Think about your LLC a year from now: raking in profits and taking Mississippi by storm. You 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.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Mississippi startup fees here.
Bare Minimum Cost to Start an LLC in Mississippi
- Optional: LLC Name Reservation Fee
- $25, online only
- 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.
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.
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 state’s professional licensing page and with your local government to see which (if any) licenses your LLC needs.
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 LLC formation 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 offer basic LLC formation service like Certificate of Formation 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.
IncFile and LegalZoom are two of the most popular LLC formation services that offer reasonable prices. IncFile’s pricing starts at $49 while LegalZoom’s starts at $99. If you’d like to compare their services, and see why we prefer IncFile overall, check out our in depth comparison guide.
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 and on-time, 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 if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
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 $500-2000.
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.
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.
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.