Start an LLC In Mississippi 2023: The Real Guide

Start An LLC In Mississippi

Everyone wants to know how to start an LLC in Mississippi for free. Unfortunately, you can’t start one for free. While it costs a small amount when you’re ready to file the paperwork, it’s an investment into your future!

This article describes the steps for creating an LLC in Mississippi, the costs you might pay, what taxes to file, and much more. Let’s get started!

But first, let’s see how Mississippi compares to its neighboring states as a place to form an LLC.

State	Mississippi	Alabama	Arkansas	Tennessee	US Average
Population	2,961,279	5,039,877	3,025,891	6,975,218	6,619,825
LLC Filing Fee	$50	$200	$45	$300	$130.38
LLC Annual/Biennial Fee	$0 (however, an information report must be filed every year)	$100 minimum (every year)	$150 (every year)	$300 (every year)	$89.34 (every year)
Corporate Tax Rate	4.00%	6.50%	1-5.9%*	6.50%	5.60%
Nominal GDP per capita	$42,411	$49,027	$47,770	$59,969	$64, 773.08

Before You Set Up An LLC In Mississippi

Before forming an LLC in Mississippi, you must understand the steps needed to file the papers, marketing options, taxes, and how long it takes. You may also want to get your finances in order before beginning.

How Much Does It Cost To Start An LLC In Mississippi?

This section focuses on how much to start an LLC in Mississippi. Sometimes, the costs vary based on the area you do business in, but here are some general fees required:

The state of Mississippi claims that the cost to start an LLC is $50, the filing fee for the Certificate of Formation. You may also want to hire a registered agent service, which is anywhere from $99 to $150.

Therefore, the cost of creating an LLC in Mississippi is between $150 to $200.

Steps To Start An LLC In Mississippi

Here are the steps to take when forming an LLC in Mississippi:

1. Pick A Name For Your LLC

Choosing your company’s name is the most important (and first) step for starting an LLC in Mississippi. Make sure that it complies with the naming requirements in that state and is easily searched by potential customers. Here are a few guidelines:

Your company name must include “limited liability company” as it is or use an abbreviation.
It can’t include words that may confuse the business with government agencies, such as State Department, FBI, or Treasury.
Restricted words might require more paperwork. If you plan to use the terms “university,” “bank,” or “attorney,” you may need a licensed individual to be a part of the LLC.

It’s best to ensure that the name isn’t taken by someone else. On the Mississippi State website, you can perform a business entity name search.

2. Find A Registered Agent In Mississippi

Registered agents can be business entities or individuals. They’re responsible for receiving legal documents for the business. In a sense, it’s the company’s point of contact so that the state of Mississippi can get hold of you.

Do You Need a Registered Agent in Mississippi?

Yes, every LLC requires a registered agent. They must be a resident of the state or a corporation that is authorized to do business in Mississippi. You may choose yourself or anyone else within the company.

However, many people use a registered agent service like ZenBusiness or LegalZoom.

ZenBusiness – $49 + state fees to register your LLC (read review)

Incfile – $0 + $50 state fees to register your LLC (read review)

3. Certificate Of Formation

You must now register your Mississippi LLC by filing a Certificate of Formation with the Mississippi Secretary of State. It’s possible to do it online and costs $50.

LLC owners also require a NAICS (North American Industry Classification System) number, which is six digits. This is given to a company based on its type of trade.

Look up the code for your business using the US Census Bureau website.

4. Other Required Documents

When creating an LLC in Mississippi, you might require permits or business licenses based on what work you do. For example, restaurants may need health permits. The fees associated with these permits depend on the licensure you require.

Contact the county clerk in the business location to ask about local permits and licensure requirements. You may also find out about state permits through the Mississippi State Website.

Once you start running the LLC, you must file an LLC Annual Report to the Secretary of State. There’s no fee required.

5. Operating Agreement

LLCs don’t have to use an operating agreement, but it’s recommended to do so. It’s a legal document that outlines all the ownership and LLC operating procedures.

Generally, this comprehensive document ensures everyone’s on the same page, so there are fewer conflicts.

You’re not required to file the operating agreement with Mississippi. It’s internal and should be on file for future references.

6. Get An EIN

An Employer Identification Number is nine digits long and must be assigned to your LLC by the IRS. It’s there to identify businesses for tax returns and is like an individual’s Social Security Number.

EINs are sometimes called FEINs (Federal Employer Identification Numbers) and FTINs (Federal Tax Identification Numbers).

You need an EIN to hire employees, open business banking accounts, and file/manage your state and federal taxes. Generally, those who have a sole proprietorship should request a new EIN when converting to an LLC.

There’s no charge for an EIN, and you can apply online or send the form in by mail or fax.

The Forms You Need To Register An LLC In Mississippi

Here is a list of forms required to register your LLC:

Did You Know?
Limited liability companies can be owned by more than one person (member). Everyone participates and manages the company. Mississippi has the most comprehensive and modern LLC statutes in the country. There are often fewer record-keeping requirements for LLCs.

LLC Taxes In Mississippi

Taxes can often be difficult to understand. Every company must pay sales tax if they sell physical products. It’s best to get a seller’s permit from the Mississippi Department of Revenue’s website.

LLC owners should also register for the Unemployment Insurance Tax from the Department of Employment Security. They also have to get the Employee Withholding Tax set up by the Department of Revenue.

How Much Do LLCs Have To Pay In Taxes In Mississippi?

LLCs don’t pay income taxes, but the members do. Mississippi doesn’t impose a separate fee or tax to do business in the state, so that can save a little money.

However, it’s hard to say how much a person pays in taxes each year. It’s based on how well the company does.

Differences Between State And Federal Taxes

LLCs are called pass-through entities. Therefore, the federal and state income taxes are paid by the LLC members. Typically, the difference is that there could be more state taxes, such as business tax, employer taxes, and sales tax.

How Much State And Federal Taxes Do LLCs In Mississippi Have To Pay?

LLCs are pass-through entities, so they don’t pay income tax or the corporate franchise tax. Instead, the income is distributed to the members, and they pay appropriate taxes on what they earn.

Typically, LLC members report their income federally with the 1065 Partnership Return or 1040 Schedule C (single-member LLCs).

Is Mississippi A Good Place To Start An LLC?

Yes, Mississippi is a great place to start an LLC. It has fewer costs associated with it than other states. Plus, it helps you keep personal, and business assets separated to protect you in case your business is involved in a legal issue.

Taxes are generally easy to do because each member gets paid and does their own. It doesn’t go through the LLC.

How Long To Form An LLC In Mississippi

In most cases, it takes between six months to one year to form an LLC in Mississippi. However, this number counts everything, including organizing your paperwork, filing it with the right entities, setting up a company name, and all the rest.

Generally, it only takes one to two business days to finalize the applications. However, you’ve got to plan ahead and know what products/services you’re selling. Once everything is filed, you’ve got to get the business set up.

After formation, you’ve still got things to do. Some of these tasks can’t be completed until you’ve registered as an LLC. For example, you can’t get a business bank account until you receive an EIN, which can’t happen until you file the Certificate of Formation.

How Much Does It Cost To Run An LLC In Mississippi?

From the state’s standpoint, it’s free to run an LLC in Mississippi once it’s established. You must file an annual renewal report for the limited liability company, but it’s free to do online.

Still, you’ve got to think about daily/monthly/yearly operating costs. This includes:

Wages for employees/members
Taxes
Employee benefits
Building rent
Repairs
Utilities
Marketing (printing, postage, etc.)
Equipment (new/repair/maintenance)
Insurance

What To Do After Formation

Once you’ve formed your LLC in Mississippi, you’ve only just started! There are plenty of other things you should do to run your business efficiently. These include:

Create a Logo – You need a logo that signifies what you do. It’s what people look to and remember when they choose your company over the competition.
Build a Website or eCommerce Store – Every business requires a website to establish authority and show legitimacy. You may also want to create social media accounts.
Bank Account – You should have a business account that’s separate from your personal one. Otherwise, your personal assets could be used if you’re sued.
Business Insurance – Business insurance manages risk and helps you grow the company. Consider general liability, professional liability, and worker’s compensation insurance.
Annual Reports – It’s crucial to let the shareholders and other members know what’s happened each month, quarter, etc.
Business Credit Card – This helps you separate business expenses from personal ones, builds the business credit score, and helps you track everything.

LLC owners should have everything necessary to run their businesses smoothly. This isn’t an exhaustive list, but it can get you started!

Resources To Start A Successful LLC In Mississippi

Here are some helpful resources to get you started:

Start Marketing Your LLC In Mississippi

Even though you probably have a limited budget, you should focus on marketing your new LLC to get business. A website and blog are the most cost-effective solutions, but social media accounts are also important.

Content marketing helps build credibility and authority and can often be done alone initially. Make sure you understand the audience and their pain points. You can use email marketing and other methods to bring in more business.

How To Dissolve An LLC In Mississippi

If you decide to dissolve your LLC and no longer do business in Mississippi, you should officially dissolve it.

That means closing your business accounts (bank, tax, etc.) and filing the Articles of Dissolution. Failure to do this could mean liability and penalties or legal issues.

Conclusion

You’ve learned how to start an LLC in Mississippi. This includes initial setup needs, costs, and the steps necessary. Then, you received forms and resources to help you on your journey and learned about filing taxes.

Lastly, we discussed what to do after formation and how to market your LLC to bring in more business. This guide has all the information you need to begin your journey!

How To Start An LLC In Mississippi