How to Qualify a Foreign LLC in Mississippi

Explore our guide for crucial insights on obtaining a foreign LLC qualification in Mississippi, ensuring a smooth entry into the thriving business landscape of the Magnolia State.

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Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!

But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.

It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.

For example, if your LLC is registered in Alabama and you are looking to open a second location in Mississippi, you may need to complete a foreign qualification in Mississippi before you can expand there.

Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.

What happens if I fail to foreign qualify before doing business in Mississippi?

Foreign qualifying is essentially asking permission to do business in the state of Mississippi. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Mississippi yields consequences that are far costlier than registering in the first place.

If you fail to foreign qualify, your business will be prohibited from enacting or maintaining an action or proceeding in Mississippi court. Plus, the Attorney General may cut you off from doing business in the state and assign the Secretary of State as your registered agent.

The prospect of losing your LLC’s income and legal footing isn’t a particularly encouraging one, so it’s best to foreign qualify as soon as you begin doing business. Despite these penalties, your existing contracts in Mississippi would still be considered valid, and you would still be able to defend a proceeding or lawsuit in court.

The Mississippi LLC Act, Section § 79-29-1013 provides further insight into potential penalties.

What is considered “doing business” in Mississippi?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Mississippi? The state’s LLC Act doesn’t give specifics on what this phrase means, but other state and tax laws tell us that you are considered to be “doing business” in most states and required to foreign qualify if:

  • Your LLC operates offices, warehouses, or stores or has another physical presence in the state.
  • Your LLC has salespeople, agents, or representatives doing business on its behalf in the state.

Then there are LLC taxes. While LLCs are typically pass-through entities, depending on how you’ve structured your business, you might need to pay certain corporate taxes. By foreign qualifying in Mississippi, you’re notifying the state of your tax status. If they don’t know to apply any particular taxes, you may end up with more severe fines in the future. For additional information on Mississippi taxes, visit the Department of Revenue website. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.

If you’re unsure whether or not you need to file for a foreign qualification in Mississippi, we suggest seeking legal counsel.

Could I be exempt from foreign qualifying in Mississippi?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Mississippi. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

  • Maintaining, defending, or settling a lawsuit in a Mississippi court
  • Holding LLC member and/or manager meetings or other activities solely concerning internal affairs
  • Maintaining bank accounts
  • Holding offices/agencies for the transfer and/or exchange of the LLC’s own securities
  • Selling products or services through independent contractors
  • Collecting debts or creating and/or acquiring indebtedness
  • Owning real or personal property in Mississippi
  • A single transaction – isolated from other business activity – taking place within 30 days
  • Transacting business in interstate commerce

Do your business activities in Mississippi appear on this list? Are they the only business activities you execute there? Then you’re most likely off the hook with foreign qualification. However, it’s a good idea to glance over the full list in the state’s LLC Act and seek legal advice if you’re unsure.

How to Foreign Qualify Your LLC in Mississippi

Foreign qualification in Mississippi is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Mississippi, you will need to do so online, as the Secretary of State no longer accepts paper documents. Here’s how.

  • Go to the online filing system
  • Log in or create an account
  • Under the “Name Reservation and Formation Filings” section, select the option to register an out-of-state business
  • Follow the on-screen prompts to enter your business information
  • Choose your payment option (see below)

At the end of your online form, you will see a screen that asks you to select a payment method for the $250 fee. You can either pay online with a credit/debit card, or you can print out your document and mail it, with a check, to:

Mississippi Secretary of State

P.O. Box 136

Jackson, MS 39205-0136

One more thing: you’ll also need to submit a Certificate of Good Standing from the state where your LLC was formed, dated within 60 days of your filing. Contact your home state’s government to obtain one.

Since the whole process is electronic, the processing time is fairly quick, typically 24 hours, so your LLC should be registered in Mississippi soon!

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.

Mississippi Secretary of State Contact Information

Jackson Address:
401 Mississippi Street
Jackson, MS 39201
601-359-1350
Coast Address:
1141 Bayview Avenue, Suite 120
Biloxi, MS 39530
228-432-0541
Secondary Jackson Address:
125 S. Congress Street
Jackson, MS 39201
601-359-1633
Website:
https://www.sos.ms.gov/

Name Requirements to Remember

Before you hit send on that application, double-check to make sure that your LLC name follows Mississippi’s business naming requirements. You wouldn’t want your name to cause a hitch in the foreign qualification process. As a reminder, your LLC name must:

  • Contain the words “limited liability company” or the abbreviations “L.L.C.” or “LLC”
  • Not use any of the following:  “bank,” “banker,” “bankers,” “banking,” “trust company,” “insurance,” “trust,” “corporation,” “incorporated,” “partnership,” or “limited partnership” without permission
  • Be completely distinguishable from all other names on record with the Mississippi Secretary of State (perform a Mississippi LLC name search to make sure the name you want is available)

You can also reserve your Mississippi business name if you’re not quite ready to foreign qualify your LLC.

Frequently Asked Questions

  • We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.

  • You’ll typically need to wait roughly 24 hours for the state to process your document filing. Thanks to its online-only format, Mississippi has some of the nation’s fastest turnaround times.

  • Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Mississippi state law. Unfortunately, unlike most states, Mississippi does not have a convenient centralized license information webpage. You’ll need to contact any relevant state regulatory agencies and county/municipal government resources to find out if you need to get any licenses or permits for your Mississippi LLC.

  • Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Mississippi LLC Annual Report.

  • The overall costs of operating a Mississippi LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.

  • The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.

    Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.

  • Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Mississippi registered agent.

    The service then files your registration with the state to qualify your LLC to do business in Mississippi.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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