Mississippi LLC Foreign Qualification: Here’s What to do

What happens if I fail to foreign qualify before doing business in Mississippi?

Foreign qualifying is essentially asking permission to do business in the state of Mississippi. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Mississippi yields consequences that are far costlier than registering in the first place.

If you fail to foreign qualify, your business will be prohibited from enacting or maintaining an action or proceeding in Mississippi court. Plus, the Attorney General may cut you off from doing business in the state and assign the Secretary of State as your registered agent.

The prospect of losing your LLC’s income and legal footing isn’t a particularly encouraging one, so it’s best to foreign qualify as soon as you begin doing business. Despite these penalties, your existing contracts in Mississippi would still be considered valid, and you would still be able to defend a proceeding or lawsuit in court.

The Mississippi LLC Act, Section § 79-29-1013 provides further insight into potential penalties.

What is considered “doing business” in Mississippi?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Mississippi? The state’s LLC Act doesn’t give specifics on what this phrase means, but other state and tax laws tell us that you are considered to be “doing business” in most states and required to foreign qualify if:

• Your LLC operates offices, warehouses, or stores, or has another physical presence in the state.
• Your LLC has salespeople, agents, or representatives doing business on its behalf in the state.

Then there are LLC taxes. While LLCs are typically pass-through entities, depending on how you’ve structured your business, you might need to pay certain corporate taxes. By foreign qualifying in Mississippi, you’re notifying the state of your tax status. If they don’t know to apply any particular taxes, you may end up with more severe fines in the future. For additional information on Mississippi taxes, visit the Department of Revenue website. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.

If you’re unsure whether or not you need to file for a foreign qualification in Mississippi, we suggest seeking legal counsel.

Could I be exempt from foreign qualifying in Mississippi?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Mississippi. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

• Maintaining, defending, or settling a lawsuit in a Mississippi court
• Holding LLC member and/or manager meetings, or other activities solely concerning internal affairs
• Maintaining bank accounts
• Holding offices/agencies for the transfer and/or exchange of the LLC’s own securities
• Selling products or services through independent contractors
• Collecting debts, or creating and/or acquiring indebtedness
• Owning real or personal property in Mississippi
• A single transaction – isolated from other business activity – taking place within 30 days
• Transacting business in interstate commerce

Do your business activities in Mississippi appear on this list? Are they the only business activities you execute there? Then you’re most likely off the hook with foreign qualification. However, it’s a good idea to glance over the full list in the state’s LLC Act and seek legal advice if you’re unsure.

How to Foreign Qualify Your LLC in Mississippi

Foreign qualification in Mississippi is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Mississippi, you will need to do so online, as the Secretary of State no longer accepts paper documents. Here’s how.

• Go to the online filing system
• Log in or create an account
• Under the “Name Reservation and Formation Filings” section, select the option to register an out-of-state business
• Follow the on-screen prompts to enter your business information
• Choose your payment option (see below)

At the end of your online form, you will see a screen that asks you to select a payment method for the $250 fee. You can either pay online with a credit/debit card, or you can print out your document and mail it, with a check, to:

Mississippi Secretary of State

P.O. Box 136

Jackson, MS 39205-0136

One more thing: you’ll also need to submit a Certificate of Good Standing from the state where your LLC was formed, dated within 60 days of your filing. Contact your home state’s government to obtain one.

Since the whole process is electronic, the processing time is fairly quick, typically 24 hours, so your LLC should be registered in Mississippi soon!

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification and you’re embarking on another chapter in the life of your business.

Name Requirements to Remember

Before you hit send on that application, double-check to make sure that your LLC name follows Mississippi’s business naming requirements. You wouldn’t want your name to cause a hitch in the foreign qualification process. As a reminder, your LLC name must:

• Contain the words “limited liability company,” or the abbreviations “L.L.C.” or “LLC”
• Not use any of the following:  “bank,” “banker,” “bankers,” “banking,” “trust company,” “insurance,” “trust,” “corporation,” “incorporated,” “partnership,” or “limited partnership” without permission
• Be completely distinguishable from all other names on record with the Mississippi Secretary of State (perform a Mississippi LLC name search to make sure the name you want is available)

You can also reserve your Mississippi business name if you’re not quite ready to foreign qualify your LLC.

Should I hire a service to file my Mississippi foreign LLC?

Considering all the work that goes into expanding your business to a new state, you’ve likely got a lot on your plate. Rather than trying to juggle everything yourself, you can bring on an individual or company to help you secure your LLC’s Mississippi foreign qualification.

For example, business attorneys understand all the legal nuances involved, providing peace of mind that the job will get done correctly. But if you go this route, be sure you have the budget for it. Lawyer fees for Mississippi foreign LLC qualifications can be a prohibitively expensive option for businesses operating on tight budgets.

If you’re operating on a limited budget, but still want to have your Mississippi foreign LLC professionally registered, go with an online business service provider. There are plenty of reputable companies that can help you out with Mississippi foreign qualifications, but here are a couple of our favorites:

• MyCompanyWorks ($99): MyCompanyWorks is one of the only service providers offering foreign qualifications for less than $100. This company receives excellent customer reviews and has a great track record of success, making it a smart choice for a wide range of entrepreneurs.
• IncFile ($149): IncFile offers a free LLC formation service that we have always appreciated, and its pricing for foreign qualifications is a reasonable $149. IncFile has the best customer feedback reputation in the industry, with tens of thousands of positive reviews available online.
• Northwest Registered Agent ($225): Northwest is more of a premium service, with the best customer support in the industry, in our opinion. They also include a year of their namesake registered agent service with every foreign qualification. There’s a reason Northwest is our #1 pick among the best registered agent services!

Need to save time?

Let’s face it, there’s never enough time in the day, especially when you’re running a company. And properly registering your LLC in Mississippi involves research and time, time that you could be using to continue growing your business.

If the thought of paperwork, fees and state correspondence makes your head spin, consider using a service like Northwest Registered Agent to foreign qualify your business. Services like Northwest ensure that your forms are filed correctly and on time, potentially saving you thousands of dollars in penalties, not to mention a bunch of time and stress.