Starting LLC in Mississippi: Peculiarities & Detailed Manual
Want to start an LLC in Mississippi? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in Mississippi, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An Mississippi LLC: The Notion & Essence
Many Mississippi business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of Mississippi puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet Mississippi’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of Mississippi obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with Mississippi’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in Mississippi and will help you to start an LLC. The agent can be an Mississippi resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner.
The term “registered agent” implies a person who is an agent of a certain organization. It receives data on almost all processes and transmits any information to the owner of the enterprise.
A registered agent guarantees an excellent reputation for your Mississippi LLC. Also, if your business gets worse, Mississippi can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in Mississippi, you must file the Articles of Association with the Mississippi State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
It is best to fill out all the form data specified above online. In most states, PDF files are available. But in Mississippi, these files are not always available.
Therefore, if you want to send documents by mail, you will need to fill out a form and print it out.
The price of creating a limited liability company: the state charges a fee of $ 50 for creating an organization.
Request processing time: the state processes your application up to 5 days from the date of submission of the application, but provided that you have correctly submitted all the necessary documents and issued them! Most business registration requests are processed within one day.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in Mississippi, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
Most likely, you are interested in the question of taxes in the state of Mississippi. The state takes a certain percentage of the businessman’s profit, depending on the type of entrepreneurial activity. If you have registered an individual entrepreneur, you will pay taxes on an individual declaration.
If you have presented yourself as a corporation, then you will pay a fixed tax. The percentage of corporate tax is 3-5%. This percentage depends on your income. You can learn more about corporate tax here.
Limited liability companies engaged in sales must give a certain percentage of profits to the state. In most cases, the percentage of the tax rate is 7%. If you want to learn more helpful information, click here.
Also, entrepreneurs and their employees must pay taxes to the state. Usually, the owner of the company retains a certain part of the salary of employees. He sends the received amount to the state treasury. This is how taxes are paid. If you want to read more information about Mississippi taxes, click here.
Also, employers must pay some unemployment contributions. The state pays these funds to people who cannot find a job. It is worth noting that this tax is mandatory. For this reason, it is describing in this section. You can find out more about the tax and funds of the Mississippi Department of Employment Security.
In addition, there are additional taxes. They belong to specific industries. For example, these taxes are relating to gambling, tobacco products, and many others. If you want to find out more information about additional state taxes, click here.
Taxes can be very high. But do not worry, since the states provide a useful resource “Taxpayer Access Point“. Thanks to this, you can pay many taxes in one place.
Local Tax Business Demands
Your company can be locating in any territory of the state, but in most cases, you will have to pay local taxes. These include property tax, corporate profit, and much more.
In some districts, you may be charged additional taxes. If you want to learn more about the district’s rates, click here. There will be a spreadsheet with all the data.
Stage №6: Getting Business Licenses & Permits
There is no general license in the state. But you still need a license, to legally carry out your activities.
There is a federal license in Mississippi. It is distributed by of professions and individual industries: agriculture, aviation, and so on. We recommend reading the lists of small businesses for federally regulated industries. They need licensing.
The state not only collects taxes but also benefits entrepreneurs. It issues permits and licenses that are necessary for doing business in certain areas of public life. For example, it can be a permit for medical services. There are a lot of licenses in the states. For this reason, you will be able to find something that suits your business.
We advise any entrepreneur who owns an organization to search in special sections for all kinds of licenses and permits that you can be obtained from the state. Let’s take the city of Jackson as an example. It requires a general license and several other documents. If you can’t find the necessary information on the site, contact the service support service or an online consultant!
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the Mississippi Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
Profit data – a full-fledged report that contains all the income information. This form should always be filled out, even if you have not earned or lost money. In a form, they ask slightly different questions than in the usual form. For this reason, look at the required form here.
Referring to the services of a qualified accountant
The state requires that limited liability entrepreneurs submit an annual report on the work done. You can submit the form here. This report will be used to update the database about your entrepreneurial business.