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 Missouri.
Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Missouri startup fees here.
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Overall Missouri LLC Formation Costs
LLC Name Reservation Fee
Reserving a business name is totally optional. It’s not a required step in LLC formation. Although, if you have a great name but you’re still ironing out some details before starting your business, a name reservation can help. It costs $25 to place a 60-day hold on your name, and you can renew this hold twice for $25 each time. That said, skip this step if you’re ready to file your Articles of Organization since that will lock in your name automatically.
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.
Whether you reserve your business name or not, you should always perform a Missouri business name search to make sure the name you want is available.
Articles of Organization Fee
This is the big one, the most important form that you’ll file to start your Missouri LLC. It’s the one that makes your business official with the state and allows you to commence business in the state. File the Articles of Organization either online for $50 or using a paper form for $105. Once you file this form and payment, you won’t have to do it again, so this won’t be a recurring fee.
The information you’ll need to file your Articles of Organization includes the official business name of your LLC, the purpose of your LLC, the name and address of your registered agent, whether your company is managed by its members or a manager, the duration of your LLC, the names and addresses of your LLC’s organizers, an indication that your LLC is a series (if applicable), your LLC’s principal office address, the effective date of your LLC formation, the date, your name, and your signature.
For what it’s worth, a Missouri series LLC uses the same Articles of Organization form. The only difference is the series LLC will need to indicate this status in Section 7.
Business and Professional Licenses
Once your Articles of Organization has been accepted, there’s one more thing to do before commencing business: licensure. Depending on the type and location of your business, it may require multiple professional licenses. Or, it might not need any. Find out which state licenses your LLC needs on the Missouri Professional Registration & Licensing page. You’ll also need to check with your local government because cities and/or counties sometimes have their own licensing requirements.
What are some of the most commonly required business licenses for Missouri 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 in Missouri 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 a Missouri LLC registration service. These services take care of the registration process for you, so you don’t have to spend time on research, paperwork, and filings.
Most of these services (like ZenBusiness and IncFile) offer basic LLC formation services 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.
Registered Agent Service
Appointing a Missouri 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 Missouri 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.
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. There’s a multitude of business lawyers out there, so choosing just one might seem like a daunting task. Using a site like Avvo can take that stress away, though. It gives you free access to an entire database of Missouri business attorneys — locations, rates, areas of expertise, and contact info, so you can compare, contrast, and 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 Missouri. 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 Missouri. All foreign business entities are required to foreign qualify in Missouri, or they could incur some pretty severe penalties. To foreign qualify, you will submit an “Application for Registration” instead of the Articles of Organization. You can find it through the online filing portal, and you can submit it entirely online for $50 or print a copy and mail it for $105. Like the Articles of Organization, it’s a one-time filing, so this fee won’t be recurring.
LLC Annual Fees
Many states collect mandatory annual reports from their business entities every year, but not Missouri. You won’t have to worry about recurring reports or fees, although you will need to make sure you keep the state updated on any changes to your LLC, including changes in registered agent, registered office, or other areas.
LLC taxes aren’t especially complicated in Missouri either. LLCs are, by default, classified as “pass-through” entities by the federal government, so they don’t file separate corporate tax returns. Instead, the owners and/or members report income and losses on their own personal returns. At the state level, Missouri doesn’t require a franchise tax or privilege tax like some other states do.
It would be nice if it were that easy, but there are certain circumstances that will require your LLC to pay specific business-related taxes. If you sell merchandise, you’ll have to pay a sales and/or use tax, and if you hire employees, a withholding tax and an unemployment tax. Register for these taxes through the Missouri Department of Revenue online system, or by completing and mailing a hard copy.
Or, if you’ve set up your LLC to be taxed as a corporation, it will be responsible for paying Missouri’s corporate income tax of 6.25%.
What if I Don’t Pay?
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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.
While LLCs aren’t required to file annual reports, there are still penalties for failing to file other forms and keep your company information updated. For example, you must keep the Secretary of State updated on changes to your registered agent or registered office. If you don’t, your LLC will lose its good standing with the state, which means you cannot foreign qualify in most other states, apply for business loans, renew professional licenses, and more. Spend too long without reconciling your good standing and your business can be administratively dissolved by the state and prohibited from conducting business in Missouri.
Failure to pay taxes on time will also lead to penalties, both monetary fines and loss of good standing, but the fine severity depends on the type of tax and how late it is. The Department of Revenue’s “Additions to Tax and Interest Calculator” will help you determine how much you might owe.
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 Missouri.
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 any recurring fees — like business-related taxes — so your business doesn’t fall out of good standing.
Key Steps for Starting a Missouri LLC
- The first step to forming a Missouri 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.
- Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in Missouri, 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.
- The third step involves the preparation and filing of your Articles of Organization. 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!
- 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. Missouri legally requires all LLCs to have an operating agreement, and it’s 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.
- 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.
- Next, you’ll need to register for any relevant taxes with the Missouri 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 Missouri!
Key Steps for Maintaining a Missouri 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.
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 Missouri.
What are the state business tax rates in Missouri?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 0% and 5.4%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay Missouri’s 6.25% corporate income tax on your business revenue.
How quickly does Missouri process LLC formations?
The Secretary of State should be able to process your LLC’s formation within 3-5 business days if submitted on paper, and they’re often able to process online formations the same day you file them.
How many small businesses are there in Missouri today?
The state of Missouri is home to nearly 465,000 small businesses. Entrepreneurs of all backgrounds and business types find that Missouri is a great place to own and operate a small business.
What are the top small business resources and websites in Missouri?
The Missouri chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Missouri LLCs. The U.S. Small Business Administration’s Missouri District Office is another valuable resource, and the state’s Department of Economic Development also has plenty of good info.
Should I form my LLC in Missouri, 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.