How to Start an LLC in Mississippi (Step-by-Step Guide)

When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

The process of forming an LLC in Mississippi is more or less the same as in other states, with the exception of the fact that the state uses the term “Certificate of Formation” rather than the more common “Articles of Organization” when referring to an LLC’s organizing document.

Starting an LLC in Mississippi step-by-step

1. Select a name for your Mississippi LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the state of Mississippi:

1. An LLC’s name must be distinguishable from the names of existing businesses on file with the Mississippi Secretary of State.
2. An LLC’s name must either contain the phrase “Limited Liability Company” or one of the abbreviations “L.L.C.” or “LLC”.

Need help coming up with a business name? Check out our free business name generator.

Check the LLC name’s availability

Confirm that the name you have selected for your LLC is available in Mississippi by using the Secretary of State Business Search.

Reserve your LLC name with the Secretary of State

After deciding on a name for your LLC, you may reserve it with the Mississippi Secretary of State for up to 180 days by filing an Application for Name Reservation online (requires account registration) and paying the $25 reservation fee. This protects the name from being taken by another Mississippi business entity until you are ready to file a Certificate of Formation and officially form your LLC in the state.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Mississippi requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Mississippi OR if the individual or business is based out-of-state, they must have a business office in Mississippi.

You can also use a registered agent service. Essentially, you appoint a business to serve as your registered agent. When documents are received, they’re scanned into a personalized portal, and you’re notified of it. For some owners, using a professional service gives them peace of mind. They know someone is always available to accept documents during business hours, and it’s more private than listing yourself or a coworker.

3. File a Certificate of Formation

An LLC is formed in Mississippi by filing a Certificate of Formation with the Mississippi Secretary of State. Filing a Certificate of Formation in Mississippi requires you to register with their online filing system. Once you’ve registered, you can either file the certificate online or print a copy out and mail it to the SOS office. The filing fee is $50.

Your Mississippi LLC’s Certificate of Formation must provide the following details:

• LLC’s name and email address
• Registered agent’s name and address
• LLC’s future effective date, if applicable (can be up to 90 days after the certificate filing date)
• NAICS code corresponding to the LLC’s type of business
• LLC organizer, member, or manager’s signature

You must submit your formation documents online, along with your fee (paid by credit card), and await approval from the state. Approval times vary but are usually between 3 to 5 days.

If you’re not approved, it’s usually because of an error on your paperwork. Perhaps you left a field blank, or perhaps the business name you submitted is already being used by another company in Mississippi. Remember, two businesses can’t have the same name. Check name availability before you submit your registration forms.

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Mississippi, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

1. Describe the LLC’s business structure
2. Establish the individual responsibilities and obligations of LLC members
3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File Annual Reports

All LLCs active in Mississippi are required to file an Annual Report with the Secretary of State every year. Reports must be filed online before April 15 each year. An LLC’s Business ID number is necessary to complete the report and can be found using the Mississippi Secretary of State Business Search.

There is no annual report filing fee for LLCs formed in Mississippi. However, foreign LLCs doing business in the state must pay a filing fee of $250 when submitting a report.

Obtain business licenses and/or permits

A Mississippi LLC may be required to acquire one or more state or locally-issued business licenses or permits depending on the nature of its business and the location of its principal office. Unlike other states, Mississippi does not offer a convenient website covering state occupational license and permit information; however, the Secretary of State’s Mississippi Boss: Business One Stop Shop website can help point you in the direction of necessary licenses and permits.

Another option is contacting a city clerk in the municipality where your LLC is based is another way to become informed about state and local licensing requirements.

Understand state taxes

One of the perks of setting up an LLC as a business structure is that you’re not taxed as a corporation. Corporations face double taxation, with business revenue taxed and then taxed again as personal income. LLCs don’t pay corporate taxes. Instead, business income passes to an owner’s personal tax report, where he or she pays personal income taxes on it. Simply put, LLCs are taxed once, and it’s via a personal tax return.

Mississippi tax rates: While you may need the help of a small business accountant to file both federal taxes and state taxes, it’s important to know the tax rates in Mississippi. Here are the tax rates in Mississippi state:

• Mississippi has a flat 5% individual income tax.
• Mississippi has a 7% state sales tax rate and a max local sales tax rate of 1%.

Register with the Mississippi Department of Revenue: Your Mississippi LLC should register with the state’s Department of Revenue, particularly if you collect sales tax on retail goods or have employees. You can register with the Mississippi DOR online by creating an account with Mississippi’s Taxpayer Access Point.

File BOI Report

In 2024, all new LLCs must file a BOI Report, or Beneficial Ownership Report, with the Federal Crimes Enforcement Network. As a way to thwart financial crimes, this report gives authorities the names and contact information of business owners. With this information, authorities can work to catch criminals committing financial crimes like money laundering.

LLC owners must file the report within 90 days of establishing their new LLC.

Learn more about BOI reporting.

Post LLC tasks

Open business bank accounts

Business bank accounts are a necessity. You don’t want to co-mingle your accounts. Personal income and expenses should stay in your personal account, while sales generated from the business or business expenses should all flow through a business account.

Why you should keep separate accounts: As an LLC, you’re granted limited liability protection, which means your personal assets are protected if your business is sued or goes bankrupt. If this happens, your personal assets, like your savings and house, can’t be used to bail out the business. However, protecting your cash assets is hard if your finances are mixed and you can’t decipher between personal and business finances.

In addition, you should open business bank accounts to:

• Maintain a professional company
• Check on your company’s financial health easily
• Establish a financial history for your company

Consider financial institutions: Start exploring your business banking options. While you can open a basic checking account that allows you to pay deposit money and bills online, other options give you business-friendly features. Look into these business bank ideas: Found, Relay, and Mercury

Launch a business website and social channels

Use a website builder to publish a business website. Think through what you’d like on your site and how you’d like customers to navigate it. When you’re ready to take action, follow these steps to launch a business website:

1. Search for and purchase a domain name.
2. Obtain web hosting.
3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
4. Customize your site to your customers, adding appropriate pages, content, and images.
5. If you’re selling goods, add an e-commerce section to your site.
6. Review and test your site.
7. Publish it.

Website reporting: Aside from setting up your site’s main pages and establishing a store, take some time to familiarize yourself with the site’s reporting features. If you need more data, consider Google Analytics. To gauge the effectiveness of your site, you’ll need strong metrics, so get in the habit of monitoring your stats early.

Connect social channels to your site: With a website up and running, set up social media channels next. Select one or two channels that you plan to use. The channels you select should be ones your target audience uses, and your handle should correlate to your business name.

Costs to set up an LLC

Average cost to set up an LLC in Mississippi: $50-$250

Whether you’re investing your own savings, received a grant, or borrowed money to start your company, you want to invest those funds wisely. Part of being financially responsible is exploring your LLC costs. Initial set-up costs should be calculated and will include:

• Incorporation costs: You’ll pay a filing fee to register your new LLC with the state. Mississippi has one of the most affordable filing fees at $50, but it’s important to factor that cost into your startup needs.
• Filing fee for the Annual Report: Usually, there’s a filing fee associated with the yearly submission of an Annual Report, but Mississippi doesn’t charge business owners to file it.
• Registered agent service fees (optional): If you choose to, you can hire a registered agent service to serve as your company’s point of contact for official documents like tax notices or service of process paperwork. If you decide in favor of using this service, expect to pay an annual fee between $50 to $200.

Foreign LLCs doing business in Mississippi

An LLC formed outside of Mississippi intending to do business in the state must first register with the Mississippi Secretary of State.

Follow these steps to legally do business in Mississippi as a foreign LLC:

1. Comply with state LLC naming guidelines and confirm the LLC name’s availability using the Secretary of State Business Search.
2. Appoint a Mississippi registered agent.
3. File an Application for Registration of Limited Liability Company using the Mississippi Secretary of State online filing system. The filing fee is $250.
   • Along with the application, you must provide a Certificate of Good Standing from the LLC’s home state. The certificate must be dated from 6 months or less of its filing with the Secretary of State.