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If you’re starting a new business in Mississippi, forming an LLC may seem like the best of both worlds: you get the limited liability of a corporation, but with the ease of operation you’d have if you had a sole proprietorship or partnership.[1] Recent changes to Mississippi’s LLC law incorporate provisions from the statutes of business-friendly Delaware, providing many advantages for business owners seeking to form an LLC in the state.[2]
Steps
Organizing Your Business
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Decide how many owners your business will have and what their relationship will be. An LLC can have a single owner -- you -- or multiple owners. If you’re going into business with a few other people, you need to nail down everyone’s responsibilities before you officially form the company.
- Under Mississippi law, LLCs are allowed to have officers such as President or CEO just like corporations, but such titles are not required.
- Members can have governing interests, financial interests, or any combination thereof. If you have several owners, you should clearly spell out the rights and duties of each person before you form your company.
- Mississippi does allow you to name people who are members of your LLC in name only -- that is, they are members of the LLC but have no governing or financial interests or rights.[3]
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Choose a business name. Check the state’s business name directory and make sure the name you want isn’t already in use.
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Read the Mississippi LLC statute, or an authoritative summary. Before you officially register your LLC, make sure you understand the default rules for the organization and operation of your business.
- If you want to run your business differently than it would be run under the statute’s default rules, you’ll have to create an operating agreement that sets out those changes in writing.
- For example, the Mississippi statute provides a default rule that members vote based on profit sharing. If you have a member of your LLC who does not take a share in the company’s profits, but who you want to have the ability to vote on company policies and procedures with other members, you would want to change this rule in your operating agreement.
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Registering Your LLC
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Register online with the Mississippi Secretary of State Business Services. You must set up an account online to file business documents, order certificates or request certified copies.
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Appoint a registered agent. Every Mississippi LLC must have an agent for service of process in the state to accept legal papers on the LLC’s behalf if it is sued.
- The registered agent may be an individual resident or a corporation authorized to do business in Mississippi, but the agent must have a physical street address in the state.[9]
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Apply for an Employer Identification Number. If your LLC has more than one member, or if you’re planning on opening financial accounts in the name of the LLC, you’ll need an EIN from the IRS.
- There is no fee to obtain an EIN.
- This number is used the same way you personally use your Social Security number for identification.
- If you have employees, you also use this number to identify the LLC as their employer.[10]
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Draft an operating agreement. Although Mississippi law doesn’t require LLCs to have an operating agreement, it’s usually in your company’s best interest to have one.
- Your operating agreement defines the responsibilities, interests and liabilities of owners as well as describing the voting arrangements, structure and operation of the business.
- If you have one, you don’t have to file it with the Secretary of State, but you do have to disclose its existence on your annual reports.[11]
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File an annual report. All LLCs operating in the state must file a report with the Mississippi Secretary of State. You can file your report online any time between January 1 and April 15.
- If your LLC was formed in Mississippi, there is no fee to file your annual report. If it was formed in another state but you do business in Mississippi, you must file your report along with a $250 filing fee.[12]
- These reports are similar to the reports filed by corporations. The Secretary of State revokes any LLC that fails to file a report.
- Your report must include the name and address of at least one member, and must disclose whether your LLC has an operating agreement.[13]
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Completing Additional Registrations
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Register with the Mississippi Department of Revenue. The DOR collects all state taxes, including income and sales tax, so most LLCs must register with them.
- Even if your LLC has pass-through income taxes, if you sell goods and services you still have to register with the DOR and pay sales tax.
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Register for unemployment insurance. If your LLC has employees, you probably need to register for unemployment insurance with the Mississippi Department of Employment Security.
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Complete board examinations and registrations as necessary. Certain types of businesses must pass examinations or inspections to be registered or certified with a licensing board before they can operate.
- For example, if you’ve opened a barber shop, you need to register with the Board of Barber Examiners. If you’ve opened a bar, on the other hand, you’d need to register with the Alcoholic Beverage Control Office.[14]
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Expert Q&A
Video
Warnings
- If you formed your LLC in another state but are doing business in Mississippi, you must register with the Secretary of State as a foreign LLC. Registration is $250, but Mississippi will charge an additional $10 for each day you operate in the state without being registered.Thanks
- Foreign LLCs also must file annual reports, for which Mississippi charges a filing fee of $250.[15]Thanks
References
- ↑ http://www.nolo.com/legal-encyclopedia/llc-basics-30163.html
- ↑ www.sos.ms.gov/BusinessServices/Documents/LLC/LLC_Act_summary.pdf
- ↑ www.sos.ms.gov/BusinessServices/Documents/LLC/LLC_Act_summary.pdf
- ↑ http://law.justia.com/codes/mississippi/2013/title-79/chapter-29/article-1/section-79-29-111/
- ↑ www.sos.ms.gov/BusinessServices/Documents/FeeSchedule.pdf
- ↑ http://law.justia.com/codes/mississippi/2013/title-79/chapter-29/article-1/section-79-29-109/
- ↑ www.sos.ms.gov/BusinessServices/Documents/FeeSchedule.pdf
- ↑ www.sos.ms.gov/BusinessServices/Documents/LLC/LLC_Act_summary.pdf
- ↑ www.sos.ms.gov/BusinessServices/Pages/Commercial-Registered-Agents.aspx
- ↑ http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
- ↑ www.sos.ms.gov/BusinessServices/Documents/Business%20Entities%20(Clean).pdf
- ↑ www.sos.ms.gov/BusinessServices/Pages/Annual-Reports.aspx
- ↑ www.sos.ms.gov/BusinessServices/Documents/LLC/LLC_Act_summary.pdf
- ↑ www.sos.ms.gov/BusinessServices/Documents/Business%20Entities%20(Clean).pdf
- ↑ www.sos.ms.gov/BusinessServices/Documents/LLC/LLC_Act_summary.pdf
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