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TLDR

• In Mississippi, small businesses are backed by industrial and academic industries. According to the Mississippi Development Authority, “Mississippi has so much talent, research and innovation that it’s like lightning in a bottle – ready for executives and entrepreneurs to take their business further than they ever thought possible.”
• With Mississippi’s “less-crowded market and a heaping serving of untapped opportunity,” the state can offer numerous benefits for your startup. Mississippi also enjoys a supportive startup environment through entities such as the Mississippi Development Authority and Innovate Mississippi.
• Before registering, though, it’s a good idea to identify some key foundational aspects of your company, such as creating a business plan. In drafting your business plan, you’ll want to consider your target buyer, go-to-market strategy, marketing and sales approaches, location, and ownership, to name a few topics.
• You also must determine your organization's legal entity structure. Your chosen business entity determines the next steps in registering your Mississippi startup, in addition to which taxes you’ll pay and how much personal liability you might have.
• If your startup is either a sole proprietorship or a general partnership, you do not have to register your Mississippi startup.
• In addition to choosing your entity's structure, you'll also have to select your startup's name. When picking a name for your Mississippi startup, you’ll need to distinguish it from any other business names already registered with the state.
• Finally, after completing the above steps, it's time to submit your formation forms to Mississippi’s Secretary of State’s office. For new entities, Mississippi provides sample forms for your use or review.
• Depending upon your chosen entity for your Mississippi startup, you need to understand the annual filing requirements in addition to any owed state tax.

Mississippi is known for many things, including catfish, magnolias, and bluegrass music. But Mississippi is also known for business—both large and small. Mississippi’s largest employers include Sanderson Farms, Mississippi State University, and the University of Mississippi Medical Center.

But big businesses don’t get all the attention in the state, however. In Mississippi, small companies are backed by industrial and academic industries. According to the Mississippi Development Authority, “Mississippi has so much talent, research and innovation that it’s like lightning in a bottle – ready for executives and entrepreneurs to take their business further than they ever thought possible.”

With Mississippi’s “less-crowded market and a heaping serving of untapped opportunity,” the state can offer numerous benefits for your startup. As you determine where to locate your new business, this article will explore the in’s and out’s of registering your startup in Mississippi.

When Do You Need to Register a Business in Mississippi?

When you register a business in Mississippi, you'll need to satisfy several requirements to register your startup successfully. Before registering, though, it’s a good idea to identify some key foundational aspects of your company, such as creating a business plan. 

In drafting your business plan, you’ll want to consider your target buyer, go-to-market strategy, marketing and sales approaches, location, and ownership, to name a few topics. In addition, you can check in with the U.S. Small Business Administration, guiding you on how to create a business plan in addition to providing market research and competitive analysis for your Mississippi startup.

The State of Mississippi also offers startup founders numerous resources.

Once you’ve identified some of the basics about your startup’s operation, it is then time to register your startup. Below, we've broken these requirements into an easy step-by-step process.

Determine Your Startup’s Entity Structure

Before you register your startup in Mississippi, you must first determine your organization's legal entity structure. Your chosen business entity determines the next steps in registering your Mississippi startup, in addition to which taxes you’ll pay and how much personal liability you might have.

In Mississippi, you may choose to register as a:

• Corporation
• Limited Liability Company (LLC)
• Limited Partnership (LP)

If your startup is either a sole proprietorship or a general partnership, you do not have to register your Mississippi startup. A sole proprietorship is when one individual owns and operates a startup, and any earnings (or losses) are passed through to the founder. In a general partnership, two or more founders own and run a startup. Again, like a sole proprietorship, the earnings or losses are passed through to the founders. Additionally, and here’s the downside, the founder has unlimited personal liability for both a sole proprietorship and a general partnership, with no protections built in.

If, on the other hand, you choose a corporation, limited liability company, or partnership structure for your Mississippi startup, you must follow specific steps to register your business in Mississippi. For example, if you structure your startup as a limited liability company, you’ll need to file a Certificate of Formation application with Mississippi’s Secretary of State.  If you decide to form a corporation for your startup, you’ll need to file an Articles of Incorporation application.

You may want to visit your accountant before choosing a business structure, so you are familiar with the tax advantages and disadvantages of each.

Choose Your Startup’s Name

In addition to choosing your entity's structure, you'll also have to select your startup's name. When picking a name for your Mississippi startup, you’ll need to distinguish it from any other business names already registered with the state.

Additionally, you’ll need to follow Mississippi’s naming conventions, such as using proper designations such as “LLC” or “Limited Liability Company,” as applicable, in your startup’s name. Additionally, certain words are prohibited unless approval is received. For example, startups cannot use the words like “insurance,” “bank” or “indemnity” without first getting the permission of the Mississippi’s Secretary of State’s office.

You can check for available names by visiting Mississippi’s business search.

Suppose you’re not ready to register your Mississippi startup, but you want to preserve your company's name. In that case, you may reserve your business name while you’re completing your registration process. You may reserve a name for 180 days, with the ability to renew the name reservation at the end of that period. You’ll also need to pay a $25 filing fee.

To reserve your startup’s name, you’ll need to create an online account first before reserving your name. Unfortunately, Mississippi no longer accepts paper applications for name reservations.  

If approved, your Mississippi startup’s name is reserved for 30 days, including a $25 fee for filing online and $35 for filing a paper application. If you need longer than the initial 30-day period, then you’ll have to reapply to reserve the name, paying a filing fee again. Typically, the processing time is 15 days unless you pay for the determination to be expedited.

Identify Your Registered Agent

Next, you need to identify and obtain a registered agent. A registered agent is “a person or entity appointed to accept service of process and official mail on your business’ behalf,” typically legal or tax documents.

A registered agent can be an individual, such as the startup’s attorney or even a business member, as long as the individual is over 18 years of age. However, you can also hire an entity to serve as the registered agent.

A registered agent must have a street address in Mississippi and be physically present at that address to receive service. A P.O. Box may not be used. Mississippi requires a registered agent for each Mississippi entity.

Submit Your Formation Forms

Finally, after completing the above steps, it's time to submit your formation forms to Mississippi’s Secretary of State’s office. For new entities, Mississippi provides sample forms for your use or review.

Let's look at a specific example. If you choose to register as a limited partnership in Mississippi, you will file a Certificate of MS Limited Partnership to create your startup. And, as stated above, if you structure your startup as a limited liability company, you’ll need to file a Certificate of Formation application with Mississippi’s Secretary of State. Finally, if you decide to form a corporation for your startup, you’ll need to file an Articles of Incorporation application.

In addition to your formation forms, you’ll also want to check if any additional documents are required at the city, county, or state level, such as one for a business license.

How Much Does It Cost to Register a Business in Mississippi?

Depending upon your chosen entity for your Mississippi startup, you need to understand the annual filing requirements in addition to any owed state tax. For example, for registering a corporation, limited partnership, or limited liability company, you must pay a $50 filing fee. You will also need to file annual reports to keep your startup current.

Additionally, if you register a business in Mississippi, you need to understand your tax obligations. For example, depending on your startup entity, you’ll need to pay certain taxes through Mississippi’s Department of Revenue, such as sales and use tax, withholding tax, other employment taxes, and corporate income and net worth tax.

To understand if and when you are subject to Mississippi’s business and employment taxes, you should consult with an experienced accountant.

Benefits of Registering Your Startup in Mississippi

Mississippi founders can look forward to the many benefits of locating their startup in Mississippi. Here are some key points to consider:

• Mississippi enjoys a supportive startup environment through entities such as the Mississippi Development Authority and Innovate Mississippi.
• The state also has high-speed online store growth.
• Mississippi founders have numerous options for grants, training, technical assistance, and resources for minority startups and small businesses.
• Mississippi focuses on continual innovation through entities such as Innovate Mississippi.
• Mississippi has the lowest cost of living in the U.S. The state also has the lowest housing costs in the country, with average homes costing $128,000, and the average rent for a two-bedroom apartment is $795 monthly.

Limitations Associated with Registering Your Startup in Mississippi

Here are some drawbacks to starting a business in Mississippi:

• Mississippi’s tax environment is currently in the bottom half of the country, coming in at 32nd.
• Mississippi’s economic environment grows slower than most states.
• Like other states, many startups aren’t sound candidates for traditional financing through banks or credit unions. So access to capital is challenging. Instead, many Mississippi founders may find luck with angel investor networks or bridge loans. But getting that funding is often a challenge.
• Mississippi also has the lowest median household income at just over $43,000 yearly.

We can help!

At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business. If you're looking for help registering your Mississippi startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Get in touch to learn more.

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Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.