Want to start an LLC in Mississippi but don’t know how? This article will provide all the information you need.
Once you finish reading our guide, you’ll know:
- What you need to do to start a Mississippi LLC
- Other tasks you should handle after registering your LLC
- How long it takes and how much it costs
You don’t have to be an expert to start an LLC. Just follow the steps we’ve outlined below!
Start your LLC the easy way
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Once you have finished reading our guide, we recommend you check out the Mississippi Secretary of State’s Business One Stop Shop. You’ll answer a handful of questions about your business, and the site will generate a to-do list for starting your business.
Step 1: Name your Mississippi LLC
The first step in starting an LLC is choosing a name for your business. It’s important to know that there are some constraints on what you can name your business. For example, some words must be included in your name, while other words can’t be used at all.
Words You Have to Use
Mississippi Code Section 79-29-109 says that your name must contain the words “limited liability company” or the abbreviation “L.L.C.” or “LLC.” This is because an LLC name has to let consumers know that the business has limited liability.
Section 79-29-109 also says that your name can contain the name of a member or manager, but it is not required.
Words You Can’t Use
There are also some words your LLC name can't include. In general, you can’t choose a name that makes it seem like your LLC is a different type of business entity or does something it can’t legally do.
That’s why Section 79-29-109 also says that an LLC name can’t contain any of the following words:
- “trust company”
- “limited partnership”
If your company can’t perform certain jobs because it lacks the proper licenses or certifications, you can’t name your LLC something that makes it seem like you can do those jobs.
The big rule is this: if you need a license to do your job, double-check with the Secretary of State to make sure your company name complies with the law.
Your LLC name must also be different or “distinguishable” from any other business name registered with the Secretary of State. This will help prevent consumer confusion between two companies with the same name.
Research the LLC Name You Want
Once you pick a name for your LLC, you can easily check if your chosen name is available using the Mississippi Secretary of State’s Business Search.
If someone else has already used the name you want, there are a few ways you can still use it. First, you can use the name if the other party agrees to let you use it and changes its name to something distinguishable. You can also use the name if you get a court order that says you have the right to do so.
If your chosen name is available, Mississippi Code Section 79-29-111 lets you reserve it for 180 days. To claim your name, you must submit an Application for Name Reservation to the Secretary of State. According to the business documents fee schedule, there is a $25 filing fee.
Mississippi requires all business documents to be filed using the Secretary of State's online filing system. You will need to register for an account to access forms and file documents.
Get a Matching Domain
Once you settle on an LLC name, we recommend you get a matching domain, even if you don’t have immediate plans for a website.
Competitors can buy your perfect domain and its variations to block you from using them.
Domain squatters sift through public records of newly registered LLCs and will buy their matching URLs, only to relist them with huge markups.
A domain name from GoDaddy.com or a similar registrar will cost you between $20 and $50 per year, with regular specials and sales where you can get large discounts.
It pays to check now.
Once you have your domain name, you can also create a branded email address through GoDaddy.
Mississippi DBA: Using a Fictitious Business Name
Although some businesses choose to “go by” their formal name, LLCs can also use a “DBA” or “Doing Business As” name to conduct business. Many business owners actually use a DBA instead of their LLC’s official name in their day-to-day operations.
A DBA can be used on your signage, website, and business cards. This means you won't have “LLC” in the name that everyone sees. You only have to use your LLC's real name in official legal records.
If your LLC’s legal name is “Benjamin’s Buttons, LLC,” you can use a DBA of “Benjamin’s Buttons.”
But say in the future, you want to start selling other sewing supplies as well. In this case, you could file a new DBA of “Benjamin’s Sewing Shop” to clarify what all your business offers.
In Mississippi, DBAs are called “fictitious business names.” If you want to use a DBA, Mississippi Code Section 75-93-7 says you need to register it with the Secretary of State. You must do this by submitting a Fictitious Business Name Registration online. There is a $25 filing fee.
Step 2: Appoint a Registered Agent for your LLC
A “registered agent” is a person or business that is responsible for accepting legal paperwork and other correspondence on behalf of an LLC.
Mississippi Code Section 79-29-113 requires all LLCs to name a registered agent to receive service of process.
Receiving service of process is a legal term that means accepting official legal documents in a lawsuit. So if your LLC gets sued, the papers will be sent to your Mississippi registered agent.
All Mississippi registered agents are required by law to have an office in the state. Your agent must also be able to accept documents during regular business hours.
Because anyone can be a registered agent, it's possible to be your own LLC’s agent. New business owners often think this is a good idea because:
- It’s cheap: You’re not paying someone else to do it for you.
- It’s easy: The only address and contact information you have to keep current is your own.
- It’s reliable: You will receive all important documents personally.
But as many people learn too late, being your own registered agent can lead to various problems. Experienced business owners will tell you that it's better to use a professional registered agent service.
Here are a few reasons why:
- No privacy: Your name and address will be published on the Secretary of State’s website. This means that anyone with an internet connection can find your personal information.
- Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
- No breaks: You also must be available at all times during regular business hours to receive documents. This means no vacations, sick days, or leaving the office for lunch.
- Business interruptions: Client meetings can be interrupted by people serving process. That could be embarrassing or hurt your reputation.
- It’s your fault if you miss something: You always have to make sure your address is correct and up to date. If you make a mistake or miss something, you are held responsible.
A professional registered agent only costs about $100 a year. They will also alert you when they receive mail or other papers for your LLC, so you’ll never miss important documents.
If you are looking for a professional registered agent service, take a look at our Best Registered Agent ranking for some of our recommendations.
If you're going to conduct business out of state, we recommend using a national registered agent service.
If your company conducts business outside the state, you must register as a foreign LLC and appoint a registered agent in that state. Using a national service will let you use one company as your agent in every state instead of hiring multiple companies.
Step 3: File Your Mississippi LLC Certificate of Formation
A certificate of formation is the legal document that creates an LLC. It lists basic details about your business. To start an LLC in Mississippi, you'll need to file a certificate of formation with the Secretary of State.
If you would like to avoid the hassle of handling your LLC filing yourself, you can also use a professional LLC formation service. Check out our Best LLC formation services article for some of our suggestions.
What to include in my Mississippi Certificate of Formation?
According to Mississippi Code Section 79-29-201, your certificate of formation must include:
- The LLC’s name.
- The name and address of the registered office.
- The name and address of the registered agent.
As with other business filings, your certificate of formation must be submitted online.
Mississippi LLC Filing Fee
According to the Mississippi Secretary of State fee schedule for business filings, the filing fee for a certificate of formation is $50.
Read More: How Much Does It Cost to Form an LLC in Mississippi
Mississippi LLC Processing Time
Your LLC formation documents will typically be processed the same day you submit them, sometimes within minutes of filing.
Step 4: Draft your Mississippi LLC Operating Agreement
Operating agreements are formal contracts between members of an LLCs about how the business will run. They outline the rules for the business and define each person’s rights and duties.
Mississippi law does not require LLCs to have operating agreements. Still, making one is a good idea for any new business. The purpose of the contract is to set rules everyone agrees to ahead of time. This can help you plan for any potential problems that could come up.
For instance, let's say one member would like to sell their LLC share. The operating agreement can specify the process for buying them out and who should take over that person's job.
A few of the other reasons why an agreement can help your LLC are:
- They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
- They say what the manager has the right to do. Managers also have special duties to the company and the members. The operating agreement should state these.
- They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
- They say how new members can join the company. They also have rules about how exiting members can leave.
- They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
- They say whether members or managers are in charge. They also say how to hire and fire managers.
- They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
- They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.
You have a lot of freedom when drafting an operating agreement. But, Mississippi Code Section 79-29-123 outlines some rules for what your contract can and cannot do. Make sure your agreement does not break any of these rules.
LLCs need an operating agreement to make sure all the owners are in sync with each other when it comes to running the company. The owners should all be involved in making the contract to fully understand what is expected of them. Once the agreement is signed, you should keep a copy for your files.
Step 5: Get an EIN (Employer Identification Number) for Your Mississippi LLC
An Employer Identification Number (EIN) is a nine-digit ID number issued by the IRS. It can be used to file taxes or make other transactions with the government. EINs are similar to SSNs, but they are for LLCs instead of people.
Here are the most common times when you need an EIN:
- Does your LLC have more than one member?
- Does your LLC have any employees?
- Is your LLC taxed as a C corporation or S corporation?
If you answered yes to one or more of the questions above, you need to register for an EIN.
If you run a single-member LLC, you can file a tax return without an EIN using your SSN. However, if you want to keep business and personal funds separate and avoid fraud, getting an EIN is the way to go. You'll also need an EIN to open a bank account for your LLC.
It's quick and easy to get one from either the IRS website or by filling out IRS Form SS-4 and mailing it in. It's free to apply for one, so you should never pay someone to do it for you unless it’s part of an LLC formation package.
Read More: How to Get an Employer Identification Number in Mississippi
First Tasks After Registering your Mississippi LLC
After you start your LLC, there are some other things you'll need to do before you officially open for business. Taking care of these tasks will help ensure that your company is fully prepared and ready to go.
Open a Business Bank Account
It is possible to run an LLC without a business bank account, but it is much easier when you have one. A business account is useful because it separates your personal assets from those of the company. That way, if there are legal claims against the company, they don't impact you personally.
There are many perks of a business bank account, such as:
- Convenience: Keeping things separate makes your LLC’s bookkeeping much simpler.
- More business opportunities: Your LLC can only receive credit card payments through a business account. You can also do business with people who won’t take personal payments.
- Personal asset protection: Mixing your personal and business funds could cause you to be held responsible for the LLC’s debts.
The third advantage, asset protection, is crucial.
LLC owners are protected from liability because LLCs are considered to be separate legal entities from their owners. So, your personal funds and other investments won’t be at risk if the LLC gets sued. This liability protection concept is known in legal jargon as the “corporate veil.”
When you don’t use a business bank account, you can mix your personal assets with LLC funds. If this happens, the corporate veil can be “pierced. This means that if your business is sued, you can be ordered to pay the LLC’s debts with your own assets.
In light of this, we recommend opening a business bank account and only using it for the LLC. This will help you protect your personal assets from being seized by creditors.
Get Business Insurance For Your Mississippi LLC
We strongly suggest that you buy business insurance for your LLC. Think about what types of insurance your company might need before you choose your coverage. You'll have to think about the dangers that are specific to your industry so your LLC can be fully protected.
If you don't have the right insurance policies in place for your business and something happens to it, you might not be able to recover from the incident and could end up with nothing.
The most popular types of business insurance are:
- General liability insurance: You’ll need this if there’s an injury on your property. It pays for damages and a lawyer if you need one.
- Commercial automobile insurance: This works like your own car insurance. It covers drivers and vehicles for your business.
- Workers’ compensation insurance: Mississippi law requires all businesses with five or more employees to carry workers’ compensation insurance. You can buy a policy from a private insurer or become self-insured.
- Commercial property insurance: This protects your property in the event of damage. Keep in mind that flood insurance is often a separate policy.
- Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
- Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know exactly what kinds of losses will be covered.
Keep Your Mississippi Company Compliant
If you own an LLC, you need to follow certain rules and regulations to comply with the law. For instance, you might need to get a business license or file taxes.
Make sure you stay up-to-date on local laws that may affect your company. This will help you keep your Mississippi LLC running without any problems.
Mississippi Business Permits and Licenses
Depending on the type of business you are starting and where it will operate, you may need to apply for permits or licenses from your local government. Different cities and counties have different requirements. The Secretary of State’s Business One Stop Shop will provide more information about the specific permits and licenses your LLC will need.
Mississippi Tax Requirements
Mississippi LLCs may be required to pay several types of state tax. For instance, if you sell goods in the state, you’ll have to pay sales and use tax. The Business One Stop Shop will provide you with more information about state tax requirements.
Federal LLC Tax Filing Requirements
An LLC is a type of “pass-through” entity, meaning that the company itself doesn't pay taxes on its profits. Instead, you'll need to include your LLC's profits and losses on Schedule C of your personal income taxes.
As an LLC owner, you will also need to pay Social Security and Medicare taxes even if you don't plan to hire any employees. If you do plan to have workers, it is your responsibility to deduct payroll taxes from their paychecks.
Annual Report and other Filing Requirements
Mississippi Code Section 79-29-215 requires LLCs to submit an annual report to the Secretary of State. Your LLC annual report must be filed by April 15th of the given calendar year. You must file online, but there is no filing fee for this report. For more information, check the Mississippi Secretary of State website.
Mississippi Business Formation Quick Links
- IRS — apply for an EIN online
- Internal Revenue Service information regarding the federal tax treatment of LLCs
- Business One Stop Shop (SOS)
- Business Search (SOS)
- Business Documents Fee Schedule (SOS)
- Online Filing System (SOS).
- Naming Requirements: Mississippi Code Section 79-29-109
- Name Reservation: Mississippi Code Section 79-29-111
- Fictitious Business Name: Mississippi Code Section 75-93-7
- Registered Agent: Mississippi Code Section 79-29-113
- Certificate of Formation: Mississippi Code Section 79-29-201
- Operating Agreement: Mississippi Code Section 79-29-123
- Annual Report: Mississippi Code Section 79-29-215
Mississippi LLC FAQs
How much does it cost to start a Mississippi LLC?
The filing fee for a Mississippi certificate of formation is $50.
What is the processing time to form my Mississippi LLC?
Your submission will typically be processed the same day you submit it, sometimes within minutes of filing.
What are the benefits of a Mississippi LLC?
LLCs don’t have to pay income tax for the company, as a corporation would. An LLC also protects your personal assets from being seized by creditors, unlike a sole proprietorship.
Where do I check if my Mississippi LLC name is available?
Once you pick a name for your LLC, you can easily check if your chosen company name is available using the Mississippi Secretary of State’s Business Search.