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Mississippi LLC CostYou have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.

And we’re not talking about renting office space or paying employees  before you sell a single product, there are startup costs associated with launching an LLC in Mississippi.

Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common startup fees here.

Bare Minimum Cost to Start an LLC in Mississippi

Optional: LLC Name Reservation Fee

    • $25, online only

Optional: LLC Formation Service

    • $39 for an LLC service like ZenBusiness and $79 for LegalZoom

Required: Certificate of Formation Fee

    • $50, online only

Overall Mississippi LLC Formation Costs

LLC Name Reservation Fee

After long hours of brainstorming, you’ve come up with the perfect name for your business, and you want to make sure that no one else takes it. A name reservation might be right for you. Reserving a business name isn’t a mandatory part of the LLC formation process, so this is optional. If you’re ready to file your Certificate of Formation right away, you’ll save time and money by making that your first step. But if you’re not ready to start your business quite yet, you can pay $25 to reserve your name for 180 days.

To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.

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Certificate of Formation Fee

This is the big one, the most important form that you’ll file to start your Mississippi LLC. The Certificate of Formation is what officially starts your business and puts it on record with the state. It must be filed online and includes a $50 filing fee. As long as your submission is accepted, you won’t need to file this form or pay this fee again.

The information you’ll need to file your Certificate of Formation includes your LLC’s official business name, your email address, the effective date of your LLC formation, your LLC’s North American Industry Classification System (NAICS) number, the name and address of your registered agent, and your name, title, and signature.

If you would rather get some help for this step, you’re in luck! There are plenty of reputable LLC formation services that will prepare and file your Certificate of Formation on your behalf. You have plenty of options for this service, but we prefer ZenBusiness. They offer great low rates and well-rounded services, and with our exclusive discount code, you can get 20% off!

Business and Professional Licenses

Even after your Certificate of Formation is processed, your LLC might still need certain licenses from the state or local government before commencing business. For example, CPAs must apply for licensure with the State Board of Public Accountancy. In addition, cities and/or counties often have their own local business licensure requirements. The cost of these licenses depends on the type. Check with the state’s professional licensing page and with your local government to see which (if any) licenses your LLC needs.

What are some of the most commonly required business licenses for Mississippi LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.

LLC Formation Service

Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an online service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.

Most of these services (like LegalZoom and ZenBusiness) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, operating agreements, and expedited filing.

There are many different companies offering LLC formation services these days, and it can be tricky to tell which one is the right choice for your needs. We think ZenBusiness and IncFile are the two best LLC formation companies, and we wouldn’t hesitate to recommend either of them to our families and friends.

Registered Agent Service

Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Mississippi business law. In short, you need an agent you can trust.

While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently, saving you from the penalties of delinquent filings and the stress of having to do it yourself.

Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but there are plenty of options.

Attorney Fees

If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.

Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2,000.

Cost variations depend on the experience and location of the lawyer. This might seem like an intimidating decision since there are so many qualified lawyers out there. But using a site like Avvo, which provides access to an entire database so you can sort Mississippi business attorneys by rate, location, specialty, and more, will help you find the perfect fit for your LLC.

If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in Mississippi. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.

Foreign Qualification Fee

This only applies if your LLC was formed in another state and is now expanding into Mississippi. Is this you? If so, submit an “Application for Registration” instead of the Certificate of Formation.

All foreign business entities are required to foreign qualify in Mississippi, or they could incur some pretty severe penalties. Like Mississippi’s other filings, the Application for Registration can only be submitted online, and it costs $250. It’s pricier than the Certificate of Formation, but it’s similarly a one-time filing, so you’ll only pay that $250 once.

LLC Annual Fees

After forming your LLC, you’re required to file an annual report for it every year between Jan. 1 and Apr. 15. This is to ensure that the state can keep your most updated information on file. The good news is that there’s no filing fee for annual reports.

The information required to file your annual report includes your LLC’s Mississippi business ID number, your LLC’s email address and phone number, your federal tax ID number (EIN), your North American Industry Classification System (NAICS) code, an indication that your LLC does or does not have an operating agreement, your LLC’s principal business address, the names and addresses of your LLC’s members and/or managers, and your title, name, address, and signature.

For more info on annual reports for Mississippi LLCs, check out our full article on this topic!

Taxes

LLCs operating in Mississippi don’t have to worry about federal or state income taxes. Because they’re classified as “pass-through” entities, LLCs do not have to file separate corporate tax returns; their owners and/or members report income and losses on their personal returns.

There are circumstances, however, that would require your LLC to pay particular business-related taxes to the state. For example, if you sell merchandise, you’ll need to pay a sales tax (register here), and if you hire employees, you’ll need to pay a withholding and unemployment tax (register here).

Or, if you’ve set up your LLC to be taxed as a corporation, it will be responsible for a corporate income tax of 3-5%, depending on its income, and a franchise tax of $2.50 per $1,000 of its capital or assessed property value in the state. For more information on corporate taxes, see the Department of Revenue’s FAQ page.

What if I Don’t Pay?

Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.

Failure to submit necessary filings and fees, primarily the annual report, may result in administrative dissolution. If dissolved, your LLC will no longer be able to conduct business in Mississippi until it has reconciled its outstanding documents/fees and filed for reinstatement. Further, businesses that have not been dissolved but have missing filings lose their good standing with the state, which means they cannot foreign qualify in most other states, apply for business loans, renew some professional licenses, or make new filings.

If you fail to pay your taxes on time, it can lead to some serious late fees, although the exact amount depends on the type of tax and how much you owe. Check out the Department of Revenue Business Tax page for more on specific tax types. Overall, though, staying ahead of your filings and taxes saves you a bunch of time, money, and stress down the road.

Planning Your Expenses

By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Mississippi.

Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees — like annual reports — so your business doesn’t fall out of good standing.

Key Steps for Starting a Mississippi LLC

  1. The first step to forming a Mississippi LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
  2. Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in Mississippi, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
  3. The third step involves the preparation and filing of your Certificate of Formation. You’ll need to fill out the paperwork and pay a $50 fee. Once the state processes this document, your LLC will be officially open for business!
  4. That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for Mississippi LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
  5. You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
  6. Next, you’ll need to register for any relevant taxes with the Mississippi Department of Revenue, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.

Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of Mississippi!

Key Steps for Maintaining a Mississippi LLC

After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.

You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.

As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.

The Top 3 Mississippi LLC Services

If you want to hire a reputable LLC formation service to handle the heavy lifting on your behalf, these are the three companies we trust and rely on the most.

  • ZenBusiness ($39) – ZenBusiness offers a well-rounded LLC formation package at a great low rate. Their standard LLC package includes a full year of registered agent service, an accounting assessment, and a customizable operating agreement. ZenBusiness also receives stellar customer feedback.
  • IncFile (FREE) – That’s not a typo! IncFile really does form LLCs for free. Even better, they include 12 months of registered agent service in their free package. IncFile has a ton of experience and more than 500,000 satisfied customers, so they’re always a reliable choice.
  • Northwest Registered Agent ($225) – Northwest offers a bit more of a premium service, but if you have the money, we think it’s worth it. Like ZenBusiness and IncFile, Northwest also includes a year of registered agent service with the purchase of any LLC formation package. They also offer the best customer support in this industry, with knowledgeable representatives who are familiar with the details of business formation processes in every state.

Frequently Asked Questions

Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in Mississippi.

What are the state business tax rates in Mississippi?

Regardless of whether your LLC is categorized as a corporation or a general partnership/sole proprietorship, Mississippi has the same income tax rates. You’ll pay 0% on your first $3,000 of income, 3% on the next $2,000, 4% on the next $5,000, and 5% on all income over $10,000.

How quickly does Mississippi process LLC formations?

Because all business filings in Mississippi are filed online, this state has very efficient turnaround times. The Secretary of State should be able to process your formation in just a day or two.

How many small businesses are there in Mississippi today?

The state of Mississippi is home to nearly 200,000 small businesses. Entrepreneurs of all backgrounds and business types find that Mississippi is a great place to own and operate a small business.

What are the top small business resources and websites in Mississippi?

The Mississippi chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Mississippi LLCs. The U.S. Small Business Administration’s Mississippi District Office is another valuable resource, and the Mississippi Development Authority also has plenty of good info.

Should I form my LLC in Mississippi, or choose a state like Delaware or Wyoming?

Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.

However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.