Cost to Form an LLC in Mississippi: A Full-Fledged Guide

Last Updated on November 29, 2023 by Dr. Gabriel O’Neill, Esq.

Navigating the process of establishing an LLC in Mississippi entails more than just paperwork – it involves understanding the financial landscape to make informed decisions. While the prospect of costs might raise concerns, forming an LLC doesn’t have to be an overly expensive endeavor. 

In fact, with the right insights and resources at your disposal, such as the LLC services offered by ZenBusiness, there are ample opportunities to optimize expenses without compromising on quality. 

In this article, we’ll delve into the various expenses associated with forming an LLC in Mississippi, empowering you to embark on this entrepreneurial journey fully equipped and financially savvy.

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What Is the Cost of Forming an LLC in Mississippi?

Forming an LLC in Mississippi primarily involves incurring a $50 fee for submitting your LLC’s Certificate of Formation through the Mississippi Secretary of State’s online portal.

Here’s the LLC Cost Guide for all US States:

Mississippi Foreign LLC Formation Costs

In case you possess an existing LLC that’s registered in a different state and you intend to broaden your business into Mississippi, it’s necessary to initiate the process of registering your LLC as a foreign entity in Mississippi.

The fee associated with registering a foreign LLC in Mississippi amounts to $250. This registration can be completed by submitting an Application for Registration of Foreign Limited Liability Company.

Annual Cost for LLCs in Mississippi

When establishing a Mississippi LLC, it’s crucial to account for the ongoing expenditures linked with LLC upkeep. These include the following key costs and filings: 

• Firstly, an annual report must be submitted to the Secretary of State; while there’s no charge for this filing, it’s mandatory. 

• Secondly, the renewal of your Mississippi fictitious business name is required by December 31 of the name’s fifth year, with a filing fee of $25. 

• Thirdly, appointing a registered agent is obligatory, serving as the official recipient of legal papers and formal communication for the LLC; associated annual expenses, averaging between $100 to $300, hinge on whether you serve as your own agent or hire a third party. 

Gaining a grasp of these expenses aids in approximating the total outlays of operating a Mississippi LLC and facilitates well-informed decisions concerning your business financial plan.

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How Much Does It Cost to Start an LLC in Mississippi With the Best LLC Service?

ZenBusiness LLC Formation Cost

The initial cost for initiating the LLC registration process in Mississippi amounts to $50, with subsequent fees possible. The standard processing period required for this procedure spans from 2 to 3 weeks. Alternatively, individuals have the option to accelerate the processing time, opting for an expedited service lasting 4 to 6 days at an additional LLC cost of $50 or a rush service concluding within 1 to 2 days for a fee of $100.

ZenBusiness presents a selection of three distinct pricing tiers catering to diverse requirements for business formation services: Starter, Pro, and Premium.

• Starter plan: This proves to be an ideal choice for fundamental business formation necessities, incurring a fee of $0 alongside applicable state fees.

• Pro plan: For those seeking enhanced provisions, it encompasses supplementary attributes such as expedited filing and registered agent services, with a cost of $199 in addition to state fees.

• Premium plan: For a comprehensive solution, it integrates all components featured in the Pro plan and further encompasses the benefit of unlimited Worry-Free Compliance, a service aimed at assisting businesses in upholding conformity with both state and federal regulations. The Premium plan is available at a fee of $349 plus state fees.

Furthermore, ZenBusiness extends the opportunity to receive a complimentary year of Worry-Free Compliance with the acquisition of any of the aforementioned plans.

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Additional Costs When Starting an LLC in Mississippi

Mississippi LLC Name Costs

Naming your Limited Liability Company doesn’t come with any cost. Once your Certificate of Formation filing is approved by the state, your chosen Mississippi LLC Name is also approved at no extra charge.

If you want to ensure that your chosen name is reserved for up to 180 days before you officially establish your LLC, you can do so by submitting an online LLC name reservation and paying a $25 filing fee.

Mississippi Registered Agent Costs

The Mississippi registered agent Fee can either be $0 if you choose to fulfill this role yourself or $125 per year if you opt for a service. When establishing your LLC in Mississippi, it’s a legal requirement to assign a registered agent.

A Mississippi registered agent, whether an individual or a company, is responsible for receiving legal documents and state notifications on behalf of your LLC. To meet the requirement, the registered agent should possess a physical address within the state and be accessible during standard business hours.

If you decide to act as your own registered agent or have someone you know to fulfill this role, there won’t be any additional charges.

Alternatively, you have the choice to enlist the services of a registered agent provider, which typically ranges from $100 to $300 annually. These companies not only serve as registered agents but often provide valuable business services and privacy protection.

Enlisting a registered agent company is particularly beneficial under these circumstances:

• If you don’t have an address within Mississippi (as the law mandates registered agents to maintain a physical state address).

• If you wish to shield your personal address from public records (depending on the chosen company, you might be able to use their address to maintain your privacy).

Mississippi Operating Agreement Costs

There’s no fee for the LLC Operating Agreement (costs $0). 

An LLC Operating Agreement in Mississippi serves as a written agreement among the LLC Members. Within this document, you’ll find comprehensive details about ownership, management procedures, and the distribution of profits within the LLC. 

Both Single-Member LLCs and Multi-Member LLCs are advised to create an Operating Agreement. This agreement should be maintained within the business records, and a copy should be provided to every Member. While various online platforms typically charge between $50 to $200 for generating LLC Operating Agreements, this expense isn’t applicable here.

Mississippi EIN Cost

Obtaining an EIN Number for your LLC is free of charge (costs $0). 

An EIN, which stands for Employer Identification Number, is alternatively referred to as a Federal Employer Identification Number (FEIN). This unique identifier serves several purposes, including income tax filing, opening an LLC bank account, and facilitating employee hiring (if applicable).

Although numerous websites may impose a service fee for EIN acquisition, it’s important to note that you can actually obtain one for free. Notably, there are no associated Mississippi state fees when obtaining an EIN number for your LLC.

You have the option to secure an EIN for your LLC from the Internal Revenue Service (IRS) without incurring any expenses. The online filing process is swift and can be completed within a matter of minutes.

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Mississippi LLC Taxes

Numerous variations of Mississippi LLC taxes necessitate payments from owners, leading to a significant annual expense fluctuation. 

Several of the levies imposed on LLC owners encompass:

Federal Income Taxes

The Internal Revenue Service (IRS) offers different treatment options for LLCs concerning federal income taxes.

Single-Member LLC Taxes (Default Status)

For tax purposes, the IRS treats Single-Member LLCs as Disregarded Entities. This means that the LLC isn’t required to file a separate federal income tax return; instead, the owner of the LLC files the return and pays the taxes.

The taxation method for federal income tax depends on the LLC’s owner:

• If the owner is an individual, the LLC is taxed as a Sole Proprietorship
• If the owner is a company, the LLC is taxed as a branch/division of the parent company

Multi-Member LLC Taxes (Default Status)

When an LLC has multiple owners, it’s taxed as a Partnership. The LLC needs to submit a 1065 Partnership Return and provide a Schedule K-1 to the owners, reporting their share of profits. The income “flows through” to the owners, who then pay the taxes on their personal income tax return (Form 1040).

Husband and Wife LLC Taxes

In certain states like Texas, a husband and wife LLC can opt to be treated as a Single-Member LLC (Qualified Joint Venture) instead of a Multi-Member LLC. However, this option isn’t available in states like Mississippi that are not community property states.

Electing Corporate Taxation for LLC

An LLC can choose to be taxed like a Corporation instead of default statuses. This election requires careful consideration and often involves consultation with an accountant. Two options are available:

• S-Corporation: This election can help established businesses save on self-employment taxes
• C-Corporation: Less common, it offers potential advantages for large employers’ healthcare benefits

Mississippi State Income Tax

For Single-Member LLCs, the LLC typically doesn’t file a state return. Instead, the owner includes the LLC’s profits or losses in their personal state-level return. Multi-member LLCs might need to file a Partnership return at the state level, with owners reporting the LLC’s profits/losses in their personal state-level returns. Specific industry and business taxes might apply.

Local Income Tax for Mississippi LLCs

LLCs and owners might be required to file and pay income taxes at the local level. Consulting an accountant is advised, and reaching out to the local municipality for their specific requirements is recommended.

Mississippi Sales Tax

Selling products in Mississippi might require collecting sales tax and obtaining a Seller’s Permit from the Mississippi Department of Revenue (DOR). This permit allows tax collection on retail sales. Terms like resale license, wholesale license, and sales tax permit are often used interchangeably.

Mississippi LLC Payroll Taxes

If your Mississippi LLC has employees, you must handle payroll taxes, including federal and state income tax withholding, Social Security tax, Medicare tax, federal and state unemployment taxes, and local deductions. While it’s possible to manage payroll taxes independently, complexities and potential errors often lead to hiring a payroll company or seeking help from an accountant.

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Mississippi LLC Cost FAQs

How Much Does It Cost to Open an LLC in Mississippi?

Initiating a Mississippi LLC involves a $50 upfront expense, covering the sole filing fee for the LLC Certificate of Formation, with no additional charges for forms like the registered agent filing. 

Additional obligations might include securing a business license, contingent on industry and location, entailing varying local permit costs, and potentially requiring business insurance, all dependent on the nature of your enterprise.

How Much Does an LLC in Mississippi Cost Per Year?

Every year, every Mississippi LLC must submit a Mississippi Annual Report, a fee-free requirement. Should you have engaged a registered agent service, you will incur an annual subscription fee, typically around $125. Depending on your LLC’s industry and location, a business license might be necessary, with potential annual renewal fees for the permit contingent upon local regulations that you should confirm with your municipality.

Should I Hire an LLC Formation Service?

Though not mandatory, entrepreneurs can independently establish a Mississippi LLC. Yet, for a smoother and more precise filing experience, considering ZenBusiness is advisable. Renowned for excellent customer support, they even offer a free first-year registered agent service and additional benefits like an Operating Agreement and guidance with Annual Report submission.

Conclusion

In conclusion, delving into the process of forming an LLC in Mississippi requires a clear comprehension of the financial commitments involved. Mississippi’s business-friendly regulations offer a promising landscape, but it’s essential for potential business proprietors to factor in expenses such as filing fees, registered agent costs, and potential professional consultations. Engaging reputable LLC service providers like ZenBusiness can significantly streamline the process. 

Entrepreneurs should diligently evaluate these costs in light of Mississippi’s advantageous business environment, legal framework, and overall image. This ensures that the path they choose aligns harmoniously with their aspirations and financial feasibility.

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