Missouri LLC: Everything You Need to Know
LLCs in Missouri are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications.8 min read
What is a Missouri LLC?
To start an LLC in Missouri, you need to do a number of administrative tasks before and after its formation, such as securing licenses and permits, registering for state taxes, filing for workers’ compensation and opening a business bank account. Below are all the necessary steps that you’ll need to start an LLC in Missouri.
There are some unique aspects to starting an LLC in the ‘Show Me State.’ For instance, among other things, there are no annual reporting or registering requirements for LLCs, unlike many other states.
Is LLC The Right Structure For Your Business?
Before you begin the process, determine if forming a Limited Liability Corporation (LLC) is the right choice for what you want to do with your business. LLCs in Missouri are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications.
LLCs provide important legal protections for individual business owners and partnerships, shielding them from personal liability from debts and, in many instances, court-imposed settlements incurred by the business. By organizing and registering as an LLC, owners (who are referred to as “members”) are provided limited liability, and the business’s profits are taxed only once.
Choose A Name For Your LLC
After confirming that an LCC is the right structure for your business, choose a name that suits your venture and is easily distinguishable to potential customers. This will be the name that your LLC will be known as to the public. It is legally referred to as a “fictitious name” that your LLC will be “doing business as” (DBA) in the marketplace.
An LLC's name must differ from that of another and, in some states, that of other corporations. Thus, once a business registers as an LLC, no other business can organize or exist as an entity under that name. Registration of a fictitious name, by itself, does not keep an LLC or other business from using it. To protect the name, its user must apply to the state's trademark or business office for a trademark.
To confirm the name is not in use, conduct a name search on the Missouri Secretary of State’s website. The easiest way to ensure your name will be approved is to make it distinct from other LLC names and that it includes “Limited Liability Company,” “LLC,” or “LC” at the end.
File a fictitious name reservation application with the Secretary of State for $25. The reservation form must include LLC name, applicant’s name and address, signature of registered agent and date, daytime phone number and contact person. A name may be reserved for up to 60 days. You can renew the reservation for successive periods of 60 days, as long as you do so during the 45-day period before the reservation expires.
This is a good opportunity to check if you can reserve a domain name in your LCC’s name. In fact, even if you don’t have a website now or plan to build one in the near future, by reserving a domain name in your LCC’s name, you can ensure some other entity doesn’t do so. Choosing a name that can be used as a domain name and for an email address, @MYcompany.com, is an important consideration.
Name A Registered Agent
You need to select a registered agent for your Missouri LLC. A registered agent must be a person or business that can send and receive legal documents on behalf of your LLC during business hours on regular Monday to Friday business days.
The registered agent must be a Missouri resident with a physical address in the state or a corporation authorized to transact business in Missouri. You can also elect an individual within the company, including yourself, to be the LLC’s registered agent.
A registered agent can be particularly beneficial for anyone who wishes to form a Missouri LLC but does not live in the state. A registered agent also ensures the privacy of LLC members by shielding their home addresses and personal information from public records.
Prepare Articles Of Organization
To register your LLC, file Articles of Organization on Missouri Secretary of State’s webpage (LLC 1) or by mail. The filing fee is $50 for online filings with a $1.25 convenience fee, and $105 for paper filings received through the mail.
The LLC’s name, address, and purpose; registered agent’s name and address; founding date; and the name and address of one or more organizer must all be documented in your LLC’s Articles of Organization.
Missouri’s Articles of Organization also require LLC’s state its purpose for existence which, in most cases, can simply be answered with the single word, “Profit.” Other questions unique to Missouri’s Articles of Organization include if the LLC is “perpetual” or only being formed for a specific time period and if LLC will be member-managed or have a manager. The names and addresses of each organizer must be listed.
Although expedited processing is not available by the state’s Secretary of State office, most LLC’s receive their Articles of Organization with seven business days.
‘Foreign’ LLCs Doing Business In Missouri
As with any state-based commercial entity, any LLC organized outside of the state must register with the Missouri Secretary of State as “foreign LLCs” regardless if they are foreign or domestic businesses.
Similar to Missouri-based LLCs, foreign LLCs must appoint a registered agent who meets the same criteria as that required for in-state businesses. If you are an out-of-state business that wants to expand into Missouri, file an Application for Registration of a Foreign Limited Liability Company (LLC 4) with the Missouri Secretary of State for $105.
The application must be accompanied by a certificate of good standing/existence certified by the home state Secretary of State within 60 calendar days from the date of filing the application for a foreign LLC in Missouri.
Secure An EIN
Regardless how many employees, if any, your LLC has, secure an IRS Employee Identification Number (EIN) by completing an online application on the IRS’s website. This unique 9-digit number is often described as a business’s Social Security number. An EIN may also be referred to as a Tax Identification Number (TIN) or the Federal Employee Identification Number (FEIN).
This is a critical component of starting an LLC in Missouri or anywhere else in the United States. EINs are not just required for all federal and state tax filings, but you will need one open a business checking account at banks, acquire a line of credit or other funding, and create accounts with various vendors.
Obtain Business Licenses & Permits
To operate your LLC, check with local county and city agencies to ensure your LLC complies with municipal zoning codes and has secured any required permits or certifications they may require. Depending on the nature of your business and its location, ensure you are complying with federal, state, and local government regulations.
The U.S. Small Business Administration (SBA) publishes a guide that outlines all federal business licenses and permits that may apply to your business. To learn about what professional licenses may be required by the state, contact the Missouri Division of Professional Registration.
Establish Business Accounts
With your LLC’s EIN and other legal documents, establish banking accounts and credit cards that clearly separate business expenses, income and assets from the personal finances of its owners. Not only does this protect the business and its owners, but it simplifies filing taxes.
Insurance & Taxes
Opening a business means making decisions about a wide range of insurance coverage, including general liability (GL), business owners’ policies, and depending on the size and location of the business, medical insurance. If you provide professional services, a professional liability insurance policy is a worthwhile investment. If you are a sole proprietor, purchasing insurance can be relatively inexpensive, as little as several hundred dollars annually for most of the types of coverage necessary.
Missouri LLCs that hire employees must register for Unemployment Insurance Tax and Employee Withholding Tax. Register for Unemployment Insurance Tax through the Missouri Department of Labor’s Division of Employment Security (DES) and Employee Withholding Tax through the Missouri Department of Revenue.
Missouri requires employers with five or more employees to carry workers’ compensation coverage. All construction businesses with one or more employees, including part-time, full-time, temporary, and seasonal workers, require coverage.
Workers’ comp exceptions in Missouri include sole proprietors and partners of LLCs who can choose to be excluded or opt to be covered. Close family member-employees and members of LLCs are covered unless they opt out. Other exemptions include farm laborers, domestic servants, real estate salespeople, and commercial motor-carrier owner/operators.
Negotiate An Operating Agreement
An Operating Agreement is a written legal agreement among the members of your LLC. The Operating Agreement explains how your company will be run, the rights and responsibilities of LLC members, the process adding and removing LLC members, and other important operating rules.
While LLC Operating Agreements are not mandatory in all states, they are required in Missouri when forming an LLC. The agreement can be verbal or written, but it is legally binding. An Operating Agreement is, essentially, a legal document that outlines the ownership and operating procedures of your LLC. The state formally recognizes them as governing documents.
Even if it wasn’t required by Missouri state law, it is generally advisable for LLCs to have an Operating Agreement in place.
Get A Certificate Of Good Standing
Among the most important assets in maintaining your LLC in Missouri is securing a Certificate of Good Standing that verifies the business entity was properly formed and has been maintained in a solvent and reputable fashion. This is a valuable document to have in seeking loans from banks, expanding your business beyond Missouri, or in receiving permits, licenses, and certifications vital to your LLC’s success.
Certificates of Good Standing are available through the Missouri Secretary of State’s office for $10.
Forming A Missouri LLC Without An Attorney
If you want to start a small business, you can form a new LLC in Missouri without hiring an attorney. It will save the expense of attorney’s fees. A single-owner LLC would normally cost $1,250 in attorney’s fees, plus the filing fee.
So, you are saving more than $1,000 in fees by doing it yourself, but you also will not have the counsel of an experienced business attorney and will be exposed to many other risks. By forming an LLC without the advice of an attorney, you accept those risks and, you’re on your own.
LLCs with more than one member are strongly advised to hire a Missouri LLC attorney to provide business tax planning, legal guidance, and a full package of LLC legal documents. An attorney can advise you on “best practices” for handling disagreements, tax issues, exit strategies, and how much an owner will be paid for being bought out of the business. Not discussing these important issues can become points of contention because business owners may have different expectations or understandings.
The benefits and security in hiring an attorney is not limited to multi-member LLCs but those operated by a sole owner and to anyone working in their own business full-time, who has invested significant assets into their business, or wants a solid legal foundation for their company.
If you need help determining how to proceed in forming a business in Missouri, you can post your legal needs on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.