How to form a limited liability company or a nonprofit in Missouri

Do you want to start your own company? As a founder, deciding on a business entity is the most important decision you need to make when starting a new company.

Usually, forming a limited liability company is the best option for businesses with more than one founding member. An LLC or a limited liability company is a simple business structure providing personal asset protection to business owners. Business owners should consider forming a limited liability company if they wish to limit their liability for business debts and lawsuits.

How to start an LLC in Missouri

Formation of an LLC in Missouri requires following a few simple steps.

Choose a name for your LLC.

The first and foremost important step to forming an LLC is to choose a suitable name for your company. You can select any name of your preference as long as it is distinguishable from any other business entity in the state.

Ideally, it should be brief, memorable, and relevant to what you do. Furthermore, your company name should contain the phrase "Limited Liability Company," "Limited Company," or the abbreviations: LLC, L.L.C, or LC.

Missouri law requires that your company name not contain words that could be confused with a government agency or restricted words like bank or university. You may need additional paperwork and a licensed person like a lawyer or doctor to be a part of the LLC.

You can search the Missouri Secretary of State's Website to check if your preferred company name is available or already taken by another business entity.

Get a registered agent in Missouri.

To form an LLC in Missouri, you must appoint a registered agent for your LLC. A registered agent agrees to accept legal documents, necessary tax forms, lawsuit notices, and official government correspondence on behalf of the LLC and forwards the same to the owners.

A registered agent must be a Missouri resident or a corporation authorized to do business in Missouri. You can choose an employee or member of your LLC or an organization, such as a registered agent service, who can serve as your registered agent.

The registered agent must have a physical street address in Missouri and be available in person during regular business hours.

File Missouri Articles of Organization

You must file the Articles of Organization with the Secretary of State to register your Missouri LLC. Articles of Organization is a legal document that establishes your Missouri LLC formally. You can file online or by mail, with a $50 filing fee for online registrations and a $150 filing fee for paper filings.

Your Articles of Organization must include the following information:

• The name of the LLC,
• The purpose of forming an LLC,
• The registered agent's name and address
• Outline how your LLC is managed,
• The intended duration of your LLC, which can be indefinite
• The organizers' names and addresses (your members)
• The type of LLC you're establishing
• The date of filing
• Signature of the organizer

Prepare a Missouri LLC operating agreement.

An operating agreement is a legal document that outlines an LLC's ownership and operating procedures. It primarily defines the members' rights, powers, duties, liabilities, and obligations to one another and the LLC.

Missouri's LLC law requires all members of an LLC to sign a written operating agreement. It helps to bring all business owners on the same page and reduces the chances of future conflicts.

Obtain an EIN

EIN, or Employee Identification Number, is a nine-digit number given to businesses by the Internal Revenue Service (IRS) for tax purposes. It identifies your business to the state and federal tax authorities.

You will require an EIN to hire employees, open a business bank account, and file and manage federal and state taxes.

An EIN is also known as a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). Businesses can obtain this number for free by applying on the IRS website online or by mail.

Understand the tax requirements for LLCs in Missouri

After your LLC in Missouri is established, you must register for state taxes. An LLC that hires employees must register with the Missouri Department of Labor to assess the payroll taxes.

Furthermore, businesses selling products like tobacco, gasoline, and liquor or engaging in activities like gambling are subject to additional taxes. You can check the Missouri Department of Revenue for tax forms based on your LLC structure and movement.

Obtain business licenses for your LLC.

In Missouri, business licenses are administered by the county and municipal governments. Confirm with your county or city clerk's office the license requirements for your LLC as per the location.

How to start a nonprofit corporation in Missouri

Nonprofits are usually established for religious, charity, scientific, literary, or educational purposes. These are classified as 501(c)(3) organizations and exempt from federal and state taxes.

Choose a name for your Missouri Nonprofit Organization.

Choosing a name for your nonprofit is the first step in establishing it in Missouri. Your Missouri nonprofit name must be distinguishable from other registered nonprofits and must include words like "corporation," "company," "incorporated," or "limited," Alternatively, you can use the abbreviations like Corp., Co., Inc., or Ltd.

Select incorporators and directors for your nonprofit organization in Missouri

The incorporators and directors for your nonprofit organization are in charge of its management and oversight.

A nonprofit organization in Missouri must have at least one incorporator aged 18 or above. An incorporator's name and address must be provided on the paperwork. Incorporators are responsible for signing and delivering the Articles of Incorporation and other vital documents.

The board of directors of a Missouri nonprofit organization may include a president and/or chairperson, secretary, and treasurer. A single person may hold multiple offices, but at least three directors are required. They are the organization's governing body, writing bylaws and frequently voting on significant decisions.

Choose a registered agent.

Every nonprofit organization operating in Missouri must have a registered agent that accepts essential legal documents on behalf of the organization and forwards the same to its founders.

A registered agent must be a Missouri resident or a registered agent service authorized to do business in the state. Additionally, the registered agent must have a physical street address in Missouri. You may even appoint someone from your organization, including yourself.

File Articles of Incorporation in Missouri

To legally establish your nonprofit corporation in Missouri, the Articles of Incorporation is the first legal document you must file with the state.

The document requires mentioning the following information:

• The name of your nonprofit organization,
• The names and addresses of your incorporator and registered agent,
• Whether the organization intends to have members or not
• The purpose of forming the nonprofit organization
• Statement of asset allocation in the event of dissolution of the nonprofit organization

The Articles of Incorporation can be filed online or by mail at $25.

File your Initial Report

A nonprofit organization must submit an initial report to the Secretary of State in Missouri. Your nonprofit can risk being dissolved if the information is presented on time, i.e., by the end of the month the nonprofit was formed.

The filing fee is $20 if filed online and $45 if filed on paper. An additional $15 is charged every 30 days for late reports.

Obtain an Employer Identification Number

Employer Identification Number, or an EIN, is a nine-digit number that enables you to carry out essential tasks like opening a business bank account, hiring employees, or applying for 501(c)(3) status.

An EIN, also known as the Federal Tax Identification Number (FTIN) or Federal Employee Identification Number (FEIN), can be obtained by submitting Form SS-4 for free on the IRS website online or by mail.

Establish bylaws for your nonprofit organization in Missouri

Bylaws are rules that outline how a nonprofit organization will operate. It includes the rules and procedures the corporation will follow while holding meetings, appointing officers and directors, and handling other corporate formalities. Bylaws serve as the internal operating guide for the corporation and are not required to file with the Missouri Secretary of State.

Obtain State Tax Identification Number

After the nonprofit is registered, the Secretary of State issues a State Identification Number or a charter number. It can be used to open a bank account and pay contractors, receive donations, save money, etc.

To open a bank account, you will require the following documents:

• The address and contact information of your nonprofit corporation
• Articles of Incorporation and bylaws
• EIN
• Your nonprofit's charter number
• An initial deposit

Apply for tax exemptions

You must apply for federal and state tax exemptions to establish a 501(c)(3) exempt nonprofit.

501(c)(3) tax exemption: Submit Form 1023 to the IRS on Pay.gov. You will need to pay $275. Also, submit IRS Form 990 annually to ensure compliance.

State tax exemption: Submit Form 1746 from the Missouri Department of Revenue to request a state tax exemption. You will need to provide information like the state tax identification number, EIN, type of exemption, contact information, etc.

Get the necessary licenses.

Licenses and permits for nonprofit corporations vary depending on the location and the business activities. In addition to federal and state license permits, additional permissions may be required to carry out some nonprofit activities like selling beverages like wine or beer at a fundraising event or gambling.

Closing Thoughts

Formation of a company in Missouri is one of the most critical decisions to make as a founder. In addition to understanding the company's purpose and deciding its management and operations, a founder must also understand the legal steps involved.

These steps include choosing an appropriate name for the company, filing the necessary paperwork, appointing a registered agent, opening a business bank account, understanding federal and state taxes, obtaining business licenses, etc. Following the steps can help founders establish a limited liability company or start a nonprofit in Missouri.