If you’re looking for a reliable DIY guide for starting an LLC in Mississippi, look no further. Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an LLC formation service – they’ll take care of the paperwork so you can spend more time growing your business.
Recommended: Compare the Top LLC Services
If you’re new to the process of starting an LLC, you might also be unfamiliar with the LLC formation services that are reliable and offer great value – like ZenBusiness. As a reference point we compared them to the two most well known LLC formation services, IncFile and LegalZoom. See our comparison guides for more information:
Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your Mississippi LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain state requirements that it must follow.
Before you use a name on any important documents, confirm that it complies with Mississippi’s naming rules. They state that an LLC name must contain the words “limited liability company,” or the abbreviation “L.L.C.” or “LLC,” and not use any of the following: “bank,” “banker,” “bankers,” “banking,” “trust company,” “insurance,” “trust,” “corporation,” “incorporated,” “partnership,” or “limited partnership.” All good? Lastly, and most importantly, your name must be distinguishable from all others reserved or registered with the Secretary of State.
But what makes a name distinguishable? If your name is unavailable, altering the following elements will NOT typically cut it:
- Punctuation and special characters
- Articles (“a,” “an,” and “the”)
- Conjunctions (like “and,” “but,” and “or”)
- Business type designators like “LLC,” “Inc.,” or “LP”
Consider this: your friend Fanny wants to open a flower shop in Jackson, Mississippi. The name she wants, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Secretary of State’s records.
Determine the Name is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Certificate of Formation without first confirming it’s available. Use the Secretary of State’s Business Search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Mississippi for a total of 120 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold by using the Secretary of State’s online filing system. You will need to create an account if you haven’t already done so. Once logged in, click “Reserve a Business Name” and follow the onscreen instructions.
The name reservation is an incredibly helpful tool if you aren’t quite ready to start your business. However, if your LLC is ready to go, you can save time and money by simply including your desired name on your Certificate of Formation instead. This will automatically register it.
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in Mississippi, she’ll need a go-between for state and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. But maintaining an agent isn’t just a convenience, it’s required. According to the Mississippi code, every LLC “must continuously maintain in this state: a registered office, which may be the same as any of its places of business; and a registered agent for service of process.”
Taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside Mississippi.
Now for the practical application, the “how-to.” Designating a registered agent is a simple, one-step process. All you need to do is list the agent’s name and address on your Certificate of Formation, and that information will become part of your LLC’s public record. Be sure to confirm the appointment with your desired agent beforehand.
You have two options for who can serve as a registered agent: an individual or a company.
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. Anyone can serve as your registered agent, as long as they live and have a physical address in Mississippi. Common choices are LLC members, attorneys, accountants, friends, or family members. You can even serve as your own LLC’s agent, provided you meet these requirements.
Registered Agent Service
It can be a lot easier, though, to use an LLC formation service like IncFile or Northwest Registered Agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your Mississippi LLC on your own, you can use a national registered agent service to cover your agent duties.
During the life of your LLC you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.
Step 3: File the Formation Documents with the State
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name, designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Certificate of Formation. This filing creates a record for Fanny’s Florals and Design, LLC with the MIssissippi Secretary of State, giving it authorization to commence business in the state.
Apologies to paper document enthusiasts, because you can only file the Certificate of Formation online. The good news is that the process is quick and simple – you can take care of everything through the state’s online filing system. If you don’t already have an account, you’ll need to create one. After logging in, select “Form a Mississippi Corporation, Non-Profit, LLC or Partnership” from the “Name Reservation and Formation Filings” section and you’ll be on your way.
The filing fee is $50 and your filing will be processed immediately, so as soon as you’re done, your LLC will be authorized to do business in Mississippi.
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
Mississippi LLCs aren’t technically required to adopt operating agreements. But regardless of what the state says, operating agreements are vital to an LLC’s success and stability. They don’t just create customized processes – they also protect your personal assets and give your company credibility in the eyes of courts, banks, government agencies, and other businesses. You should think long and hard before doing business without one.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend getting one through ZenBusiness, which includes a free LLC operating agreement with every package. This will save you a lot of time and money.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Certificate of Formation, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a Mississippi LLC running smoothly and in good standing with the state.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
Like federal taxes, Mississippi LLC owners report business income and losses on their personal returns rather than filing a separate business return. Plus, the state doesn’t require its LLCs to pay a “franchise” or “privilege” tax, so your state tax situation will be fairly simple.
But you’re not in the clear yet. If your LLC meets certain conditions, it may still need to pay specific business taxes. For example, if you sell any merchandise, your LLC will owe a Sales Tax and/or Use Tax through the Department of Revenue’s Taxpayer Access Point. Or, if you hire employees, your LLC will be responsible for an Unemployment Tax through the Mississippi Department of Employment Security.
Plus, depending on your LLC’s location, it may owe a local tax to the city, municipality, or county where it resides. Consult your local government’s website to find out.
The Certificate of Formation may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
Consider our friend Fanny, who may need to obtain a Nursery License from the Department of Agriculture before opening her flower shop. Likewise, your LLC might need professional licensure to do business in Mississippi. Take a look at the MS.gov Professional Licensing page to find out.
And for information on other licenses that you may need, read through the Secretary of State’s business entities informational document.
Certain cities and counties require their own specific licenses on top of any state ones, so you should also check with your local government.
Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when you’re rolling along and things are moving 100 miles per hour, don’t forget that Mississippi requires all of its businesses to submit one important recurring filing: the Annual Report.
Every year, your LLC will need to file an Annual Report between January 1 and April 15. This is to ensure that the state maintains current and accurate business records. Mark April 15 on your calendar, because the state will administratively dissolve any LLC that fails to file.
The good news is that there is Annual Report filing fee, so just file online and you’re good to go for the next year!
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Mississippi LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
Need Help Creating Your LLC?
If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.
But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC formation service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.
Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered agent.
Sound good? Whether you know that you’ll need an LLC service or you’re just exploring your options, take a look at IncFile and Northwest Registered Agent. These are two of the top services available. And you can take our word for it because we’ve done a whole lot of research on the topic.