Starting a Business in Mississippi
Starting a business in Mississippi is the process of establishing a legal business entity by filing documents with the Secretary of State.3 min read
2. Choosing a Business Name
3. Types of Business Entities
4. Registering Your Entity
5. Licensing and Permits
6. Business Finance and Taxation
7. Marketing Your Business
8. Certificate of Good Standing
Starting a business in Mississippi is the process of establishing a legal business entity by filing documents with the Secretary of State. This is done online through the portal system.
Resources for Mississippi Entrepreneurs
New business owners can seek advice from experienced small business consultants through the Entrepreneur Center at the Mississippi Development Authority. They provide management, technical, marketing, and financial assistance, including analysis of your business idea, plan, and market. You can also consult your local Small Business Development Center and research local and regional resources in your area.
Choosing a Business Name
First, check with the Secretary of State's online database to make sure the name you want for your business is available. This is called the Business Entity Search function.
Once you decide on a unique name, you can reserve it for up to six months before registering your business for a filing fee of $25.
Types of Business Entities
The main entities recognized by Mississippi are as follows:
- Sole proprietorships are owned by one person or a married couple who are taxed at a personal level on all business profits and carry full liability for business activities.
- Partnerships are owned by two or more people who share and pay personal tax on profits. They also share liability for business activities.
- Limited liability companies combine corporations and partnerships for advantageous tax treatment with limited liability.
- Corporations are taxed at the corporate level and at the personal level when profits are distributed to shareholders.
Registering Your Entity
When you decide what type of Mississippi business entity to form, you'll need to create an online account. Your filing fee varies based on your entity type and can be paid by credit card or e-check, or by mailing a paper check to PO Box 136, Jackson, MS 39205. Limited partnerships and limited liability companies must register with the Business Services Group. Sole proprietors and general partnerships do not need to register with the Secretary of State but may need state or local permits or licenses to operate.
Fees for Mississippi business entities are as follows:
- $25 for a domestic general partnership
- $50 for a domestic profit or nonprofit corporation, domestic limited or limited liability limited partnership, or domestic limited liability company (LLC)
- $100 for a foreign nonprofit corporation
- $250 for a foreign LLC, domestic or foreign limited liability partnership, or foreign limited liability limited partnership
- $500 for a foreign profit corporation
Although an organizational document for your new entity is not required by the state, you should consider creating a legally binding document that details the operating procedures for your business. This can help mitigate later disagreements.
Licensing and Permits
The types of business licenses and permits you'll need depends on the type of enterprise and location. Check with your local town clerk to make sure your company is in compliance with local laws before operating.
Businesses that sell tangible property or certain services such as rental or fabrication must register with the Mississippi Department of Revenue for a sales tax ID number. This is sometimes called a seller's certificate. If you sell your products through wholesalers and resellers, you must give them your sales tax number. Mississippi sales tax is not charged for customers who buy the product outside the state.
Business Finance and Taxation
Open a bank account for your business and keep all company finances completely separate from your personal finances. You must apply for an employer identification number (EIN) with the IRS in order to pay federal income taxes. This will also allow you to conduct financial business and hire employees.
Marketing Your Business
Your company website will tell the world what you're all about. You should also promote your business to your friends, neighbors, and acquaintances, on local web pages and databases, and through area clubs and organizations.
Certificate of Good Standing
Also called a certificate of existence, this document may be required by banks when you open an account or apply for a loan. You might also need it when you want to do business in a state other than Mississippi. The certificate of good standing proves that you are registered and have paid all required fees with the secretary of state. You can get a copy for a $25 fee.
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