A limited liability company (LLC) is an excellent way to structure your business. It limits your personal liability, while at the same time providing flexibility and lack of formalities. This quick guide on how to form an LLC in Missouri will take you through the necessary steps involved.
At the very basic level, setting up a Missouri LLC requires filing Articles of Organization with the Missouri Secretary of State. However, there are a few other steps to ensure that the filing goes smoothly and there are no setbacks and rejections.
We’ll also consider a few necessities and recommendations for the smooth operation of your MO LLC. So let’s get to creating the LLC to kickstart your entrepreneurial ambitions.
1. The Name Of Your Missouri LLC
A name is what identifies your LLC to the public and the government as well. As such, there are a few requirements for setting up the LLC name.
The name you choose should be unique and distinguishable from other entities registered with the state. This is an important requirement because minor changes to the name of a previously registered entity won’t be allowed.
Also, the LLC name can’t be a misrepresentation or a similar strategy that could confuse the public. It shouldn’t take on the name of a government department/organization either, so FBI LLC or Department of Agriculture LLC stay unavailable. The state may prevent/restrict the usage of some words due to several reasons, including preventing vulgarity and profanity.
One quick way to check name availability is by searching the entity database on the Missouri Secretary of State website. This will give you a fairly good idea of the availability of a name. Like almost all other states, these search results are considered preliminary and may not necessarily reflect the availability or possibility of use of a name.
Appropriate Business Entity Designations
Any limited liability company must have a proper designator identifying it as such. Accepted designators include:
- Limited Liability Company
- Limited Company
If in doubt, remember that LLC is the most commonly used designator.
Reserve A Name For Your MO LLC (Optional)
Missouri offers the possibility of reserving a name for your company without fully forming your LLC. This serves several purposes, including keeping the name while you make preparations to start a business. It might be useful in confirming a name for your company without having to file the Articles of Organization.
Name Reservations for Missouri entities are possible online or via mail. If you choose the latter, you’ll have to file Form BE1 Application for Reservation of Name with the Corporations Division. The filing fee is $25.
Once accepted, the reservation is valid for 60 days. You can submit the form again after this period to extend the name reservation. Nevertheless, the maximum allowed time for name reservations is 180 days.
2. Appointing A Registered Agent For The MO LLC
Every Missouri LLC must have a registered agent to receive service of process in the state. A registered agent is a person or entity who agrees to receive the service of process on behalf of your LLC. This includes legal documents like lawsuits, summons, subpoenas, etc. Conventional communication too may be directed to the registered agent.
Your Missouri LLC Registered Agent:
- Must have a physical street address in the state (PO Box addresses and mailbox services aren’t accepted).
- If the registered agent is a person, they must be legal residents of the state and adults.
- If the registered agent is an entity, they must be legally allowed to do business in the state.
Ideally, the registered agent should maintain normal business hours so they can receive service of process without a hitch.
You, your friends or family members, or a business entity can function as the registered agents provided the above conditions are met.
Many businesses choose to employ commercial registered agent services. This is a simple and straightforward solution that ensures that all requirements and functions of registered agents are met. It costs more than being the registered agent yourself (or having your friends/family do it), but professional services do hold an edge.
3. Starting An LLC In Missouri – Articles Of Organization
Filing Articles Of Organization with the Missouri Secretary of State is the key step in starting an LLC in Missouri. Technically, your Missouri LLC comes into existence the day it is approved by the Secretary of State.
Your Missouri LLC filing can be submitted online or via mail. Filing online is often the recommended option as it costs relatively lower on the filing fee. Processing times are also faster for applications submitted online.
To file Articles of Organization for a Missouri LLC online, you can use the Secretary of State’s online filing portal. In case you don’t already have an account, you’ll get the opportunity to create one for free.
This is a useful option as you can use the same portal to get more information on your LLC even after it is registered. Other functions too can be performed through the portal.
Online filing fee for Missouri LLC is $50. Payments made using credit cards may attract a charge of $1.25.
The filing fee for this form is $105 and a money order or check to that amount should be included with the form when submitting it. The check/money order should be made payable to the “Secretary of State”.
Mail the completed form and payment to:
PO Box 778
600 W. Main Street, Room 322
Jefferson City, MO 65102
Once your LLC is approved, you’ll receive a copy of the Articles of Organization submitted by you, a Certificate of Organization, and a receipt for the payment.
4. Missouri LLC Operating Agreement
Missouri law requires all LLCs in the state to form and adopt an Operating Agreement. Though this is an internal document that isn’t filed with any government agency, its importance cannot be overstated.
An operating agreement shows that your LLC is being operated correctly and in accordance with the requirements. It also provides a clear direction and administrative vision for the company.
The agreement can include various aspects of operation like the rights, powers, liabilities, responsibilities, etc. of individual members. It may also include the percentage of the LLC that is owned by each member. Approach to taxation, hiring, and other operational features might be included as well.
While it’s extremely important for multi-member LLCs, single-member MO LLCs too should get an operating agreement in place.
5. EIN Or Federal Tax ID
Getting a federal tax ID or EIN (Employer Identification Number) is important for the functioning of your LLC. Any LLC with more than one member must get an EIN, even if it has no employees.
To get an EIN, you must register with the IRS. The filing is free and quick. For multi-member LLCs, the IRS will need the information of only one member, who will become the responsible party for communication with the department.
The easiest way to get the EIN is to file for it online.
If you don’t have an SSN or if the LLC is owned by another company/entity, it may not be possible to file online for the EIN. In these cases, you can download and fill Form SS-4. This form can be filed via mail or fax.
If you apply for the EIN online, the processing is near-instantaneous. You’ll likely receive the 9-digit EIN right after submitting the application. A copy will be mailed to the responsible party within 4-5 weeks.
Submissions made via fax will be processed within 4-7 business days. Mail is quite literally snail mail in this context. It can take 4-8 weeks to process your EIN application received through mail.
An EIN is necessary for several operational aspects of your business. This includes opening a bank account, hiring employees, getting credit cards, and a lot more.
Remember, you should apply for an EIN only after your Missouri LLC has been approved by the Secretary of State.
6. No Annual Reports For Missouri LLCs
Missouri doesn’t require LLCs to file annual reports. It’s a huge convenience as it reduces the formalities required to keep your LLC in operation.
Do note, this doesn’t mean that the LLC doesn’t have to pay taxes or handle permits, etc. This is an entirely different requirement.
7. Licenses, Permits, And Taxation
Once your LLC is ready for business, you’ll have to consider taxation and licensing requirements on local, state, and federal levels. Licensing and permit requirements can vary and often depend on the industry and location of your company.
The license and permit requirements of the city/county of your business form a major part of the operation. Additional state regulations and permits may be required depending on the industry of your company.
State taxation can include requirements like sales tax, and Missouri Corporate Net Income Tax, amongst others. Businesses should get a state taxpayer identification number from the state department of revenue. Your LLC should be registered with the IRS and have an EIN before you go for Missouri Business Tax Registration.
Similarly, you’ll have to consider federal taxes as well. Federal taxation for LLCs is pass through by default. That means the profits from the operation of the Missouri LLC can be reported as part of your personal returns with the IRS.
However, it’s also possible to have your LLC be taxed as a C-Corp or S-corp. In these cases, the tax requirements can change. The decision requires careful tax planning on your part and ensuring you stay in compliance with federal, state, and local laws.
Many LLCs choose to hire professionals to manage their licenses, permits, and taxation requirements. It might be a good idea to use their services if you’re entirely confident of handling things all by yourself.