Key Takeaways

  • The Missouri Limited Liability Company Act governs formation, operation, and dissolution of LLCs in the state.
  • LLCs provide liability protection for members, flexible management, and tax advantages.
  • Articles of Organization must include company name, purpose, registered agent, duration, management structure, and organizer details.
  • Missouri requires an Operating Agreement, though not filed with the state, to outline member rights, profit distribution, and dispute resolution.
  • LLCs must meet ongoing obligations like maintaining records at the registered office and complying with annual reporting.
  • Missouri law also addresses mergers, conversions, and dissolution procedures under Chapter 347 of the Revised Statutes.

The Missouri Limited Liability Company Act outlines rules and regulations for establishing and operating a limited liability company (LLC) in this state. You should be sure to understand the rules of the Act before you begin the process of forming your LLC.

Missouri LLC Basics

LLCs are a type of business entity governed by state law. The Missouri Limited Liability Company Act governs LLCs formed in the state, and you can find the specific rules of the Act in the Missouri Revised Statutes. Stockholders are the owners of corporations. The main role of corporate stockholders is to appoint a board of directors, which is a governing body that directs the operations of the company. In LLCs, company owners are called members. Instead of electing a board of directors, LLC members appoint managers to run the company. In many LLCs, members serve managerial roles.

LLCs were created to combine the benefits of partnerships and corporations. For instance, just like corporate stockholders, LLC members cannot be held personally liable for the debts to a company. Limited liability companies are similar to partnerships in that they both offer flexible ownership and management structures.

Key Provisions of the Missouri Limited Liability Company Act

The Missouri Limited Liability Company Act, found in Chapter 347 of the Missouri Revised Statutes, sets out the rights, powers, and responsibilities of LLCs. Some important provisions include:

  • Formation requirements: Filing Articles of Organization with the Secretary of State and paying the required fee.
  • Legal existence: An LLC is recognized as a separate legal entity once formed, shielding members from personal liability for company debts.
  • Management options: LLCs may be member-managed or manager-managed, offering flexibility for small or larger businesses.
  • Operating Agreements: While not filed with the state, these are legally binding documents that govern internal operations and are strongly recommended.
  • Default rules: If members do not adopt an Operating Agreement, Missouri law provides default provisions for profit sharing, voting rights, and management responsibilities.

Creating a Missouri LLC

Naming your LLC is the initial step that you must take if you want to form a limited liability company in Missouri. When naming your company, you should be sure to include one of the following phrases or abbreviations:

  • Limited liability company
  • Limited company
  • L.C.
  • L.L.C.
  • LLC

In your company's formation documents, you will need to include a purpose for your LLC. Your listed purpose can be as vague or as detailed as you wish. For example, some LLCs simply list their purpose as conducting legal business. LLCs in Missouri must appoint a Registered Agent. You will need to include your agent's address and name in your formation documents.

Another important part of forming your LLC is deciding if your company will be managed by company members or by a professional manager. Whichever option you choose, you will need to list your management structure in your Articles of Organization. In your Articles of Organization, you also need to list how long you plan for your company to last. Since LLCs can last forever, you could list the life of your company as perpetual. Finally, you need to provide the name and address of the person organizing your company. Depending on the nature of your business, you can have a single organizer or multiple organizers.

When filing your Articles of Organization in Missouri, you will need to pay a filing fee of $50. If you decide to pay with a credit card, you will also need to pay a convenience fee.

Your LLC will legally exist after you have filed your formation documents, although there are still a few more tasks that you will need to accomplish before you can begin doing business. For instance, your company needs a business bank account, but before you can open your account, you will need to draft an Operating Agreement and obtain an Employer Identification Number (EIN) from the IRS.

An Operating Agreement is one of the most important documents that your LLC will possess, so you must be sure that you're very careful when drafting your agreement. Some of the topics that your Operating Agreement should cover include:

  • How you will structure your LLC.
  • How you will distribute losses and profits among members.
  • Responsibilities and rights of members.
  • How the LLC will be managed.
  • Provisions for transferring ownership.

After forming your LLC, there are certain ongoing obligations of which you should be aware. Some of your company documents, for example, must be kept at your registered office and should be available for inspection whenever requested.

The Role of Operating Agreements in Missouri LLCs

Operating Agreements are not mandatory for filing with the state, but they are critical to the success of an LLC. Missouri courts recognize these agreements as binding contracts between members. A written Operating Agreement helps to:

  • Define ownership percentages and profit distribution.
  • Establish voting rights and management roles.
  • Provide procedures for admitting new members or transferring interests.
  • Set rules for dispute resolution and buy-sell provisions.

Without an Operating Agreement, Missouri’s default statutory rules apply, which may not reflect the intentions of the members. This can lead to disputes or outcomes that disadvantage certain members.

Missouri LLC Formation Requirements and Fees

When forming an LLC under the Missouri Limited Liability Company Act, you must meet several requirements:

  1. Name Requirements: The company name must include “Limited Liability Company,” “LLC,” or an approved abbreviation. It must be distinguishable from other registered entities.
  2. Registered Agent: Every Missouri LLC must maintain a registered agent with a physical address in the state.
  3. Articles of Organization: These must state the LLC’s name, duration, purpose, registered agent, management structure, and organizer details.
  4. Filing Fees: The standard online filing fee is $50 (paper filings may cost more). Expedited processing options may be available.
  5. Employer Identification Number (EIN): Required for tax purposes and to open a business bank account.

Failure to comply with these requirements may delay or invalidate your LLC’s registration.

Missouri LLC Myths

One of the biggest myths related to Missouri LLCs is that company members enjoy unlimited liability protections. While LLC members do have protection from the actions of the company, they can still be held liable for their own negligence. For instance, a company member could not use the protections of the LLC to avoid being held responsible for fraud. If you are an LLC member and personally guarantee a loan granted to the company, you can be held personally liable if your company defaults on the loan.

Dissolution and Conversion Under the Missouri Act

The Missouri Limited Liability Company Act also addresses how LLCs may be dissolved, converted, or merged with other entities:

  • Voluntary Dissolution: Requires member consent and filing of Articles of Termination.
  • Involuntary Dissolution: Can occur if the LLC fails to maintain a registered agent or violates state laws.
  • Conversion: Missouri law allows entities such as corporations or partnerships to convert into an LLC, and vice versa, under certain statutory procedures.
  • Mergers: Chapter 347 permits LLCs to merge with other domestic or foreign entities, subject to member approval and filing requirements.

Understanding these rules ensures that members plan for both the operation and possible closure or restructuring of their business.

Frequently Asked Questions

  1. What is the Missouri Limited Liability Company Act?
    It is the state law (Chapter 347 of the Missouri Revised Statutes) that governs LLC formation, operation, and dissolution in Missouri.
  2. Do I need an Operating Agreement for a Missouri LLC?
    Yes. While not required for filing, an Operating Agreement is strongly recommended to avoid default statutory rules and potential disputes.
  3. How much does it cost to form an LLC in Missouri?
    Online filing costs $50, while paper filings may cost more. Additional fees may apply for expedited services.
  4. Can a Missouri LLC be converted into another business entity?
    Yes. Missouri law allows conversions and mergers with other entities if statutory requirements are met.
  5. Are Missouri LLC members fully protected from liability?
    Members are shielded from company debts, but they can still be personally liable for fraud, negligence, or personally guaranteed debts.

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