How to File an LLC in Mississippi

For many entrepreneurs, starting a business is an opportunity that gives them a chance to bring their dreams to reality. But once the initial enthusiasm wears off, it may leave people feeling lost or overwhelmed and unsure where to start.

A great option for small business owners is to create a limited liability company or an LLC. An LLC is a type of business that can offer the same professional services as a regular corporation but with fewer requirements. This gives owners more flexibility but less responsibility over liabilities. 

If you’re ready to start your Mississippi LLC, this article breaks down each step to help make the process easier.

Key Takeaways:

• An LLC offers the same professional services as a regular corporation but with fewer requirements, giving owners more management and tax flexibility.

• LLC formation and filing fees vary from state to state, so new business owners should research accordingly.

• Essential steps when forming an LLC in Mississippi include choosing your company’s unique name, hiring a state-specific registered agent, and getting an Employer Identification Number (EIN) from the IRS.

What Is LLC Formation?

A business owner might choose to start an LLC for several reasons, one of the most apparent being tax purposes. 

The United States Internal Revenue Service (IRS) doesn’t see LLCs as separate tax entities like traditional corporations. Instead, LLCs are “pass-through entities,” which means all profits and losses “pass-through” to the owners. This makes LLC formation especially appealing for entrepreneurs who want to provide business services without the legalities of a regular corporation. 

As a pass-through entity, members file their business’s profits and losses on their annual tax returns as personal assets. Mississippi law does not require members to pay a separate state tax or fee for operating their business in the state.[1] 

Because of this “pass-through” benefit, the IRS doesn’t recognize LLCs, so owners must choose how their LLC will pay taxes for legal purposes. There are four different business structures members can choose when filing taxes:

1. C Corporation

A C corp is an independent business entity owned by shareholders that follows standard rules, regulations, and taxes. Note that a C corp is not a pass-through entity. It is the default corporation recognized by the IRS, meaning it gets recognized as a separate tax entity and is taxed separately.

2. S Corporation

Unlike a C corp, an S corp is a tax designation that allows LLCS to be a pass-through entity and benefit from a lower self-employment tax. It is only available to small businesses that have 100 or fewer shareholders, among other requirements.[2]

3. Partnership

A partnership is an LLC with at least two members that is treated like a corporation.[3]

4. Sole Proprietorship

A sole proprietorship means that you own the business by yourself. However, it is not the same as a single-member LLC. Note that if you are the sole member of an LLC, you cannot act as a sole proprietor if you choose to structure your LLC as a corporation.[4]

LLCs identifying as partnerships and sole proprietorships will file their taxes separately as pass-through entities. The main difference is the number of people overseeing business operations and sharing profits, losses, and liabilities. This could appeal to small business owners because they don’t follow the default corporation rules of business ownership and taxes.

While LLCs do not pay federal income taxes and offer benefits in terms of liability protection, there are other things to note. No matter the type of business, each state has its own rules, and LLC formation is no different. Business owners must take note of these requirements so they don’t run into trouble with the Mississippi Department of Revenue, the state’s tax department.

Step-By-Step Guide to Starting Your Mississippi LLC

If you want to start an LLC in Mississippi state, keep reading for a step-by-step guide to help you through the process. From choosing your company’s unique name, hiring a state-specific registered agent, and getting an Employer Identification Number (EIN) from the IRS, we’ll help make the formation process less daunting.

Step 1: Choose a Business Name for Your Mississippi LLC

First, you need to come up with a distinct and individual LLC name and double-check that no other business owner has already taken your idea. Reserving your name often also includes trademarking your business name, registering your domain on the Internet, and more.

The Chamber of Commerce states that there are two significant guidelines members need to keep in mind when coming up with their Mississippi LLC names:

1. Must be different from any other existing business names already on file with the Mississippi Secretary of State

2. Must include some indication of being an LLC by including the phrase “Limited Liability Company” or an abbreviation, such as “LLC” or “L.L.C.”

While it may seem basic, it’s critical to do the proper prep work to ensure your name and domain are available. You could face harsh legal trouble for using a name if someone else has already taken it. You can use our free business name search tool when you have your LLC’s name ready to check that no other business owners have already claimed it, or use the Secretary of State Business Search. 

If your unique LLC name is available, you can reserve it with the Mississippi Secretary of State by filing an Application for Name Reservation on the online portal. You must register for an account and pay the $25 reservation fee. Your name will be reserved for up to 180 days, giving you time to form your LLC and officially file a Certificate of Formation.

It’s important to note that an LLC is not the same as doing business as (a DBA). A DBA is a business that works under a fake name, while an LLC operates as a legal entity under a legitimate name. LLCs provide more legal protections and freedom from liabilities than DBAs.

Step 2: Fill Out Mississippi Certificate of Formation

The certificate of formation, also called articles of organization in other states, is the document you need to form your LLC officially. Mississippi state requires all LLCs to file a certificate of formation with the Mississippi Secretary of State. 

You must include the following details on the certificate of formation for your Mississippi LLC:

• LLC’s registered name and business address

• Registered agent’s name and address

• LLC’s North American Industry Classification System (NAICS) code

• LLC’s future effective date, if applicable 

• Signature from the LLC’s organizer, member, or manager

We can create and file your Mississippi certificate of formation in minutes to start your LLC formation. Alternatively, you can file your certificate with a $50 filing fee online or print and mail your copy to the Secretary of State’s office. Once you submit your certificate, the Secretary of State will approve or deny your entity’s formation. 

Annual Report

In addition to filing your Certificate of Formation, LLC members must upkeep their compliance paperwork to ensure that their businesses fulfill any other legal obligations required by the state. One of these requirements is filing annual reports.

Any member with an LLC active in the state is mandated by law to file an annual report. LLC owners must file their reports before April 15 each year, the same deadline for filing income tax on personal tax returns. The Secretary of State collects and monitors this activity using the LLC’s business ID to ensure that business owners are in good standing with the state’s requirements.

Foreign LLCs

For foreign LLCs, there is a separate set of steps that owners need to take to do business in the state. 

A foreign LLC is an LLC formed in another state. A business entity might want to take its services to another state for several reasons, like the owner moving, finding out that their services are better suited for a different audience, forming a partnership elsewhere, and more.

To operate in Mississippi, foreign LLCs need to:

1. Register with the Mississippi Secretary of State with the instructions above

2. Follow the naming guidelines and confirm their LLC’s name is available in the state

3. Secure a Mississippi registered agent

4. File an Application for Registration of Limited Liability Company with the Mississippi Secretary of State

5. Pay the $250 filing fee

Once registered in Mississippi, former foreign LLCs must follow the same rules for filing annual reports. LLCs initially formed in the state do not need to pay an annual report filing fee. However, foreign LLCs that later register in the state must pay a $250 filing fee whenever they submit a report. 

Step 3: Hire a Mississippi Registered Agent

A registered agent handles official matters on behalf of your LLC. Whether your LLC identifies as a C corp, S corp, partnership, or sole proprietorship for tax purposes, you must designate a separate individual or entity to accept legal documents, correspond with government officials, and file compliance paperwork.

Essentially, agents are responsible for handling all the legal documents on behalf of the LLC, including complex administrative and legal duties, like service of process. This refers to the legal documents needed to initiate a lawsuit, which include the summons and the complaint. For busy entrepreneurs, agents are a solution to let them focus on running the business.

Hiring an agent comes with significant benefits, and many business owners choose to appoint an agent to help support their business needs rather than serve as their own. Here are some other ways that an agent can support you and your business:

1. Serve as the main point of contact for legal correspondence

2. Act as the main street address for your LLC

3. Correspond with government officials

4. File compliance paperwork according to deadlines

5. Support business owners and allow them to focus on running operations

6. Accept legal documents

7. Alleviate administrative burdens

8. Reduce liabilities by handling official paperwork

In Mississippi, an LLC’s registered agent must be a state resident or business entity with a legal address in the state. If your registered agent is a business or individual based out of state, they must have a business office in Mississippi.

When starting and running your own business, getting the paperwork right matters. Tasks that seem small, like filling out paperwork or other administrative duties, have a massive impact on setting the proper foundation for your LLC. Risking getting a document wrong, missing a form, or failing to pay a fee can result in serious legal repercussions later. You don’t want to risk it with so much at stake.

That’s why we encourage business owners to hire an agent for their LLCs rather than acting as their own. Our reliable and professional registered agent service is available in all 50 states. 

Swyft Filings is designed to provide businesses of all types, structures, and sizes with an affordable and professional option for appointing an agent. With a hired agent, your business remains compliant while you keep your privacy, and you won’t have to worry about missing a filing deadline again.

Step 4: Create an LLC Operating Agreement

At the end of the process, members can choose whether or not to create an LLC operating agreement. Even though this step isn’t required by Mississippi state law, we strongly recommend drafting an official document that clearly outlines ownership over the business and responsibilities for all business entities. 

A written operating agreement helps formalize ownership, determine and solidify the LLC’s owner, and outline how to run the LLC. Running a business entity can get complicated, so it is essential to state critical information explicitly. The operating agreement is the only document that verifies who has ownership of the company, so an original copy should also be kept by each member once signed.

An LLC can be managed in two ways:

1. Manager-Managed

If some members want to refrain from participating in running the business or coming to agreements for the LLC operations, they can appoint a manager or managers. A manager-managed LLC means someone is in a role to make decisions on behalf of a member. This can be other LLC members or non-members.

2. Member-Managed

A member-managed LLC means that the owner or owners are responsible for making executive decisions for the business. As mentioned, an owner is also referred to as a member. If there are multiple members, they must come to a consensus on how they run business activities where all individuals agree.

Once members iron out the details, they can draft the operating agreement. At the minimum, it establishes who has ownership of the LLC. However, it also outlines the individual responsibilities of those who own the business and their specific obligations to keep it running. It should also describe the business structure and how they will manage the LLC according to particular styles.

Step 5: File for an Employer Identification Number

All newly-formed LLCs in the United States must apply for an Employer Identification Number (EIN) to comply with the IRS. 

An EIN is a unique, nine-digit number used to identify a tax-paying entity or individual. You need an EIN to open a business bank account, apply for required business licenses, and report your LLC taxes. Similar to a social security number, it acts as an ID number that lets the IRS track if your LLC is in good standing and abides by federal guidelines.

Here are a few tips for applying for your EIN:

• You can get an EIN online through the IRS.

• If you apply online, you do not need to fill out IRS Form SS-4.

• You can get your EIN in as little as seven business days if you complete the form electronically, either online or by fax. 

• You can complete the form physically and send it by post, but it will lead to longer processing times. 

• On average, you should submit the form at least five weeks before filing your LLC tax return.

We will conveniently obtain your EIN for you for a small fee. Be sure to apply for your EIN well before filing your taxes so you can include it on your return. 

However, there are specific scenarios where owners might not need to file for an EIN. Single-member LLCs are considered “disregarded entities,” and the member can report business activities on their tax return.[5] If your LLC does not employ anyone, you can use your SSN rather than an EIN when filing business taxes.

Let Us Handle Your LLC Paperwork

As you’ve seen, there are several steps to complete when forming a Mississippi LLC. Let Swyft Filings take you through the process from start to finish. 

We provide a fast, easy, and reliable formation service so entrepreneurs can put their time and energy into running a successful business. By letting us handle the paperwork, we help new owners save time and money by ensuring the documents are completed correctly the first time. 

With some of the fastest turnaround times in the industry, our service is a one-stop solution for your Mississippi LLC formation. Apply for yours through our online filing portal in as little as 10 minutes, and we’ll get your LLC up and running.

FAQs:

How much does it cost to set up an LLC in Mississippi?

There is a $50 fee to file a Mississippi LLC. If you are a foreign LLC registering in the state, it will cost $250. Expedited filing options can cost you extra, as well as choosing to use a filing service.

How is an LLC taxed in Mississippi?

LLC’s are considered “pass-through” entities, meaning all profits and losses pass-through to the owner’s personal tax returns. The IRS does not recognize LLCs as separate tax-paying entities, so every LLC owner needs to choose a business structure for their LLC to identify under. There are four structures — C Corporations, S Corporations, Partnership, or Sole Proprietorship — which will further determine how an LLC gets taxed in the state.

What are the benefits of a Mississippi LLC?

Mississippi LLCs are relatively easy to form, not only compared to corporations but also compared to other states. There is no publication requirement, and Mississippi doesn’t require operating agreements by law. LLCs also offer more management and tax flexibility.

How do you dissolve an LLC in Mississippi?

Members looking to dissolve their Mississippi LLC can do so on the Mississippi Secretary of State website. The online Dissolution form only contains a few boxes for owners to fill out and can be completed in advance.

Bibliography:

1. State of Mississippi Department of Revenue. “Corporate Income and Franchise Tax FAQs.” Accessed on December 16, 2022 

2. Investopedia. “What Is an S Corp?” Accessed on December 12, 2022

3. Internal Revenue Service. “LLC Filing as a Corporation or Partnership.” Accessed on December 12, 2022 

4. Internal Revenue Service. “Sole Proprietorships.” Accessed on December 12, 2022 

5. Internal Revenue Service. “Single Member Limited Liability Companies.” Accessed on December 16, 2022