If you’re looking to launch a new business, the first concrete step you will need to take is to form an official legal business entity for your new company. This could be a corporation, S-corp, sole proprietorship, partnership, or limited liability company (LLC). For many business owners, LLCs present the best option, as they have great personal liability protection, but are easier to set up and maintain than corporations are.
Limited Liability Companies are set up on the state level, and the process varies depending on the state. In Mississippi, LLCs are set up with the Mississippi Secretary of State. You will need to file the Certificate of Formation with the state (see step #4 below), which is the formal document that establishes your LLC as a business entity.
There is more to it than just that, however, which is why we put together this guide on how to start an LLC in Mississippi. Keep reading to learn how!
1. Consider utilizing an LLC formation service
There are two ways to go about forming an LLC: On your own, or with the help of an LLC formation service. For many business owners, we recommend using a service, as it can help save you time and hassle.
The advantage of doing it on your own is that you will save a bit of money (~$50-$150 or so). The disadvantage is that it’s more complex, and often takes longer – and there are more opportunities to make mistakes.
For many entrepreneurs, the small cost of using an LLC formation service is worthwhile. Two companies that are frequently recommended are Northwest Registered Agent and ZenBusiness. These two companies can help guide you through the business formation process, and help to drastically simplify the entire experience. Northwest is known for exceptional, personalized service, while ZenBusiness offers great service at a lower cost.
These services also offer other features and services that will be useful for your company. This includes Registered Agent services (see step #3), mail forwarding, compliance services, and more. There are different plans to choose from with various features available, so you can select a package that suits your needs and budget.
Check out our roundup of the Best LLC Services
2. Name your new company
Before moving forward with a business application, you must decide on a name. This is an important step, as you will want to select a name that’s memorable and suitable for your business.
It’s also important that your company name meets certain requirements. The main requirement is that the name must be unique and different from any other company registered in Mississippi. To confirm availability, you can conduct a business entity name search here.
In addition to being unique, the name must also not contain any government-related terms or words. And if it contains phrases related to regulated industries, like banking or legal services, then special permission must usually be obtained. For example, you can’t register an LLC name with the phrase “bank” in the name, unless you actually have the proper licensing to operate a financial institution in Mississippi.
Finally, the name must contain “LLC”, “L.L.C.”, or “Limited Liability Company”. You will see a full list of naming requirements during the process of registering your business.
Using a Fictitious Name in Mississippi
Mississippi allows for the use of what’s called a Fictitious Name. In other states, this may be called a trade name, assumed name, or “doing business as” name. A fictitious name is a secondary name used for branding purposes. A fictitious name is not a business entity in a legal sense – it’s simply a secondary name that is “attached” to an existing business entity.
For example, you could start a Mississippi limited liability company called “ABC, LLC”. You could then register a fictitious name of “ABC Plumbing”, if that name is available. MS fictitious name applications can be filed online.
3. Appoint a Registered Agent
LLCs in Mississippi are required to appoint a Registered Agent. This is an individual – or a company – that is appointed to represent the LLC. The main responsibility of this role is to be the primary point of contact for the business. The Agent will receive important legal notices, tax documents, etc. on behalf of the company.
Who can be a Registered Agent? Any resident of Mississippi (including yourself, or an employee), or any company licensed to do business in the state.
This leaves two options: Either appoint yourself or an employee as your Registered Agent or use a professional service. If you choose the latter, expect to pay around $50-$150 per year. Northwest Registered Agent is a great choice for personalized service, while ZenBusiness is a bit cheaper. Both will ensure no important documents are missed, and can also help to protect your privacy as a business owner.
Check out our roundup of the Best Registered Agent Services
4. File LLC Certificate of Formation
The Mississippi LLC Certificate of Formation is the primary document that needs to be submitted in order to form your LLC. In most states, this is called the Articles of Organization. The document must be filed with the MS Secretary of State. The process must be done online (there is no mail option at this time). The filing cost is $50.
To file online – Register an account with the Mississippi Corporations Department and fill out the form online. Pay the $50 filing fee by credit card.
Once you have submitted your application, you will need to wait for the state to process the documents. You will be notified when the processing is complete – or if there are any issues to address. The filing process generally takes 2-3 weeks.
5. Create an operating agreement
Note: This step is optional, but recommended.
Operating agreements are important legal documents that are kept internally by businesses. This means that they are simply kept on file, and not submitted to any government agency. Because of this, they are completely optional. However, most businesses should still have one.
An operating agreement is a document that establishes several aspects of a new business. Most importantly, it defines ownership structure and operating procedures. For businesses with multiple members or owners, this is very important. An operating agreement reduces the risk of future conflict over ownership rights and other disputes.
Services like ZenBusiness can help with the drafting of a new operating agreement. You can also hire an attorney to help, although this may be costly. Alternatively, you may be able to find a template online that you can use to put together your operating agreement.
6. Apply for business licenses & permits
The steps above will form your LLC as a legal entity. However, there are additional permits and licenses that will typically be required in order to operate a business legally. The LLC paperwork simply establishes the business entity – but local, state and federal licenses/permits may also be required.
The requirements vary depending on the type of business. Some will need statewide professional licenses. Others may need federal or state licenses for specific industries. And most will need local business licenses in the cities or counties where they plan to operate (check with your local county clerk for details).
There are also specialty licenses that may be necessary. For example, restaurants will need health licenses and potentially liquor licenses. Be sure to research all your requirements thoroughly.
7. Apply for an EIN
An EIN, otherwise known as an employer identification number, is a federal tax ID that allows you to hire employees and is also used for communications with the IRS. It’s a bit like a social security number, only for your business instead of you yourself.
To apply for an EIN, simply fill out this application on the IRS website. The application is simple, and there is no cost to file. EINs are required to hire employees, so this is not a step that most businesses can skip. Even if you don’t plan to hire employees, an EIN is still needed for certain activities, like opening a business bank account. This leads us to the next step…
8. Open a business checking account
Once you have your EIN, you will also be able to open a business bank account. Most financial institutions, from large banks to tiny credit unions, now offer these services to businesses of all shapes and sizes. Bank requirements will vary, however, so call ahead to see what you’ll need to provide in order to open the account.
You may be tempted to simply use your existing bank account, but this is a bad idea. It is very important to separate your business and personal finances as much as possible. Using a separate bank account will improve the simplicity of your bookkeeping and accounting efforts, and can also help protect your personal assets in the event of a lawsuit.
At this time, you may also want to consider opening a business line of credit, and/or a business credit card. You can do this with the same financial institution, or a different one.
9. Keep your business in good standing
Starting your business is just the beginning! LLCs in Mississippi will need to complete various ongoing compliance tasks in order to stay in good standing with government agencies. There are requirements on every level of government – state, federal, and local (city/county).
The specific requirements that your business will face vary depending on where you are located and what type of business you are running. That said, there are some general steps that are likely to be required:
- Mississippi LLC annual report – due annually, $0 filing fee
- Mississippi state tax returns
- Mississippi sales tax returns
- Employer taxes (payroll taxes) both state and federal
- Federal tax returns
- Federal quarterly taxes
- Local tax returns (city/county)
- Permit renewals
- Business license renewals
- Ongoing Registered Agent appointment
It’s wise to set aside some time now to research all your ongoing requirements. By staying on top of things from day one, you can ensure that everything is handled efficiently. It’s also a good idea to create reminders in your calendar so that you don’t miss any filing dates.
Services like ZenBusiness and Northwest Registered Agent can also help with some of these ongoing requirements, such as annual reports. They can also remind you of certain due dates, helping to avoid any issues. If you want personalized assistance during and after the business formation process, it’s definitely worth using one of these LLC formation companies.