Starting an LLC is easy. You just need to complete a few forms and register with the state. But there are costs associated with starting up an LLC. Here’s what it takes to start one in Mississippi.
Mississippi requires LLC owners to pay annual franchise taxes based on the number of members in the LLC. This amount varies depending on whether the LLC is taxed as a corporation or partnership and how many members are in the LLC. For example, a single-member LLC pays $100 annually; a multi-member LLC pays $1,500 per member annually, and a general partner LLC pays $5,000 annually.
The LLC must also file quarterly reports with the Internal Revenue Service (IRS). These filings include information about the LLC’s finances, such as income and expenses, and the names and addresses of each member. If you fail to file timely reports, you could face penalties.
In addition to filing the necessary paperwork, you must also make sure that your LLC is legally registered in the state where it operates. Depending on the type of business you plan to operate, you might be able to do this online. However, most states offer limited options for registering an LLC, so you may want to consult with a local attorney.
You can find out more about the process of forming an LLC here.
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What does an LLC cost in Mississippi?
The main cost to start an LLC is the $50 fee. There are many ways to file an LLC, including paper filing or electronic filing. A new law will allow anyone to form an LLC without having to pay any fees.
Mississippi Annual Report Fee: Free
Mississippi does not charge late filing penalties for tax returns. If you miss the deadline, there is no penalty for filing late. You do, however, lose the ability to claim certain deductions and credits.
A domestic corporation must pay a filing fee of $25 per taxable year. This includes corporations incorporated in Mississippi and those incorporated outside of Mississippi but doing business here. Foreign corporations must pay a filing fee equal to 25% (rounded up) of their total income earned during the previous calendar year.
An LLC must pay a filing fee for each member. Each member must pay a fee of one hundred fifty dollars ($150).
Mississippi’s Annual Report Due Dates: 04/15/2019
(Nonprofits must file a status report every five years.)
(Failure to file an annual report could lead to suspension or closure of your organization.)
Registered Agent Fee in Mississippi
A registered agent is someone who represents another person or entity. This includes signing legal documents such as contracts and filing taxes. If you’re starting a business, you’ll probably need to set up a registered agent. You can usually find one online or at the Secretary of State’s office.
In most states, you can do it on your own if you don’t hire a lawyer to register the business. However, there are some exceptions. For example, you must use a local attorney in Mississippi to register your business.
There are several different ways to register a Mississippi business.
Costs for forming a foreign LLC in Mississippi
A foreign LLC must file an Application for Registration before doing any activity in the state of Mississippi. This includes opening an office, making phone calls, sending emails, advertising, etc.
There’s a fee of $500 to form a foreign LLC. If you are filing under the name of another person, it costs $250.
Business Permits and Licenses
There are many types of licenses required by state governments. Some examples include:
• Alcoholic Beverage License – This license allows businesses to sell alcohol.
• Food Service License – This type of permit lets restaurants serve food.
• General Sales License – This type of licensing allows retailers to sell products like clothing and household items.
• Retailer’s Occupation Tax – This tax applies to retail stores, including grocery stores, pharmacies, gas stations, hardware stores, etc.
• Special Event License – This business license allows for special events such as weddings, parties, festivals, etc.LLC Filing Costs
An LLC filing fee is $100 plus state taxes. You must file within 30 days of formation. If you do not pay the initial filing fee, you will be charged another $100 per month. This amount increases every month until it reaches $1,500. After paying the final $1,500, there is no further monthly charge.
You can form your LLC online through the Secretary of State’s office. However, you cannot use the email address you used to register your domain name. You must provide a different email address.
If you decide to use a DBA name, you must file a fictitious business name statement with your county clerk. You will need to include your full legal name, home address, mailing address, phone number, and email address.
The cost of doing business as a sole proprietorship is much lower than an LLC. A sole proprietorship requires no paperwork, just one simple filing fee of $50.
An LLC doesn’t have to pay taxes and fees unless it conducts business in Mississippi. You don’t even have to file an annual report with the secretary of state’s office. And there is no fee associated with doing either.
The LLC cost structure varies depending upon whether you are a sole owner, single member, multiple members, manager, or partner. If you’re just starting, we recommend joining an existing LLC because it’s easier to set up and maintain.
Frequently Asked Questions
Is an LLC necessary in Mississippi?
An LLC protects your assets if something happens to your business, such as bankruptcy. In some states, you must form an LLC to protect your assets. But there are many benefits to forming one.
What is the cheapest way to get an LLC?
There are several ways to form a limited liability company (LLC), including hiring a lawyer or accountant to do it for you. Here are some options if you want to start an LLC without paying a fee.
1. Online Services
An online service like LegalZoom or Rocket Lawyer offers templates for filing papers. You fill out the forms and pay a flat fee. Some companies offer free consultations over email or phone.
2. DIY Forms
You can download forms from state government sites. For example, California residents can find forms here. However, most states require you to hire a lawyer or accountant to prepare the documents.
3. Local Business Center
Many cities and counties run local business centers where entrepreneurs can go to register businesses. These centers often provide basic legal services for free. In addition, many libraries offer assistance to small businesses.
Can I pay myself a salary from my LLC?
If you are self-employed, you know how important it is to maintain good records. You need to keep track of every dollar earned and spent and make sure you don’t forget anything. This includes keeping track of your personal expenses like rent, utilities, and groceries. But what about your earnings? If you’re running an LLC, there are some things you’ll need to do differently than if you run a sole proprietorship or partnership.
An LLC is a legal entity that operates independently of its owners. Unlike corporations, LLCs aren’t taxed separately from their members. Instead, profits and losses pass through to individual owners’ tax returns. While many people use LLCs to protect themselves against liability, others choose to use them because they want to take advantage of certain benefits. For example, an LLC allows members to deduct business expenses such as rent and equipment purchases. And unlike partnerships, LLCs allow members to draw salaries.
The IRS considers distributions from an LLC to be taxable income. However, distributions are different from dividends. Dividends are payments distributed to shareholders based on ownership shares. Distributions are payments made to an LLC member based on his or her percentage interest in the LLC. So, while dividends are generally treated as ordinary income, distributions are considered capital gains.
To avoid reporting distributions as taxable income, you must establish a separate payroll account and record each employee’s wages. In addition, you must keep track of each employee’s hours worked and ensure that employees receive proper W2 forms.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.