Want to learn how to form an LLC in Mississippi? Well, you’ve chosen a great business entity.
For business entities with two or more founding members, forming a Limited Liability Company is the best option for several reasons. An LLC offers business owners legal protection by separating business funds from personal ones. Moreover, entrepreneurs usually enjoy a lower tax rate compared to corporations.
If you are looking to form an LLC in Mississippi, this detailed step-by-step guide will walk you through everything you need!
Pick a Name for Your Mississippi LLC
Choosing a company name is vital to building your business recognition. Be sure to choose a name that communicates what you intend to sell and aligns with your LLC’s mission. It’s a good idea if you keep it memorable and short, too.
You also need to make sure your name meets the general naming requirements and guidelines for an LLC in Mississippi. These include the following:
- Your chosen LLC name should include the entity type. All Mississippi LLCs should contain the phrase “Limited Liability Company” or an acronym thereof (“L.L.C” or “LLC”).
- The LLC name must be unique and distinct from the names of other LLCs in Mississippi. The chosen name must also be available in Mississippi. You can check this by doing an LLC name search via the Secretary of State’s Business Services division.
Before settling on the chosen name, we recommend taking a few additional steps to determine if it’s ideal. For instance, you must ensure that your desired LLC name has not already been taken or trademarked by searching for it in the United States Patent and Trademark Office.
Finally, check with a domain registrar to see if a domain name is available for your chosen LLC name.
Hire a Registered Agent
In Mississippi, all LLCs must nominate a registered agent in the initial stages of establishing their business. They should also maintain a registered agent during the lifetime of the LLC’s operation.
A registered agent is an independent contractor or business entity responsible for receiving and forwarding official and legal documents on behalf of the LLC. A Mississippi registered agent must meet the following criteria:
- Be a Mississippi resident with a physical street address
- Be at least 18 years old
- Be available to work during all regular business hours in Mississippi.
Your registered agent can be anyone, including yourself, a family member, a friend, or another LLC member. You can also hire a registered agent company.
Here are the top three picks for the best registered agent service providers in Mississippi:
Northwest offers some of the most affordable and most comprehensive registered agent services. They provide everything you will possibly need or want in a registered agent company. The package includes same-day local scans, pre-filled state forms, free mail forwarding, document scanning and storage, and annual report reminders.
In addition, you will get lifetime support from their customer service team. These experts will assist you in establishing and maintaining your LLC with help that goes beyond the traditional scope of compliance and registered agent.
A year of Northwest registered agent package costs $125. However, the rate drops to $100 if you hire them in five or more states.
ZenBusiness is another reputable and popular name in the registered agent industry. If you are using ZenBusiness’ LLC formation package, it also makes sense to package their registered agent package.
These registered agent services add a layer of protection and privacy to your LLC. With ZenBusiness, everything will be uploaded to a tailored online dashboard for viewing, downloading, and printing anytime.
ZenBusiness charges $199 per year for its services.
IncFile is another top registered agent service provider in Mississippi that has been used by over 500,000 business entities over the last 15+ years.
The standard annual cost of IncFile’s registered agent service is $119, and you will get access to the following tools and services:
- Automatic mail forwarding
- 24/7 online access
- Available to receive legal proceedings and IRS mail correspondence on your behalf
- Intuitive and simple online dashboard
In addition to registered agent services, IncFile is popular for offering other LLC formation services, such as Article of Organization, Operating Agreement, etc.
File Your Article of Organization
The next step after hiring a registered agent is registering your business with the Mississippi Secretary of State.
You can do this by filing your Article of Organization via the Mississippi Business Services Online Filing System. The online filing process takes 1-2 business days, and you will be required to register an account using an active email address and the name of your business. It costs $50 to file online.
Your Article of Organization must include the following information about your LLC:
- The LLC’s effective date
- The LLC’s email address and chosen name
- The name and physical address of the registered agent
- The signatures, names, and address of members
- The NAICS (North American Industry Classification System) code for the business field of your LLC.
Draft an Operating Agreement
Mississippi doesn’t require Limited Liability Companies to create or file an Operating Agreement. However, we recommend drafting one if you have a multi-member LLC, as it puts all members on the same page regarding the operation of the LLC and prevents disputes from arising.
An Operating Agreement provides vital information about your Mississippi LLC, including the following:
- The rights and responsibilities of each member
- Rules for LLC meetings and notes
- Dissolution procedures
- How losses and profits will be split
- How members will settle disputes that may arise within the LLC
- Each member’s ownership percentages
- Rules and policies regarding the admission and removal of members
Creating an Operating Agreement for your Mississippi LLC is straightforward. You only need to download a free operating agreement template online and fill in the required information. Alternatively, you can hire an LLC formation company to create one. Most LLC formation service providers offer operating agreement packages.
Get Licenses and Permits
Your Mississippi LLC’s business licenses and permits depend on your business location and activities.
The primary Mississippi state-wide license is the seller’s permit. It authorizes your business entity to collect taxes. This permit is required by all Mississippi LLCs that sell or lease goods or services that would ordinarily be subjected to sales tax if sold at retail. You can acquire this license via the Mississippi Department of Revenue portal.
You may also require additional licenses to legally operate your LLC within your city or county’s local government regulations. Reach out to your Mississippi county government office for detailed information about the licensing requirements and fees for your specific LLC.
Additionally, LLCs that sell restricted items, such as firearms, tobacco, or alcohol, are required to obtain specific licenses and permits. Your local government office has detailed information about your required permits or licenses.
Acquire a Federal Tax ID
A Federal and State Tax ID, also known as an Employer Identification Number (EIN), works similarly to your Social Security Number to identify your LLC for legal and tax purposes.
All LLCs in Mississippi must acquire an EIN. However, single-member LLCs are not necessarily required to get one unless they want to be taxed as a corporation or plan to hire employees.
Even if your LLC isn’t legally required to obtain an EIN, we recommend acquiring one as it has many benefits. For example, it protects your Social Security Number. You will also need a Federal and State Tax ID to open a business bank and credit account, file taxes, and hire employees in the future.
To acquire a Federal and State Tax ID, simply go to the IRS website and complete the application process, which is straightforward, quick, and free.
Open a Business Bank Account
You must open a separate business bank and credit account to handle all your LLC transactions. This will help verify the liability status of your business entity in case someone sues you or your LLC.
The good news is that opening one is straightforward. You will only be asked to provide your LLC’s Federal and State Tax ID, certificate of organization (article of organization), and an operating agreement. In addition, some banks may require a small deposit to open and maintain your account.
If you don’t know where to start, we try one of the following Mississippi banks:
Purchase Mississippi Business Insurance
Purchasing business insurance for your LLC in Mississippi manages your risk. It can also free up your time and mind to concentrate on growing your business.
The primary business insurance plans for Mississippi LLCs include the following:
- General liability insurance: It protects your Limited Liability Company from injuries on the job, financial losses resulting from damage to the LLC’s property, and legal costs and judgments.
- Workers’ compensation insurance: It covers illnesses and injuries the LLC’s employees may incur on the job. All LLCs with 5+ employees are legally required to purchase a workers’ compensation insurance policy.
- Professional liability insurance: It covers you in case of a mistake or negligence made when performing your job.
- Unemployment insurance: This insurance cover goes towards the employment insurance fund of the state for laid-off workers.
- Commercial automotive insurance: All LLCs with vehicle(s), whether used for personal or commercial purposes, must obtain a commercial automotive insurance policy.
Speed Things Up With an LLC Formation Package
If the steps discussed in this article appear daunting, complex, challenging, and time-consuming, you can purchase an LLC formation package to speed up the process.
Northwest is one of the companies that offers the best and most economical LLC formation packages. For instance, their LLC formation package includes filing your article of organization, creating your operating agreement, granting tax consultation with their Corporate Guides, and providing a business address.
It also includes additional services, like assistance in acquiring an EIN and a certificate of good standing. However, these services come at an extra cost—Northewest’s LLC formation package costs only $225.
ZenBusiness is another company that offers to streamline and speed up your LLC formation process for free with its Basic package. For instance, it will check that the LLC name you want is available, double-check that all the LLC formation documents, like the operating agreement, are correct, and file the LLC article of organization.
Upgrading to ZenBusiness’ Pro LLC formation package gives you access to expedited filing (4-6 business days) and guidance through drafting your operating agreement at only $199. You can also purchase the ZenBusiness Premium package at $299. With it, you will get a rush filing of 1-2 business days, a customized tool to build your website, and a domain name.
FAQs About Forming an LLC in Mississippi
How Long Will It Take to Form My Mississippi LLC?
Unlike other states, you can only form an LLC in Mississippi by filing an article of organization online (mail filing is not accepted). Online filing takes one to two business days, and there are no expedited processing times.
How Much Does It Cost to Set Up an LLC in Mississippi?
The main cost of forming your Mississippi LLC is the $50 state fee for filing the article of organization with the Mississippi Secretary of State. There are also other additional (optional) costs that you may want to cover. For example, you may want to reserve your chosen LLC name for up to 180 days at a fee of $25.
Can I Act as my Own Registered Agent in Mississippi?
Any person can act as a registered agent for their LLC in Mississippi, provided they have a physical address in the state of Mississippi. You must also be available to receive and forward during the traditional business hours.
Can I Form a Single-Member LLC in Mississippi?
Mississippi allows business owners to form single-member LLCs. In fact, for most formation purposes, single-member LLCs in Mississippi are considered the same as multi-member LLCs. The formation steps are similar to those discussed in this article.
Hopefully, you have everything you need to form an LLC in Mississippi. Don’t worry if you find the process complex or time-consuming, you can use a reputable LLC formation service provider to speed it up.
As your business entity grows, you must demonstrate your LLC’s good standing to customers, banks, and state agencies. So, after forming your LLC, remember to file annual reports!