you’ll receive a stamped and approved copy of the submitted Certificate of Formation. This will also include your Business ID Number. An official certificate and receipt will also be a part of the approval documents.
4. Operating Agreement For LLC in Mississippi
When you create an LLC in Mississippi, you should also consider getting an Operating Agreement. This is not a legal requirement for your LLC, but it remains highly advisable. Whether you have a single-member or multi-member LLC, you should get an Operating Agreement.
This is an internal document for you LLC and doesn’t have to be filed with any government agency. However, its presence indicates that the LLC is being operated correctly and professionally.
The agreement can be as detailed or specific as you prefer. It can define the general functioning and approach of the MS LLC to various business requirements. Things like taxation and hiring policies can be a part of this document. You may also include information on the voting rights of members, the percentage of the LLC owned by each member, their roles and responsibilities, and a lot more.
5. Federal Tax ID (EIN)
It is useful to get a federal tax ID for your LLC. The EIN (Employer Identification Number) is a nine-digit number issued by the IRS. You should file for the EIN only after you’ve gone through the process to set up the MS LLC. That is, the Certificate of Formation should have been accepted by the MS Secretary of State before you file for the EIN.
There is no filing fee for the EIN. You can file online and receive the number almost immediately. Those who cannot file online will have to download and file Form SS-4. You can file this form via fax for faster processing (4-7 business days). On the other hand, processing for forms sent via mail can take 4-8 weeks.
Having an EIN is important for tax purposes. You may also need it for other business requirements like opening a business bank account, getting a phone line, getting a business credit card, hiring employees, and so on.
6. Mississippi LLC Annual Reports
Every LLC in Mississippi must file annual reports with the state. The reports must be filed online, though there is no filing fee. Annual reports are due every year following the year of the formation of the LLC.
For example, if the LLC was formed on February 12, 2020, the first Annual Report is due on April 15, 2021. After this, the reports must be filed every year by April 15.
Annual Reports can be filed using the Mississippi Secretary of State website.
7. Business Licenses, Taxation, And Permits
These factors require consideration of three jurisdictions: local, state, and federal. The city/county of your business location may require specific licenses and permits for operation. Besides, the industry of your LLC may also require some licenses or permits.
It is fairly easy to look for business license and permit requirements by going through the Mississippi Business OneStop Shop (BOSS) portal. You should also look at the directory of state and county officials to see what licensing and permit requirements are necessary.
Depending on the business and industry of the MS LLC, the state may impose some taxes. You’ll have to register with the Mississippi Department of Revenue for information on taxation.
For federal taxation, LLCs are pass-through entities by default. This means the profits can be reported as part of your personal returns with the IRS. However, it’s also possible to have your Mississippi LLC taxed as a C-corp or S-corp. Depending on the structure you choose, the tax requirements can change drastically.
Careful planning of taxation and staying on with the requirements for licenses and permits are necessary for your LLC. You can take the DIY route, though hiring the services of a professional is likely to be more convenient.