Mississippi might not be the first place you think of when it comes to an influx of promising new startups. However, the state is quietly becoming the premier destination for a growing number of new businesses, including up-and-coming tech brands. A combination of government support, college cooperation and ideal tax incentives make forming a Mississippi limited liability company (LLC) highly desirable.
In this guide, we’ll walk you through how to start an LLC in Mississippi so you can launch your new business in no time.
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Before Filing LLC Paperwork
While the LLC formation process is straightforward, you will have to take a few preliminary steps prior to the filing phase. Below are such items to handle before moving forward with setting up your Mississippi LLC.
Get a Registered Agent
By law, every LLC operating in Mississippi must have a registered agent. This person or business entity is designated to accept important legal or tax documents on behalf of your company. It is legally okay to act as your own agent or appoint an LLC member to the role. For anyone electing to act as their own LLC’s registered agent, note that you must be at least 18 and have a physical address within Mississippi.
It is understandable if you prefer to hire one of the many professional registered agents in the area to do so for you. The price for hiring a registered agent ranges between $50 and $300.
Hold Your Mississippi LLC’s Business Name in Advance
There are no guarantees, and it is entirely possible that the business name you wish to use is already taken. Use the Secretary of State’s business search engine to find out for sure whether this is the case.
If the name you want is available, or you selected a suitable alternative, you can hold it for your exclusive use by filing a Name Reservations form. The filing fee is $25.
File Your Mississippi LLC Documents Online
Thanks to Mississippi’s modern and streamlined approach to business filings, you will need to create an account and log in to the Secretary of State’s website to move forward with your LLC filings. The cost to file a Certificate of Formation is $50. Foreign entities, meanwhile, should expect to pay a $250 filing fee.
After Forming Your LLC in Mississippi
Thanks to the Mississippi government’s modern and fast approach to business formations, you should expect to have your LLC approved within a few days. However, that is not the end of the story. Once you establish your Mississippi business, there are other details to handle, which will be discussed in the following sections.
Complete Your Annual Report
By Mississippi law, LLCs must complete annual reports to keep their businesses in good standing. You should submit these forms, which must be filed online, anytime between January 1 and April 15. While there are no annual fees, failure to submit your documents on time could result in the dissolution of your LLC.
Get an Employer Identification Number (EIN)
EINs are a requirement for most businesses, with single-member LLCs as a notable exception. Those businesses can operate using Social Security numbers. Just the same, an EIN is an ideal alternative to an SSN, as it provides an identity for your brand without sacrificing privacy and risking exposure to fraud. EINs are free and available on the IRS website.
If Applicable, Pay Your Taxes
Mississippi, along with many states, does not require standard LLCs to pay separate taxes. Most LLCs are treated as “pass-through entities,” with members claiming the business on their personal taxes. This is different from corporations, in that only single-member LLCs don’t need to file a separate return. The exceptions are LLCs that the owners or members choose to treat as corporations for taxation purposes.
Create an LLC Operating Agreement
It is true that Mississippi doesn’t require LLCs to write up an operating agreement. However, it is a good idea. First, a detailed operating agreement explains member obligations and roles, including financial expectations. Second, having an agreement will offer clarity from the beginning and prevent confusion and most conflicts later on. Lastly, an operating agreement lends legitimacy to your LLC, helping maintain its good standing.
LLC State Guides
Frequently Asked Questions
What is an LLC?
An LLC balances the relative ease and flexibility of a partnership or sole proprietorship structure with the increased risk protection of a corporate structure. Like corporate shareholders, LLC owners (known as “members”) enjoy limited liability, meaning personal liability to the company includes only what members have invested and does not extend beyond it to cover corporate losses or debts.
By default, members of an LLC pay taxes as a share of personal income just as owners of a sole proprietorship or general partnership would—this is often referred to as a “pass-through” tax structure. An LLC can elect to be taxed as a C corporation C-corp or S corporation (S-corp) if it meets certain requirements. Many small business owners choose LLCs for their simplicity and flexibility.
What are the benefits of filing an LLC?
Many entrepreneurs set up LLCs because they are often more affordable than corporations with some liability protection. For instance, LLC finances are treated as separate from individual assets. They’re also typically treated as pass-through tax entities, allowing you to claim them on your taxes. The exceptions are LLCs whose members choose to be taxed as corporations.
How do I complete LLC filings in Mississippi?
LLC forms are filed using the Secretary of State’s website. You must register to complete the process.
How much do Mississippi LLCs cost?
Domestic entities pay $50 to form LLCs in Mississippi, meanwhile, foreign entities get charged $250.
Do Mississippi LLCs complete an annual report?
Yes, an LLC in Mississippi must submit yearly reports. The deadline is April 15, but there is no annual fee.
Are Mississippi LLCs obligated to pay taxes?
Mississippi LLCs are typically taxed as pass-through entities and not separately. The exceptions are those LLCs formed and treated as corporations, in which case, they are responsible for paying a franchise tax, which is $2.50 per $1,000 of the capital employed in the state.
What kind of tax flexibility does an LLC provide?
LLCs can be taxed as sole proprietorships, partnerships, C corporations (C-corps) or S corporations (S-corps). This choice allows members of an LLC to minimize their tax burden.
