How to Start an S-Corp in Mississippi


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start an S-corporation in Mississippi

Mississippi, popularly known as The Magnolia State, offers a bunch of benefits for business owners, especially the state capital Jackson has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Mississippi, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Mississippi. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Mississippi, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Mississippi. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Mississippi.

What is an S-Corp in Mississippi?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Mississippi. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.

LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Mississippi

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

  • Be a domestic corporation.
  • Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
  • Have just one type of stock.
  • Have a maximum of 100 shareholders or members.
  • Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Mississippi.

How to Start an S-Corporation in Mississippi?

To create S-Corp in Mississippi, you must follow the below guidelines that include forming a business name, hiring a Registered Agent, filing your Certificate of Formation, creating an operating agreement in Mississippi, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Mississippi

After you have decided on the idea to start an S-Corp in Mississippi, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on Mississippi LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

  • Avoid profanities
  • The name should be available, and no other entity should have the same name in Mississippi.
  • Limit of restricted words that need a license in Mississippi, for example, doctors, attorneys, etc.
  • Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Mississippi Registered Agent

The next step in starting an S-corp in Mississippi is hiring a Mississippi Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents (such as subpoenas), all notices of lawsuits, and other official government correspondence in Mississippi. Forming an LLC and an S-corp will be easier if you have Registered Agent in Mississippi.

Step 3: File Your Mississippi Certificate of Formation

The Certificate of Formation is an important document to start your limited liability company (LLC). Mississippi Certificate of Formation is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Certificate of Formation” to be filed, you need to pay a filing fee to the state. In Mississippi, the filing fee is $50.

In California, along with the Certificate of Formation, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Mississippi

After you have filed your Certificate of Formation in Mississippi, the next step is to create an LLC operating agreement in Mississippi. The Mississippi LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

  • Article I: Organization
  • Article II: Management and Voting
  • Article III: Capital Contributions
  • Article IV: Distributions
  • Article V: Membership Changes
  • Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for EIN in Mississippi

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Mississippi can be through the following:

  • Apply Online- You can apply for EIN online, the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Mississippi

Once you have obtained your EIN and Certificate of Formation to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Mississippi, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Ogden, UT 84201 Fax: 855-214-7520 .

Advantages of Starting an S-Corporation in Mississippi

Filing an S-Corp in Mississippi has numerous benefits and advantages.

  • Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.
  • Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Mississippi apply for an S-Corp LLC.
  • Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp in Mississippi?
An S-Corp in Mississippi is a business entity that combines the limited liability of a corporation with the pass-through taxation of a partnership.
What are the advantages of forming an S-Corp in Mississippi?
Forming an S-Corp in Mississippi provides liability protection for business owners and allows for pass-through taxation, meaning that the business’s income is reported on the individual owners’ tax returns. It also allows for greater flexibility in how the business is managed.
How do I form an S-Corp in Mississippi?
To form an S-Corp in Mississippi, you must first choose a business name and register it with the Mississippi Secretary of State. You must then file Articles of Incorporation and an Operating Agreement with the Secretary of State. Finally, you must obtain an Employer Identification Number from the IRS and obtain any necessary licenses or permits for your business.
What paperwork do I need to form an S-Corp in Mississippi?
To form an S-Corp in Mississippi, you must file Articles of Incorporation and an Operating Agreement with the Mississippi Secretary of State. You must also obtain an Employer Identification Number from the IRS, and obtain any necessary licenses or permits for your business.
Are there any fees associated with forming an S-Corp in Mississippi?
Yes, there are filing fees associated with forming an S-Corp in Mississippi. The filing fees vary depending on the type of business entity you are forming.
How long does it take to form an S-Corp in Mississippi?
Generally, it takes approximately 3-5 weeks to form an S-Corp in Mississippi.
Do I need to hire a lawyer to form an S-Corp in Mississippi?
While it is not required to hire a lawyer to form an S-Corp in Mississippi, it is highly recommended as the process can be complex.
Are there any annual fees or requirements for an S-Corp in Mississippi?
Yes, there are annual fees and reporting requirements for an S-Corp in Mississippi. These include filing an annual report with the Secretary of State, obtaining a business license, and paying taxes on business income.
How can I find more information about forming an S-Corp in Mississippi?
You can find more information about forming an S-Corp in Mississippi by visiting the Mississippi Secretary of State website or contacting a qualified business attorney.
How do I start an S-Corp in Mississippi?
To start an S-Corp in Mississippi, you must first file Articles of Incorporation with the Mississippi Secretary of State. You’ll also need to have a registered agent in the state, provide a registered office address, and appoint directors.
What is the filing fee for an S-Corp in Mississippi?
The filing fee for an S-Corp in Mississippi is $50.
What documents are required for an S-Corp in Mississippi?
To form an S-Corp in Mississippi, you must file Articles of Incorporation with the Mississippi Secretary of State. You’ll also need to file an Assumed Name Certificate, Corporate Registration Statement, and a Non-Profit Corporation Certificate, if applicable.
What are the advantages of an S-Corp in Mississippi?
An S-Corp in Mississippi offers the same limited liability protection as other types of business entities, while allowing profits and losses to be passed through to the shareholders for tax purposes. It also offers more flexibility in the types of investments it can make.
What are the disadvantages of an S-Corp in Mississippi?
The biggest disadvantage of an S-Corp in Mississippi is that it can be more expensive to set up and maintain than other types of business entities. Additionally, it can be difficult to attract investors due to its limited liability status.
What records must I keep for an S-Corp in Mississippi?
You must keep records of all business transactions, including financial statements, minutes from board meetings, and tax returns. You must also keep records of any decisions made by the shareholders or board of directors.
What is the annual reporting requirement for an S-Corp in Mississippi?
The annual reporting requirement for an S-Corp in Mississippi is to file a franchise tax report with the Mississippi Secretary of State. The report must be filed by April 15th of each year.
Are there any special requirements for an S-Corp in Mississippi?
Yes, S-Corps in Mississippi must appoint directors and comply with other corporate formalities such as holding regular meetings and keeping records of all business transactions.
Can I form an S-Corp in Mississippi without a lawyer?
Yes, you can form an S-Corp in Mississippi without a lawyer, but it is highly recommended that you seek legal advice to ensure that you are in compliance with all state and federal regulations.
What are the benefits of forming an S-Corp in Mississippi?
Some of the key benefits of forming an S-Corp in Mississippi include limited liability protection for its owners, flexibility in the management structure, and potential tax savings.
What information is required to form an S-Corp in Mississippi?
To form an S-Corp in Mississippi, you’ll need to submit a Certificate of Incorporation to the Mississippi Secretary of State, as well as filing an Initial Report and paying the applicable filing fees.
How much does it cost to form an S-Corp in Mississippi?
The cost to form an S-Corp in Mississippi is currently $50 for the filing fee for the Certificate of Incorporation and $20 for the Initial Report filing fee.
What taxes must an S-Corp in Mississippi pay?
An S-Corp in Mississippi must pay federal taxes and Mississippi state taxes, including income, employment, and sales tax.
Is there an annual fee for an S-Corp in Mississippi?
Yes, an S-Corp in Mississippi must pay an annual report and renewal fee of $25 to the Mississippi Secretary of State.
What is the difference between an S-Corp and an LLC in Mississippi?
The main difference between an S-Corp and an LLC in Mississippi is that an S-Corp has pass-through taxation, whereas an LLC is taxed as a separate business entity.
What are the filing requirements for an S-Corp in Mississippi?
The filing requirements for an S-Corp in Mississippi include submitting a Certificate of Incorporation, an Initial Report, and paying the applicable filing fees.
What is the corporate income tax rate for an S-Corp in Mississippi?
The corporate income tax rate for an S-Corp in Mississippi is 5%.
Are there any restrictions on who can own an S-Corp in Mississippi?
No, there are no restrictions on who can own an S-Corp in Mississippi.
Does an S-Corp in Mississippi need a registered agent?
Yes, an S-Corp in Mississippi must have a registered agent located in the state in order to receive legal notices and process service of process.
Does an S-Corp in Mississippi need to hold annual meetings?
Yes, an S-Corp in Mississippi must hold annual meetings in order to remain in good standing.
Are there any other special requirements for an S-Corp in Mississippi?
Yes, all S-Corps in Mississippi must file a Form S-1 annually with the Mississippi Secretary of State.
Are there penalties for failing to comply with the requirements of an S-Corp in Mississippi?
Yes, there are penalties for failing to comply with the requirements of an S-Corp in Mississippi, including fines and potential dissolution of the company.
What are the benefits of hiring a registered agent for an S-Corp in Mississippi?
Hiring a registered agent for an S-Corp in Mississippi can provide a number of benefits, including ensuring compliance with state laws and regulations, receiving legal notices, and providing a stable and secure address for the company.

Also Read

Why Mississippi S Corporation is So Important

One of the primary advantages of structuring a business as an S Corporation is the pass-through taxation benefits. Unlike traditional C Corporations, which are subject to double taxation at both the corporate and individual level, S Corporations allow income to pass through to the shareholders without being taxed at the corporate level. This can result in significant tax savings for business owners and help to promote reinvestment and business growth.

Furthermore, S Corporations offer limited liability protection to their shareholders. This means that owners are not personally liable for the debts and obligations of the business, protecting their personal assets in the event of a lawsuit or financial trouble. This limited liability protection is essential for small business owners who may be at risk of legal disputes or financial challenges.

Another key advantage of S Corporations is the flexibility they offer in terms of ownership and management structure. Unlike traditional corporations, which have strict guidelines for shareholder rights and decision-making processes, S Corporations can have a more simplified and democratic approach to governance. This can be particularly appealing to small business owners who prefer a more personal and hands-on approach to running their company.

Additionally, S Corporations can help small businesses attract and retain employees by offering stock options and other equity incentives. This can be a valuable tool for recruiting top talent and motivating employees to work towards the long-term success of the business. By providing these incentives, S Corporations can create a culture of ownership and shared responsibility among employees, leading to increased productivity and loyalty.

In states like Mississippi, where small businesses are the backbone of the economy, S Corporations can have a significant impact on job creation and economic development. By supporting small business owners and providing them with the tools they need to succeed, S Corporations can help drive innovation, entrepreneurship, and growth in the local community.

In conclusion, the importance of S Corporations in Mississippi cannot be overlooked. They offer small business owners numerous benefits, including pass-through taxation, limited liability protection, flexibility in ownership and management, and employee incentives. By choosing to structure their businesses as S Corporations, entrepreneurs in Mississippi can position themselves for long-term success and contribute to the overall economic prosperity of the state.

Conclusion

In conclusion, starting an S-corp in Mississippi is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Mississippi.

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