Mississippi has a responsive and cooperative state government that is ripe with opportunities and provides access to key markets. Additionally, Mississippi is one of the top 10 states in the US with the lowest cost of doing business.
The following step-by-step guide will show you how to start a corporation in Mississippi.
1. Select a name for your corporation
The first step in starting a Mississippi corporation is deciding on a corporation name. Mississippi does have specific naming requirements when it comes to choosing a business name, so you’ll need to adhere to these rules before settling on your Mississippi corporation name.
General corporate name guidelines
Ensure that you check the availability of the name you’re contemplating on the Secretary of State’s records online. Then use the following guidelines when choosing a name for your business:
- Mississippi corporation names may be reserved for up to 180 days by submitting an application to the state’s office.
- Additionally, your corporation name must contain the words Inc., corporation, limited, company, or abbreviations of any of these words
- Additionally, the name must be significantly different from existing businesses in the state or businesses that are authorized to transact in the state of Mississippi. This includes reserved names as well
- Furthermore, your Mississippi corporation name should not suggest that it is created for any unlawful or illegal purposes. But the name should suggest that it is organized or formed for the purposes outlined in your company’s Articles of Incorporation
The Mississippi state statute provides additional guidance on naming a business entity in the state.
Quite a few businesses tend to overlook the significance of trademarking their business name and logo. Trademarking your Mississippi corporation name helps protect your brand from intellectual property theft as well as misuse. You can file an application with the United States Trademark and Patent Office to have your Mississippi corporation name trademarked.
A corporation’s entity name is its legal name. It protects the name of your business at the state level and depending on the structure of your business or type of business, the state may require you to register a legal entity name. However, this is how the state identifies your business.
DBA (Doing-business-as) name
Any business or type of corporation conducting business under different names requires a DBA application in Mississippi. A DBA is known as a doing business as name, fictitious name, or assumed name in many states. A DBA does not replace the original or entity name of the business; however, it does allow the business to transact using this name.
In order to file a DBA in the state of Mississippi, the corporation owner will need to provide their name and address as well as the fictitious business name to be registered. Thereafter, you’ll receive a certificate of authority to conduct business in Mississippi under a DBA.
2. Nominate a registered agent
A Mississippi corporation is required by law to maintain a resident agent as well as a resident office in the state. A resident agent often goes by the name of registered agent, statutory agent, or service of process agent.
The role of this individual is to accept legal documentation and government correspondence on behalf of your Mississippi corporation.
You may recruit any individual or natural person to be your Mississippi corporation’s registered agent; however, they are a few requirements that must be met:
- The Mississippi registered agent must be 18 years of age or older
- The Mississippi registered agent must have a physical address in the state
- The Mississippi registered agent must maintain availability during normal business hours
- The Mississippi resident agent must consent to the appointment
3. Appoint initial directors at the organizational meeting
The next step in the process is essential to form your Mississippi corporation legally. The organizational meeting is basically the first shareholder meeting where the shareholders will approve and ratify the actions of the incorporators.
Shareholders will also be responsible for approving shared values, appointing corporate officers and corporate directors if needed, and undertaking a few other initial tasks.
Meeting minutes will also need to be recorded and kept in the company’s corporate records to record all actions and decisions taken by the board of directors.
4. File Articles of Incorporation
The Mississippi Articles of Incorporation need to be filed to legally set up your business in the state. The Articles of Incorporation is also known as a Certificate of Incorporation and is essentially a document that officially creates your corporation. The document has to cover certain basics such as:
- The name of your Mississippi corporation
- The email address of your Mississippi corporation
- The NAICS code
- The address and name of your corporation’s registered agent
- The number of authorized shares the company plans on issuing
- The addresses and names of the company’s incorporators
Once you’ve compiled the relevant information, go ahead and file the Articles of Incorporation online with the Mississippi Secretary of State.
5. Create and approve bylaws
Creating and improving corporate bylaws on behalf of the Mississippi corporation is necessary, although it’s not a legal requirement. However, it is necessitated by the fact that the corporate bylaws determine how your company will be governed and operated.
Essentially it’s a Constitution for your corporation and makes the priorities and rules transparent for all involved. Therefore, your bylaws should include the following information:
- The process of holding meetings, voting procedures, and electing directors and officers
- The process of operating your corporation
- The role that corporate directors and corporate officers must fulfill
- How company records will be stored and managed
- The process of handling corporation disputes and how they’re going to be resolved
- The process of amending or adding bylaws in the future
- The date of the annual shareholders’ meeting
- The process of negotiating company contracts
You may download bylaws templates and custom these templates to suit your corporation’s needs
6. Select a share structure
One of the tasks to undertake in the process of forming a corporation in Mississippi is to issue stock or issue shares of stock. The value of shares must be agreed upon, and so must the value of assets being exchanged for shares. Additionally, you may choose to issue a bill of sale, shareholder agreement, or stock certificate to shareholders.
7. Obtain an EIN
All businesses in the state of Mississippi need an Employer Identification Number, not just those who plan on hiring employees. The Employer Identification Number is often referred to as an EIN or FTIN and stands for Employee Identification Number or Federal Tax Identification Number.
The EIN is issued by the IRS or federal government and is used as a form of identification for business entities. Consequently, the EIN is useful for opening up a corporate bank account, submitting paperwork for tax purposes, and hiring people to work for your corporation.
One of the easiest ways to obtain an EIN is to apply online via the IRS website. The application is free of charge, and the EIN is of no cost to you. However, if you’d prefer to apply via mail, download the IRS Form SS-4 and then have it mailed to the following address:
Internal Revenue Service
Cincinnati, OH 45999
8. File Mississippi state taxes
Business owners in the state of Mississippi may be liable for certain corporate taxes based on the business structure or business type:
- Corporate income tax: Mississippi’s corporate income tax is imposed at marginal rates of between 3 to 5% of taxable income. Additionally, corporations are liable for corporate franchise tax.
- Corporate franchise tax: Mississippi corporations, including S corporations, are liable for corporate franchise tax, which is based on an element of the business’s net worth.
- Employer taxes: All businesses in the state of Mississippi that want to hire people to work for the company will need to register with the Mississippi Taxpayer Access Point website for Mississippi employer taxes.
- Mississippi sales tax: All businesses selling physical products will need to register on the Mississippi Taxpayer Access Point website for a seller’s permit.
9. Mississippi business licenses and permits
While Mississippi does not require a statewide business license, depending on the county or city operating in, one or more permits and licenses may be required:
- Resale certificate: When purchasing merchandise to resell, you need to have a Mississippi resale certificate. This helps you avoid paying sales tax for products that will be resold.
- Mississippi business tax number: If you are involved in the sale of tangible personal property, then you are subject to Mississippi sales tax and, therefore, must register for a sales tax permit for the Mississippi Department of Revenue.
- Professional license: If you’re running a professional corporation and offering services such as tattoo artists, foresters, contractors, and more, then a professional license is in order.
Additional information on filing fees and licensing requirements for professional corporations may be found on the state of Mississippi website.
10. Annual report requirements in Mississippi
Annual reports are, in fact, required in the state of Mississippi. They need to be submitted before the 15th of April each year. You can file the annual report by creating an account online on the Secretary of State Businesses Services Division website.
11. Costs of starting a corporation in Mississippi
The filing fees below apply to all Mississippi corporations:
- Name reservation: $25
- DBA name: $25
- Articles of Incorporation: $50
- Annual report: $25
- Mississippi Certificate of Good Standing: $25
Next steps after forming a corporation
After forming your Mississippi corporation, there are a few additional steps to consider. For example, you need to maintain personal asset protection. Here are two ways that you can achieve this:
Get a business bank account
A business bank account separates your personal assets from your businesses. Therefore, it also simplifies the accounting and tax planning processes and legitimizes your Mississippi corporation. You need to submit your Employer Identification Number along with formation documents in order to open up a corporate bank account.
Open a business credit card
A credit card for your business is much like a business account as it helps your corporation separate personal and professional finances and expenses.
Additionally, the advantage of having a business credit card is that it helps build your business’s credit score, which ultimately allows you to have access to capital as and when you need it. The higher your business’s credit score, the higher the amounts of loans and credit limits you’ll be able to qualify for.
Each business structure comes with its own advantages and disadvantages. For example, sole proprietorships are preferred as they are simpler to form and require less legal filing. Limited liability companies have no restrictions on the number of members allowed, and they offer flexibility in structuring the corporations’ management.
A C corporation or a C corp. is the default corporation structure under the Internal Revenue Service rules. C corporations are liable for double taxation. S corporations have elected special tax status with the IRS and enjoy certain tax privileges.
Yes, corporations are required to hold at least one annual shareholders’ meeting per year. The meeting should preferably be called just after the corporation’s fiscal year.
It is recommended that you register a domain name the moment you have an idea for a business, brand, or product. This is because if someone else has the same idea, they could possibly register the domain name before you.
Nonprofit corporations are formed to serve the greater good of mankind and are usually designed for religious, charitable, and educational purposes. They are considered separate legal entities and do not have owners but founders.