There are a number of steps you need to follow if you would like to start your own successful business in Mississippi, which you will find in this guide.
Mississippi has the lowest labor cost and the lowest cost of living in the U.S. making it attractive to employers.
How to Start a Business in Mississippi:
1. Form a business entity.
If you would like to register a business in Mississippi, you need to create a Mississippi Online Business Services Account by going to startabusiness.org. Unlike many states where online registration is optional, the Mississippi Secretary of State (SOS) requests all business registration and relevant documentation to be submitted through their online portal.
The SOS also advises prospective business owners to research the availability of their name at startabusiness.org before registering their business.
You don't need to file any business documents if you are starting a sole proprietorship or a general partnership in Mississippi. To form a limited liability partnership (LLP), you need to file a Statement of Qualification with the Mississippi SOS.
If you are forming a limited liability company (LLC) in Mississippi, you need to file a certificate of formation with the SOS. If you are creating a corporation, you need to file articles of incorporation with the SOS. S corporations also need to file an IRS Form 2553, and an Election by a Small Business Corporation with the IRS.
You need to appoint a registered agent in Mississippi for service of process if you are starting an LLC or a corporation.
2. Register your business name with the Secretary of State.
To file a name reservation with Mississippi's SOS you need to create a Mississippi Online Business Services Account and pay a $25.00 filing fee.
You can file a name reservation as early as six months prior to the registration of your business by going to startabusiness.org. Mississippi's SOS recommends you do a name search (see above) before filing a name reservation.
3. Get an Employer Identification Number (EIN).
You can apply for your Employer Identification Number (EIN) once you receive confirmation of your business's registration from Mississippi's SOS. Your EIN, also known as a Federal Employer Identification Number (FEIN), is your business's equivalent of a social security number.
Registering an EIN is free, and takes only a few minutes. Go to irs.gov to apply for an EIN.
Once you have an EIN, the IRS identifies you as a legitimate, tax-paying entity, and you are allowed to hire staff. Other entities you do business with such as wholesalers will ask you for an EIN as well.
If your business in Mississippi does not employ staff or is not taxed separately from you, you are not required by law to obtain an EIN. But you should still consider getting one. Banks often ask for an EIN to open a business account, or to loan your business money or to issue credit cards. You need an EIN when filing tax returns (except if you trade as a sole proprietorship), and other entities you do business with, such as wholesalers, will ask you for an EIN.
4. Open a business bank account.
You can open a business bank account once you receive your EIN.
A business bank account keeps your business funds separate from your personal funds, offering you limited personal liability protection in this way. It also keeps your customers' personal information secure, and offers them purchase protection.
When you open a business bank account, it is important for you to select the right type of bank account, provide the correct documentation and deposit funds into the account.
Once you have a business bank account, your staff can do your business's daily banking tasks.
5. Register with the Mississippi Department of Taxation.
To register your business to pay tax to Mississippi's Department of Revenue, go to dor.ms.gov.
In Mississippi all in-state businesses that have retail sales must register at tap.dor.ms.gov for a sales tax permit and number. Out-of-state persons, corporations, or other entities that operate a business in Mississippi need to register, collect, and remit sales taxes as well.
If you don't have a place of business in Mississippi, but you are represented by salespersons living in this state who solicit or accept orders for goods delivered here, you need to collect Mississippi Use Tax.
To learn more about your business's taxation in Mississippi, go to dor.ms.gov.
6. Apply for Mississippi licenses and permits.
The State of Mississippi does not license all businesses. Your business in Mississippi may be required to pass examinations, file additional registrations or provide certifications to other boards or agencies in this state. To learn more, go to ms.gov.
You will also need to check with your Town or City Clerk, or your local Small Business Development Center (SBDC) counselor to determine local licensing requirements.
You can also use SBA's Business License Permit Search tool by going to sba.gov to help you identify which licenses and permits your business in Mississippi needs.
7. Purchase insurance.
In Mississippi businesses with five or more regularly employed workers need to pay workers' compensation insurance. This insurance provides your employees with medical benefits and wage replacement if they are injured in the course of their employment.
If your business in Mississippi owns or uses motor vehicles for business purposes, automobile coverage is mandatory as well.
It is always good to protect your business with insurance. Additional types of insurance that you may want to purchase include:
- Health insurance.
- Business interruption insurance.
- Property insurance.
- Cyber insurance.
- Liability insurance.
8. Hire employees and report them to the state directory.
Once your business in Mississippi starts hiring staff, you are required by law to report newly hired and re-hired employees to a state directory within 15 days. This applies even if they work one day only, and are terminated before fulfilling the new hire reporting requirement.
You can visit the Mississippi New Hire Reporting Center at ms-newhire, and go to the bottom left of the page to report your new employees.
In Mississippi you are required to report temporary employees, but not independent contractors. The IRS provides clear guidelines on what defines an independent contractor in Mississippi.
You also need to register for Unemployment Insurance Tax through the Mississippi Department of Employment Security at mdes.ms.gov and sign up for Employee Withholding Tax through the Mississippi Department of Revenue at dor.ms.gov.
9. Keep up with ongoing requirements.
There are requirements that are ongoing once you start your business in Mississippi.
For instance, corporations and LLCs must file an annual report with the Mississippi SOS.
In Mississippi, it is important that you file your business's sales tax returns on time to avoid late payment fees. The total amount of sales tax your business collects will determine how often you need to file returns. The more sales tax your business collects, the more often you need to file returns.
Bear in mind that you are required to file returns in Mississippi even if you don't have sales tax to report.
Starting a Business in Mississippi FAQs:
How do I form an LLC in Mississippi?
If you are forming an LLC in Mississippi, you need to create a Mississippi Online Business Services Account by going to startabusiness.org. You need to file a certificate of formation with the SOS to form an LLC in Mississippi.
How much does it cost to set up an LLC in Mississippi?
It will cost you a $50.00 filing fee to set up a domestic LLC in Mississippi.
How do I register my business name when starting an LLC in Mississippi?
You can file a name reservation as early as six months before starting your LLC in Mississippi by going to startabusiness.org. Mississippi's SOS recommends you do a name search before filing a name reservation. You also need to pay a $25.00 filing fee.
How do I get an EIN for my LLC in Mississippi?
You can apply for your EIN once you receive confirmation of your LLC's registration from Mississippi's SOS. Registering an EIN is free, and it takes only a few minutes. Go to irs.gov to register.
Do I need a business license to start a business in Mississippi?
Not all businesses require a state business license to start a business in Mississippi. Depending on your business type, you may need local and/or state licensing.
Fees for Starting a Business in Mississippi:
Filing Fee for Domestic Profit Corporation
Filing Fee for Domestic Non-Profit Corporation
Filing Fee for Foreign Profit Corporation
Filing Fee for Foreign Non-Profit Corporation
Filing Fee for Domestic LLC
Filing Fee for Foreign LLC
Filing Fee for Domestic Limited Partnership
Filing Fee for Domestic Limited Liability Partnership
Filing Fee for Domestic Limited Liability Limited Partnership
Filing Fee for Domestic General Partnership
Filing Fee for Foreign Limited Partnership
Filing Fee for Foreign Limited Liability Partnership
Filing Fee for Foreign Limited Liability Limited Partnership
Mississippi Agencies and Boards:
State Agency or Board
Board of Architecture
1 (601) 856-4652
Department of Agriculture and Commerce
1 (601) 359-1100
Board of Chiropractic Examiners
1 (662) 773-4478
State Board of Funeral Service
1 (601) 932-1973
Examiners for Licensed Professional Counselors
1 (601) 359-1010
Board of Cosmetology
1 (601) 359-1820
Board of Dental Examiners
1 (601) 944-9622
Board of Engineers
1 (601) 359-6160
Department of Environmental Quality
1 (601) 961-5171
Board of Contractors
1 (601) 354-6161
Examiners for Social Workers &Marriage/Family Therapists
1 (601) 987-6806
1 (601) 636-0443
Department of Public Safety
1 (601) 987-1212
Board of Registered Professional Geologists
1 (601) 354-6370
Alcoholic Beverage Control Office
1 (601) 856-1301
State Department of Health
1 (601) 576-7400
Department of Transportation
1 (601) 359-7001
Institutions of Higher Learning
1 (601) 432-6684
Real Estate Commission
1 (601) 321-6970
Department of Insurance
1 (601) 359-3569
Board of Massage Therapy
1 (601) 732-6038
Board of Pharmacy
1 (601) 899-8880
State Board of Optometry
1 (601) 919-1343
Board of Medical Licensure
1 (601) 987-3079
Mississippi Auctioneer Commission
1 (601) 750-4909
Board of Nursing Home Administrators
1 (601) 362-6914
State Board of Nursing
1 (601) 957-6300
Mississippi Agricultural Aviation Association
1 (662) 299-7836
Department of Banking and Consumer Finance
1 (601) 321-6901
Board of Barber Examiners
1 (601) 359-1015
With great online resources and affordable labor costs, the Magnolia State is a good place to start your new business. These steps and tips will assist you to create a legal business entity in Mississippi.
To learn more about starting your own business in Mississippi, read through How to Start a Business.