The professional limited liability company (PLLC) structure offers some advantages over other business types and has proven consistently popular with licensed professionals. The following guide will give you an outline of a Mississippi PLLC and the main steps you’ll encounter if you choose this structure.
Who can form a PLLC in Mississippi?
You might be wondering, what is a professional limited liability company in Mississippi? In a nutshell, it’s a company founded by one or more licensed professionals who typically work in the same profession. The PLLC is an entity whose members retain their independence in tax matters and, in most cases, liabilities. However, the members can still share liabilities if they involve wrongdoing.
The list below includes some, but not all, licensed professionals who can form a Mississippi PLLC.
Alternatively, you can choose another type of entity. These include professional corporations (PCs) and professional limited liability partnerships (PLLPs). A PC is controlled by shareholders rather than members, while a PLLP represents a group of partners. Both structures have differences in how they are taxed and managed.
Whichever framework you choose, you’ll need to create an account with the Mississippi Secretary of State website since most of the filing is online.
Choose a name for your Mississippi PLLC
Strict rules govern the naming of a Mississippi professional limited liability company. The name must contain the words “professional limited liability company” or a recognized abbreviation, such as “PLLC.” It must also be distinguishable from other business names filed in Mississippi. You can search online at the Mississippi Secretary of State website to see if your name is available.
Once chosen, you have the option of reserving your business name with the Mississippi Secretary of State until you’re ready to file. ZenBusiness can complete this step for you by reserving it for up to 180 days. We can also help you claim a suitable domain name for your website.
Select a registered agent
Like other states, Mississippi requires LLCs and PLLCs to designate a registered agent when filing a Certificate of Formation. ZenBusiness’s registered agent services can help new firms find a suitable agent in their area. The agent’s purpose is to receive documents on behalf of the PLLC, such as summons and subpoenas. The Secretary of State requires Mississippi PLLCs to have an agent available daily during business hours, which is why many businesses choose to hire a third-party agent.
Complete and file a Mississippi Certificate of Formation
In Mississippi, a PLLC must file a Certificate of Formation with the Secretary of State. This process must be completed online, and a $50 filing fee is required. ZenBusiness can give you the information you need to prepare this certificate for the PLLC. The document must include the following:
- The company’s registered name
- Its business email address, although a personal email address is acceptable
- The NAICS Code that identifies the type of business
- The name and address of the company’s registered agent
The Certificate of Formation should identify the Mississippi professional limited liability company as member-managed or manager-managed. Member-managed occurs when members oversee the day-to-day activities of your PLLC and make decisions on the PLLC’s behalf. Manager-managed occurs when you appoint a member(s) or hire an individual(s) from outside the PLLC with or without a stake in ownership to manage your PLLC.
Additionally, you are required to file several additional documents if your PLLC has employees. These will include:
- Employment tax information
- Workers’ compensation information
Handle your Mississippi tax obligations
Almost all businesses require a federal Employer ID Number (EIN). The IRS uses this number to identify businesses for income tax purposes. The Mississippi Secretary of State recommends members complete all business formation filings before applying for a tax identification number. ZenBusiness can help you apply for your EIN number.
Most Mississippi professional limited liability companies will need to apply for one or more state tax ID numbers, licenses, or permits. You’ll need to contact the Mississippi Department of Revenue to register to pay the taxes needed to operate your LLC. Depending on the type of services you offer, these might include:
- Sales and use tax
- Unemployment insurance tax
- Income tax withholding
You may also need to pay local taxes and acquire business licenses. Looking at the websites for your county and city governments is a good starting point for local information.
Obtain all Mississippi business licenses and permits
Depending on the nature of your PLLC, you may have to apply for additional registrations and provide certifications to other state agencies. In some cases, you may have to pass professional examinations.
You should note that it’s your responsibility to obtain all the federal, state, and local licenses and permits you’ll need to form the PLLC. There is no central location for all licenses as some may be industry- and job-specific. Professional licenses are required for each member. We offer a business license report service to help you determine what licenses and permits your business will need.
Acquire insurance for your Mississippi professional limited liability company
Although it’s another purchase, you should adequately insure your new business. In many cases, insurance is a tax-deductible business expense. It’s important that you protect your business against claims by third parties whether through vehicle insurance or general liability insurance. Additionally, as a licensed professional, taking out professional liability or malpractice insurance is often a good idea even if it’s not required. If your PLLC has five or more workers, you usually need workers’ compensation insurance. Other considerations and exemptions may apply.
Open a business bank account
One of the final tasks you should complete before starting your PLLC is to open a business bank account. This is a vital step in separating the business and personal income of your firm’s members. Along with ZenBusiness’s worry-free compliance services, this can help your PLLC remain in good standing. Typically, the bank will ask for tax ID numbers, such as an EIN, the Certificate of Formation, and personal identification.
Ready to kick start your business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or looking to register a domain, our goal is to help you stay on the road to success. Check out our services, and contact us today to see how we can help you grow your company.
Mississippi PLLC FAQ
What are the filing fees for a Mississippi PLLC?
The following forms are among the most commonly used: Certificate of Formation: $50; Application for Name Reservation: $25; Registered Agent/Office Statement of Change: $10.
Do I need a lawyer to form a Mississippi PLLC?
Although it’s not a legal requirement, the Mississippi Secretary of State recommends consulting a lawyer. Ideally, the lawyer will have experience in dealing with businesses in your location that are similar to your PLLC.
Does Mississippi have a professional corporation (PC) entity?
Yes. A PC is an alternative business framework for licensed professionals. It’s a corporate entity that’s subject to different regulatory requirements and is usually taxed as a C corporation.
Can professionals from different fields form a Mississippi PLLC together?
It’s possible to form a PLLC that represents more than one profession, but it’s not always appropriate. The choice of professions within one entity could confuse potential customers and make marketing the business problematic. PLLCs typically represent professionals that provide related services.
How will I be taxed as a Mississippi PLLC?
Unless it applies for a different tax status, a Mississippi PLLC is typically taxed as a pass-through tax entity. This means that members are taxed based on their individual incomes and filing status.