How to Transfer LLC Ownership in Mississippi: 2025 Updates

If you have an LLC in Mississippi and you wish to discontinue it, you don’t always have to dissolve it. You can transfer the ownership, and it will keep running the way it was. Transferring ownership of a Limited Liability Company (LLC) in Mississippi is a relatively simple and straightforward process involving minimal paperwork. It can be partially or fully transferred to another owner.

LLCBuddy editors shared a step-by-step guide on how to transfer ownership of an LLC in Mississippi. The steps might seem easy and doable. However, these are general steps and might need special attention for specific cities or regions in Mississippi. Hence, it is recommended to consult an attorney or legal expert before taking the steps.

How an LLC Ownership Structure Works in Mississippi

By now, you must know that a limited liability company is one of the simplest forms of business structure. The ownership and transferring it to others is even simpler. For an LLC in Mississippi or any other state in the United States, the company is considered an independent entity that is separated from its owners, which means the owners are not personally liable for the company’s debts or legal obligations.

The ownership structure of an LLC in Mississippi is determined by the percentage of ownership interests held by each member. These ownership interests can be distributed however the members see fit and are typically outlined in the Operating Agreement drafted in Mississippi.

There is no maximum limit on the number of members an LLC in Mississippi can have, and the members can be individuals, other LLCs, corporations, or even foreign entities. This flexibility allows for a wide range of business structures, from single-member LLCs in Mississippi to large, multi-member LLCs with complex ownership arrangements.

What is Mississippi LLC Buy-Sell Agreement in Ownership Transfer?

In Mississippi, the buy-sell agreement is a part of your operating agreement. It explains the instructions for buying and selling the LLC ownership. For example, who can be the member of Mississippi LLC, how will buy out and sell of the LLC be determined, whether the members of the LLC in Mississippi will buy the shares of the leaving owner, and how – these are the points you have in the buy-sell agreement.

Buy Out Mississippi LLC or Partial Transfer: In this case, the members of the LLC generally buy the shares of the owner who is leaving. As the LLC buys the owner’s interests, the shares get divided equally among the remaining Mississippi LLC members. LLC members must approve the transfer, and then the Operating Agreement (OA) will be updated to exclude the departed owner.

If your LLC operating agreement does not specify these terms beforehand, you must follow Mississippi state LLC law. In some states, ownership transfer does not simply take place. Instead, they have to dissolve the LLC to continue with the process. So, while you’re forming an Mississippi LLC, make sure to create a buy-sell agreement beforehand.

Sell a Mississippi LLC Or Fully Transfer: Selling an LLC or Fully Transferring the ownership is a bit more complicated than the buy-out process. In this condition, owners have the independent legal right to sell the interest to any third party. They do not need other members’ approval for this. The negotiation between the buyer and the seller involves complexities if there is no operating agreement in the first place. As an owner, you must find a buyer, write the change of ownership letter, set out other formalities, and voila! Your ownership transfer is done. The parties will settle the sale contract, including the LLC price, following Mississippi state laws.

How to Transfer Mississippi LLC Ownership

When an LLC member decides to step down from the owner’s position, they must transfer the ownership to someone else. It can be other existing members of the LLC or a third party. Transferring LLC ownership in Mississippi is a common yet complex deed. LLC owners who want to transfer their ownership must follow some steps to do the task. Here are the following steps-

Step 1: Review Your Mississippi LLC Operating Agreement

An operating agreement is a kind of non-mandatory document in many states. In Mississippi, it is not mandatory to draft one. If you have one at the time of LLC formation in Mississippi, then it would be easier for the owners to transfer the name. If not, then it should be filed at the time of transferring ownership. The operating agreement for the LLC in Mississippi must be reviewed for the ownership transfer conditions and other legal requirements regarding the buy-out and sale of the LLC.

Step 2: Amend the Mississippi Certificate of Formation

Changing/transferring ownership might lead to structural change at the managerial level. In that case, the LLCs must comply with the Mississippi Secretary of State. To do so, one must file the Mississippi Certificate of Formation amendment. Specifically in Texas, LLCs must submit a Public Information Report annually to the Texas Comptroller of Public Accounts. The managerial changes will be explained there.

As soon as the ownership transfer negotiation is done and the agreement is made with the updated change of ownership, file it with the Secretary of State. For that, you must amend the Certificate of Formation and get the Certificate of Amendment. Make the changes to the existing Certificate of Formation, get the amendment form, and submit it to the Mississippi SOS along with other documents and the filing fee. Read how to amend Mississippi Certificate of Formation in a simple way.

Step 3: Spread the News

Once the legal formalities are done, and the ownership of your LLC is transferred officially in Mississippi, you must spread the word to the clients, partners, and other concerned people. Also, banks and other financial institutions should be notified about the ownership change. Business entities, vendors, and other officials you work with should also be notified.

Step 4: Obtain a New EIN (optional)

You might need to apply for a new EIN based on the LLC ownership transfer. After officially transferring ownership, you must check with the IRS whether you need a new EIN. There is a formal form to notify the IRS about the LLC ownership transfer. Get the form from their website, enter the details, and submit it. You will get notified whether you need to apply for a new EIN.

Why Transfer LLC Ownership in Mississippi

There can be several reasons why the transfer of LLC ownership in Mississippi takes place in any organization. Some of the most common reasons include the following-

Death of the LLC owner
Separation or Divorce of the LLC Owners
LLC owners do not wish to continue their association with the organization
LLC owners want to appoint a new member (owner)
LLC owners want to sell the business off to someone else

These are some of the common reasons why an LLC ownership gets transferred in Mississippi. Transferring LLC ownership requires a comprehensive LLC operating agreement in Mississippi. This is an internal document every LLC should have at the time of formation.

The Role of Mississippi Operating Agreement in LLC Ownership Transfer

Creating an Operating Agreement in Mississippi is one of the major steps in forming a limited liability company (LLC). However, many states do not require an Operating Agreement. California, New York, Delaware, Maine, Nebraska, and Missouri are the states where an LLC operating agreement is mandatory.

Even when your state does not necessarily need you to file the operating agreement, it is recommended that you should have it to avoid any internal disagreements or issues in the future.
LLCBuddy Editorial Team

An operating agreement is an internal document explaining all the procedures, including ownership transfer, dissolution, LLC operation, members, and other LLC-related processes. Operations, such as dissolution and ownership transfer, occur based on those written regulations.

If there is no Mississippi Operating Agreement or it does not have clear ownership transfer or buy-sell agreement provisions, the transfer takes place based on Mississippi state law.

What to Include in Mississippi Operating Agreement

This official document outlines the company’s structure, the members’ details, the dissolution process, and a lot more. Hence, it is always wise to have one to avoid any confusion in the future, whether your state needs it or not. The LLC operating agreement should have the following points-

Whether LLC members are related to each other and what type of relationships they share
Managers’ rights and responsibilities
Operating Agreement Amendment conditions
Members’ profit and loss shares
Mississippi LLC Tax structures
Transfer of ownership rules and procedure
Dissolution of Mississippi LLC

If your operating agreement explains all the above points, you must follow it for the ownership transfer.

Reasons to Transfer Mississippi LLC Ownership

There can be many issues that lead to ownership transfer. One of the most common issues is the death of the owner. There can be other issues where transfer of ownership occurs. Here are some issues to consider,

Divorce Or End of Marriage: In some cases, according to the divorce decree, the ownership transfers to the spouse. If the LLC in Mississippi has an operating agreement and the ownership transfer condition is specified, then the LLC must follow the Mississippi operating agreement to proceed.

Death of a Member: This is the most common issue in LLCs. In Mississippi, if a member dies, the ownership, by default, transfers to the legal heirs of the deceased person. However, in this case, the legal heirs (wife/husband/kids) do not get any managerial power or authority. They continue enjoying the benefits, such as a share of the profit and others. But they won’t get any other power in the company. In such situations, other members of the Mississippi LLC often buy out the deceased’s interests.

Dissolution of Mississippi LLC: If any member/owner plans to leave the company, the LLC gets dissolved and reformed with the new policy and operating agreement. The members and managers make this sort of decision at the time of the creation of the operating agreement.

FAQs

Can I transfer ownership of my Mississippi LLC to another person?

Yes, ownership of a Mississippi LLC can be transferred to another person.

Do I need to update any documents with the State of Mississippi when transferring ownership of my LLC?

Yes, you will need to update the ownership information with the State of Mississippi by filing an amendment to your LLC’s Articles of Organization.

Is there a fee for transferring ownership of a Mississippi LLC?

Typically, there is a fee associated with filing an amendment to transfer ownership of a Mississippi LLC.

How do I transfer ownership of my Mississippi LLC?

Ownership of a Mississippi LLC can be transferred by obtaining the consent of all current members and drafting a written agreement outlining the transfer of ownership.

Can ownership of a Mississippi LLC be transferred to a non-member?

Yes, ownership of a Mississippi LLC can be transferred to a non-member through the proper legal procedures.

Are there any restrictions on transferring ownership of a Mississippi LLC?

The operating agreement of the Mississippi LLC may contain restrictions on transferring ownership, so it’s important to review this document before proceeding with a transfer.

How long does it take to transfer ownership of a Mississippi LLC?

The timeline for transferring ownership of a Mississippi LLC can vary depending on the complexity of the transaction and the processing time of the state.

Do I need to notify the state of Mississippi when transferring ownership of my LLC?

Yes, the State of Mississippi should be notified of any changes in ownership by filing the necessary paperwork.

What is the role of the Secretary of State in transferring ownership of a Mississippi LLC?

The Secretary of State oversees the filing of documents related to the transfer of ownership of a Mississippi LLC.

Are there any tax implications to consider when transferring ownership of a Mississippi LLC?

There may be tax implications to transferring ownership of a Mississippi LLC, so it’s recommended to consult with a tax professional before proceeding.

Can ownership of a Mississippi LLC be transferred to a trust?

Yes, ownership of a Mississippi LLC can be transferred to a trust, as long as all legal requirements are met.

Is it possible to transfer partial ownership of a Mississippi LLC?

Yes, partial ownership of a Mississippi LLC can be transferred, as long as all parties agree to the terms of the transfer.

What documents are required to transfer ownership of a Mississippi LLC?

Typically, a written agreement outlining the transfer of ownership and an amendment to the LLC’s Articles of Organization are required to transfer ownership of a Mississippi LLC.

Can ownership of a Mississippi LLC be transferred without the consent of all members?

No, typically the consent of all current members is required to transfer ownership of a Mississippi LLC.

Are there any residency requirements for LLC members in Mississippi?

Mississippi does not require LLC members to be residents of the state.

Can ownership of a Mississippi LLC be transferred to a foreign entity?

Yes, ownership of a Mississippi LLC can be transferred to a foreign entity as long as all legal requirements are met.

How does transferring ownership of a Mississippi LLC affect the company’s EIN?

Transferring ownership of a Mississippi LLC does not typically affect the company’s Employer Identification Number (EIN).

Are there specific rules for transferring ownership of a Mississippi LLC in the operating agreement?

The operating agreement of a Mississippi LLC may contain specific rules or procedures for transferring ownership, so it’s important to review this document before proceeding.

Does the new owner of a Mississippi LLC have to be approved by the existing members?

The approval of the new owner by existing members of a Mississippi LLC would typically be outlined in the operating agreement.

Can ownership of a Mississippi LLC be transferred to a minor?

Ownership of a Mississippi LLC cannot be transferred to a minor, as they are not legally able to enter into contracts.

Is there a deadline for transferring ownership of a Mississippi LLC?

There is no specific deadline for transferring ownership of a Mississippi LLC, but it should be done in a timely manner to avoid any complications.

How does transferring ownership of a Mississippi LLC impact the company’s assets and liabilities?

The transfer of ownership of a Mississippi LLC may impact the company’s assets and liabilities, depending on the terms of the transfer agreement.

Can ownership of a Mississippi LLC be transferred if the LLC is in financial distress?

Transferring ownership of a Mississippi LLC in financial distress may be complicated, and it’s recommended to seek legal advice before proceeding.

Can a change in ownership trigger a dissolution of a Mississippi LLC?

A change in ownership of a Mississippi LLC may trigger a dissolution if the operating agreement contains provisions for dissolution in certain circumstances.

Can ownership of a Mississippi LLC be transferred without the consent of the manager or managing member?

The requirements for transferring ownership of a Mississippi LLC are typically outlined in the operating agreement, so it’s important to review this document to determine if the manager’s consent is required.

Can ownership of a Mississippi LLC be transferred to an individual who has been convicted of a felony?

Ownership of a Mississippi LLC can be transferred to an individual who has been convicted of a felony unless there are specific restrictions outlined in the operating agreement or state law.

How can I find a new owner for my Mississippi LLC?

Finding a new owner for a Mississippi LLC may involve reaching out to potential buyers, working with a business broker, or advertising the sale of the LLC.

What steps should I take if I want to transfer ownership of my Mississippi LLC to my business partner?

To transfer ownership of your Mississippi LLC to your business partner, you should first obtain the consent of all members and draft a written agreement outlining the transfer of ownership.

Can I transfer ownership of my Mississippi LLC to a family member?

Yes, ownership of a Mississippi LLC can be transferred to a family member as long as all legal requirements are met.

What happens to the existing contracts and agreements of a Mississippi LLC when ownership is transferred?

Existing contracts and agreements of a Mississippi LLC typically remain in effect after ownership is transferred, but it’s important to review the terms of these agreements to confirm any transfer requirements.

In Conclusion

As you all know, forming a limited liability company is much easier than forming a corporation, a partnership, or any other type of business. The ease of transferring ownership from one to another is one of the many reasons for entrepreneurs to start an LLC. In Mississippi, transferring LLC ownership does not need a lot of paperwork or steps. You must update the formation papers with the new ownership information, file the amendment to the formation document, tell people about it, and comply with the state.

Though it seems easy to file documents while transferring ownership, it could be more complex than just these steps. Based on the local regulations, nature of business, or some other administrative rules, transferring ownership in Mississippi might take more than what it looks like. It is recommended to consult a professional or attorney before you take such an important business decision.