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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.
To avoid a misstep in the filing process, follow these steps to start an LLC in Mississippi, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Find more information on starting an LLC here.
Starting an LLC in Mississippi step-by-step
1. Select a name for your Mississippi LLC
Follow naming requirements
There are 2 major guidelines to follow when naming your LLC in the state of Mississippi:
- An LLC’s name must be distinguishable from the names of existing businesses on file with the Mississippi Secretary of State.
- An LLC’s name must either contain the phrase “Limited Liability Company” or one of the abbreviations “L.L.C.” or “LLC”.
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.
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 certificate filing date)
- NAICS code corresponding to the LLC’s type of business
- LLC organizer, member, or manager’s signature
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:
- Comply with state LLC naming guidelines and confirm the LLC name’s availability using the Secretary of State Business Search.
- Appoint a Mississippi registered agent.
- File an Application for Registration of Limited Liability Company using the Mississippi Secretary of State online filing system. The filing fee is $250.
4. Draft 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:
- Describe the LLC’s business structure
- Establish the individual responsibilities and obligations of LLC members
- 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 Mississippi LLC’s additional 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.
Filing 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 be of some help in pointing 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.
Register with the Mississippi Department of Revenue
Your Mississippi LLC may be required to 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.
Mississippi LLC checklist
A Mississippi LLC’s name must conform to the following rules:
- Must be distinguishable from the names of existing businesses on file with the Mississippi Secretary of State.
- Must contain the phrase “Limited Liability Company” or one of the abbreviations “L.L.C.” or “LLC”.
Formational documents and filing fees:
- Application for Name Reservation – $25 filing fee
- Certificate of Formation – $50 filing fee
- Application for Registration of Limited Liability Company – $250 filing fee (foreign LLCs only)
- An LLC is created in Mississippi through the filing of a Certificate of Formation with the Mississippi Secretary of State.
Additional legal obligations:
- File Annual Reports – Required of all LLCs doing business in Mississippi
- Obtain state and local business licenses & permits – Required for certain LLCs
- Mississippi DOR registration – Required for certain types of LLCs