How to create an LLC in Mississippi in 6 easy steps - Types and FAQs

Mississippi LLCs are created by submitting articles of incorporation to the Mississippi Secretary of State. To form a corporation, you must use the online filing system and pay the $50 filing cost through the Mississippi Secretary of State website. Your new corporation becomes legally constituted under Mississippi law as soon as the relevant articles are filed.

Once the Mississippi Secretary of State has processed your documents, you will receive a response email, often within 24 hours. Although the articles of incorporation may contain a variety of clauses, a few are necessary, such as the business’s name, addresses and incorporators' names, agent and registered office, and stock arrangement.

The different kinds of LLCs that you can create in Mississippi are as follows.

Single Member LLCs

A one-member LLC is controlled by the member who is in charge of the company. The member normally files a personal income tax return each year and declares the LLC's profits and losses as though they were their own.

Multi-member LLC

A multi-member LLC comprises two or more members who each have a share in the company's management. The current members of the company, who still have the authority to make business decisions, can administer it as members. Or, members can designate the Mississippi LLC as manager-managed and appoint a single outside management or team of managers to oversee the day-to-day operations of the company.

Professional LLC

If a service offered by an LLC may only be performed by licensed professionals, a professional LLC (PLLC) may be created in Mississippi. CPAs (certified public accountants), dentists, architects, veterinarians, doctors, and attorneys are a few examples. Creating a PLLC enables qualified individuals to run a flexible business while safeguarding their personal assets.

How to start an LLC in Mississippi:

Choosing a name for your corporation.

You can only choose a name that isn’t in use by another Mississippi-based organization. A list of available corporation names can be found in the Secretary of State's online database. You can hold onto the name of your corporation for 180 days by submitting your application to the Secretary of State.

There are a few prerequisites for the name you select. It must distinguish itself from other corporations or enterprises permitted to conduct business in the state of Mississippi and must contain the terms "limited," "company," "incorporated," or "corporation," or their equivalent acronyms.

Specify who the incorporators are.

An organization or person that signs and submits the articles of incorporation is known as an incorporator. You must adhere to the following rules while choosing incorporators:

• A single or multiple incorporators are allowed to sign the articles of incorporation by law.
• A Mississippi resident or a stockholder of the business must be designated as an incorporator.
• Each incorporator's name and address must appear in the articles of incorporation.
• If the corporation's directors are not specified in the articles of incorporation, they must be chosen by the incorporators. Bylaws and appointment officers may also be approved. Once the directors have been chosen, these incorporators' obligations are over.

Specify who the directors are.

The corporate directors are in charge of running the company and delegating work to the committees and officers. They have a responsibility to make choices that benefit the business and its stockholders.

The board of directors may consist of one or more members. The bylaws or articles of incorporation should specify the precise number of directors, even though there is no legal restriction on the total number of people who may serve in that capacity.

In the articles or bylaws, you can also specify the requirements for a director's eligibility.

Specify who the registered agent is and where the registered office is.

Mississippi LLCs are required to keep a registered office and agent. Legal notices and papers are delivered to the registered agent on behalf of the corporation. The agent's place of business is their office. It would be best if you keep the following in mind while choosing the registered agent for your corporation:

• List the office's address as well as the registered agent's name who works there.
• Name a Mississippi-based agent or a business with a physical location there. The registered office and corporate address may be the same.
• Choose an agent who operates during the usual business hours.

Create bylaws

The operating policies and internal organization of a corporation are governed by its bylaws. The number and duration of directors' terms, shareholder voting procedures, and any other rules governing the corporation's management are often covered by bylaws.

The directors must agree on the bylaws, and they must be kept on file at the corporate office even though they are not filed with the Secretary of State. They shouldn't contain clauses that go against the law or the articles of incorporation.

Obtain an EIN

For the most part, businesses must contact the Internal Revenue Service to request an EIN, which stands for Employer Identification Number or Tax ID number. Similar to a Social Security Number, this number serves to identify your company for federal tax purposes. It only applies to businesses. You might need an EIN to create a business bank account or recruit staff. Luckily, getting one is quick and cost-free. You can obtain an EIN by visiting the IRS website.

File your annual reports

In Mississippi, LLCs must submit annual reports via the Secretary of State's online Business Services. You must submit this report by April 15 of each calendar year. However, it may be filed at any time after January 1st. Select the relevant button under "Business Filings" after logging in. The online form will already contain the data that is already in their system after you enter the Mississippi business ID number for your LLC.

Taxes you need to file for your LLC in Mississippi:

State Business Tax

For all state business taxes, online registration is possible. To set up a new tax account for your LLC in Mississippi, go to the Department of Revenue's website.

State Employer Tax

If your LLC has employees, you must register with the Revenue Department for withholding tax and deduct state income tax from employee salaries. Additionally, you must file, record, register, and pay the unemployment insurance tax for your Mississippi LLC.

Sales and Use Taxes

Unless it is exempted or its rate is decreased by state law, your LLC must pay the 7% sales tax in Mississippi if it sells tangible personal property. Before starting any Mississippi sales tax-exempt business, your LLC must get permission or a registration license from the Department of Revenue.

Your LLC is also liable for the state use tax if it obtains any personal property for use, storage, or consumption inside Mississippi that has not already had use or sales tax paid to another state at a rate that is equal to Mississippi's.

Additional permits and licenses

You should get more licenses and permits depending on the kind of business your LLC runs and where it is located. Suppose your LLC in Mississippi deals with the sale of alcohol, tobacco, or food, that has an impact on the environment or provides a professional service.

In that case, you might need particular permits or licenses. There are several other federal, state, and municipal licenses and permits that you might require. To find out what is needed locally, check with the municipal or county government where your company is located.

Additionally, the website of the Mississippi Small Business Development Center provides additional tools and data for state-based companies.

FAQs

Can you apply for an LLC online?

Applying for an LLC is possible online. In Mississippi, you must submit your online LLC application through the Secretary of State's Business Services. To register your new LLC and log into the filing system, you must generate a username and password. Additionally, you have the choice to have your LLC formed in Mississippi by a business formation service provider.

Will you need a Certificate of Formation to create an LLC in Mississippi?

For your LLC to be recognized as legal in Mississippi, you must submit a Certificate of Formation. You can use this document to create bank accounts and merchant accounts and apply for funding for your LLC when the secretary of state grants approval of your LLC formation and your certificate is duly filed.

You should keep the certificate from your original filing around for your records. Additionally, the Secretary of State's Business Services website allows you to request a certified duplicate of your certificate. A certified document costs ten dollars in Mississippi.

Is a Certificate of Good Standing required for your Mississippi LLC?

A Certificate of Good Standing attests to your LLC's lawful formation in Mississippi and compliance with all relevant state laws. To open a commercial bank account, register your LLC as an international LLC in another state, and apply for financing for your company, you frequently need this certificate. Simply log in to the Secretary of State's Business Services website and request the Certificate of Good Standing. By entering the certificate's number on the Secretary of State's website, you may also confirm the validity of your certificate.

How to manage your LLC in Mississippi?

Once your LLC has been duly established with the Secretary of State, you must abide by the state's laws to keep your business operating legally. Annual reports must be submitted by April 15th of each year.

The Mississippi Department of Revenue is where you must register, file, and pay any needed business taxes. You must also pay your federal taxes on time.

Additionally, you should update any company licenses and permits that your LLC needs to keep current in order to operate.

How to dissolve your LLC in Mississippi?

In Mississippi, you must obtain a Certificate of Dissolution and pay a $50 filing fee in order to dissolve your LLC. Use the Business Services filing facility to submit this electronically. The Secretary of State's approval of your file will determine the effective date of your LLC's dissolution if you fail to indicate an effective date.

Can you form an anonymous LLC in Mississippi?

On the formation documents, an anonymous LLC omits information about the LLC owners. The Certificate of Formation is filed as a public record in Mississippi, which does not allow the creation of anonymous LLCs.

In order to protect their anonymity, business owners frequently use anonymous LLCs. You can employ a registered agent service if you're worried about privacy because Mississippi does not permit anonymous LLCs.

Conclusion

As with a corporation, you are using an LLC for your start-up business offers liability protection to owners or members. Owners of an LLC are often not personally liable for the company's debts and obligations because the LLC is a separate legal entity.

If your Mississippi business is run as a sole proprietorship, a lawsuit may result in losing your personal assets. LLCs also provide flexibility. There is no rigidity in the managerial structure. The owners or members of the company can manage it, or external management can oversee business operations.

Additionally, LLC owners benefit from tax-related freedom for their companies. Gains, losses, income, credits, deductions, and other tax items that accrue to the LLC pass through to the member(s), who report them on individual tax returns. For these benefits, you should consider forming an LLC in Mississippi.