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Missouri, the “Show Me” state, is a business-friendly state that offers incentive programs for new and existing businesses. It is ranked in the top 15 tax-friendly states, and is home to over half a million small businesses that make up the vast majority of private enterprises in the state.
It is no wonder then that many business owners opt to form an LLC (“Limited Liability Company”) in Missouri, in lieu of older business forms like corporation and sole proprietorship.
Forming an LLC in Missouri may offer many benefits, like liability protection and tax advantages. Read on to see if this is the right business structure for you!
An LLC is a type of business entity that is similar to a corporation, but is more flexible and easy to form and maintain. It may offer some of the benefits associated with a corporation, mainly the separation of personal and business assets and personal liability protection.
Starting your LLC in Missouri has the potential to give you access to tax credits, incentive programs, and loans that help you save money for the purpose of reinvestment and growth as your business grows. Your LLC does have to meet the required criteria to qualify for the incentives, but in the event your business doesn’t qualify, you can still take advantage of Missouri’s easy LLC formation process.
Forming an LLC in Missouri is the next step toward turning your sole proprietorship into a more formal corporate structure, forming a partnership, protecting your assets, and gaining access to capital.
The following are the steps you’ll be taking to create your Missouri LLC.
You’ll find a detailed outline to walk you through each step below.
Per the Secretary of State of Missouri, the name of your LLC has to be distinguishable from any other business entity that’s currently registered in the state. You can search the Missouri Secretary of State business entity database for your business name. If the name you want to use has been reserved or taken by another entity, you have to change the proposed name of your business to make it unique and distinguishable.
You’re also required to use one of the following words (or its abbreviation) and place it at the end of the corporation name:
There are some restrictions on registering your business name. You can’t register a name with:
Once you’ve decided your business name and searched the corporate name database to make sure your name is unique, you reserve your business name to make sure it remains available to you when you submit your articles of organization. This is an optional step, but it’s worth making the effort and paying the $30 fee as it prevents someone else from taking the name while the Office of Secretary of State processes your LLC application.
After the name reservation has been accepted, you have 60 days of exclusivity to the name. No one else can use the name while the reservation is active. The reservation can be renewed or extended for two more sixty-day periods, which gives you a total of 180 days for the name reservation. However, if you fail to formalize the reservation after the third 60-day period expires, you will be barred from reserving that particular name permanently.
Missouri terms a DBA, or Doing Business As, as a fictitious name, and getting one is optional for your LLC. A fictitious name is used when you don’t want to use the legal or true name of your LLC as part of the course of doing business. Suppose you decide that you want to “mask” your business under a DBA for branding purposes. In that case, you have to register the name with the Office of Secretary of State by filing a registration form and mail or deliver the form in-person with a filing fee of $7.00 to the SoS office in Jefferson City or any Corporate Division branch office.
In order to register a DBA, you’ll need the following information:
It’s worth noting that there is no name protection or exclusive use of a fictitious name, and you can use the name for five years before it has to be renewed. You’re required to renew the name within six months of the date of expiration, and the date of expiration is the date the registration was accepted.
Still not sure if you need a fictitious name for your Missouri LLC? Read more about the advantages and disadvantages of a DBA here.
You can register your name as a trademark in the state of Missouri through the Corporation Section of Business Services. Making a proper registration of your mark prevents other people from taking your mark and using it for their own purposes without your consent. The registration lasts for 10 years, and you can renew the trademark when the 10-year period expires.
The trademark has to be in use before you apply for registration. You’re also required to supply two working examples of the mark when you apply.
Your trademark registration is only applicable to the state of Missouri. Someone in another state can take your trademark and use it for their own purposes, and you have no legal recourse to get them to stop using it. You’ll need to register your mark with the United States Patent and Trademark Office (USPTO) to make the mark exclusive to your LLC across all 50 states.
Note that this step is also optional!
The state of Missouri requires you to name a registered agent that can receive documents delivered during business hours. A registered agent handles paperwork that comes from the government and tax offices and legal correspondence from lawyers or the courts. The registered agent has to be available during business hours from Monday through Friday so that any important papers from a court can be delivered to your business in a timely manner. You have a few options for nominating a registered agent in Missouri.
You can opt to act as your own registered agent for your LLC. To qualify to serve as a registered agent, you have to be an individual who lives full-time in the state of Missouri and has a business address that’s identical to your LLC’s registered office. Another option is to utilize a corporation authorized to transact business in the state and has a business office that’s identical to its registered office. At Tailor Brands, we offer a registered agent service capable of accepting paperwork on behalf of your business, freeing you from the need to be available at all times during business hours, and listing your personal information in the public record. Contact us to learn more about how our registered agent service works.
After you chose your registered agent, you’re ready to officially register your LLC in the Missouri Secretary of State office, once the filing is approved, your new LLC is created. Yes! This is an exciting step.
Here is an overview of filing your articles of organization to form your LLC in Missouri.
The effective date of the articles of organization is the date that the document is filed by the Secretary of State Missouri unless you want it to become active on a future date.
You can file your articles of organization by mail or online.
In order to file your articles of organization online, you are required to create an account with the Missouri Secretary of State’s Online Business Filing System. Once you have created your account and can log into the system, you can file your articles of organization and pay the filing fee.
To file by mail, you need to enclose the papers in an envelope with the filing fee and mail them to:
P.O. Box 778
Jefferson City, MO 65102
The state of Missouri charges a filing fee of $50 for filing online and $105.00 for filing articles of organization by mail. The lower cost of filing online is to encourage you to take this route when filing for your LLC instead of going through the mail and generating more work for everyone involved.
An operating agreement is a document that outlines the rules for the operation of the business and assigns duties to the members of the LLC. It also outlines who has the rights, duties, and powers of the members, managers, and employees of the organization. The operating agreement is also used to make the statement of the type of management for the company. An LLC can be member-managed or manager-managed in Missouri. In summary, the operating agreement assigns responsibility to all who are involved in its operation after the articles of organization are accepted by the Missouri Secretary of State’s office.
Some of the topics that need to go into an operating agreement include the following:
Each of these topics addresses ownership, members, how the organization is managed, who has a certain amount of voting power, who has put money into the operation, who gets paid from the profits, changes to membership, and how to handle dissolving the business.
Yes, an operating agreement is required by the state of Missouri even though you don’t file it with your articles of organization. Creating an operating agreement outlines responsibilities and the operation of the business and provides a defense or offense if a member decides to sue the LLC for whatever reason. The operating agreement also provides stronger protection against an attempt to pierce the corporate veil in a lawsuit.
The major risk of not having an operating agreement comes in the form of a lawsuit. Missouri courts are unlikely to back you up in the event of a lawsuit over the operation of the business if you don’t have one. A judge uses the operating agreement as a guideline to determine if one or more parties are not acting in good faith and aren’t performing their duties as outlined.
Missouri requires an operating agreement to contain the following items:
You’re going to need an EIN, or Employer Identification Number, from the Internal Revenue Service (IRS) to report certain types of taxes to the IRS. The IRS requires all businesses to have an EIN for the purposes of filing taxes associated with operating a business in the U.S. It’s free and adds legitimacy to your business that you might not otherwise have.
Some of the benefits of getting an EIN include:
There’s no charge to get an EIN from the IRS, and you can download the form to apply for one from the website of the IRS.
Your EIN is used to take care of business taxes and issue tax documents to the members of the LLC. You’ll find yourself using it for purposes that include:
The EIN is something you can file for on your own, or you can take advantage of our EIN filing service to do it for you. Filing is straightforward, but you do need to make sure that you fill out the form correctly to avoid the need to correct a mistake later. If you’re unsure how to fill out the form and file it, Tailor Brands is happy to help you out.
Operating an LLC in Missouri comes with the need to pay state and federal taxes of various types. The type of business you run dictates the types of taxes you’ll file at the state and federal levels. Here’s a look at Missouri’s tax requirements that you’ll have to follow after your LLC is formed and operating.
A single-person LLC is taxed the same as a sole proprietorship, and you’ll have to fill out a Schedule C as part of your federal return. The profit from the federal 1040 flows through to the Missouri individual income tax return and is taxed at your personal income tax rate for the state.
Missouri doesn’t tax the income from an LLC formed as a partnership. Instead, the income flows directly to the members according to the amount of stock they hold. The LLC itself doesn’t pay income tax on profits as there are no profits to tax.
Members of LLCs that are partnerships receive payment according to the amount of stock they hold in the business. Each partner pays the personal tax rate on the amount they receive from the LLC.
Planning on selling items at retail? You’ll need a sales/use tax account to collect and remit sales tax to the state. You can get your account set up on the Missouri Department of Revenue’s website.
In general, there is no self-employment tax payment required by the state of Missouri. However, you’ll still need to pay quarterly taxes on your income to the IRS no matter if you’re a single-entity LLC or partnership.
As previously mentioned, if you’re hiring employees, you’ll have to remit withholding taxes to the IRS under your EIN. You’ll also need a Missouri EIN for remitting withholding taxes to the state. You can get a Missouri EIN by filling out form 2643 and submitting it to the Missouri Department of Revenue.
Missouri has sales taxes on some services such as rooms, meals and drinks that are provided at a dining establishment open to the public, amusement, entertainment, recreations, athletic events and games. If you’re planning on engaging in a business that provides services to the public, make sure that you charge the right type of tax and remit it to the state.
Congratulations! Now that you’ve formed your MS LLC, it’s time to get the operating structures in place. Below we collected a few essential tips for LLC management, to help keep you in good standing with the state of Missouri.
If you manage your LLC correctly, you improve your chances of enjoying the protections and benefits a Missouri LLC offers.
Opening a business account separates your personal funds from your business income. You don’t want your personal income intermingling with your business money, as the purpose of creating an LLC is to gain protection for your personal assets. It’s also very easy to lose track of the money in the account and make a mess that you’ll have to sort out at some point. Go ahead and open a business account so you can streamline your finances and avoid issues down the road.
Always make sure to put your accounts receivables and pay your bills from the business account. Never deposit a payment into your personal account that should go into the business account, as this can lead to accusations of fraud.
After you’ve opened the account and put in money, you should use it for paying filing fees, federal and state taxes, supplies, vendors, and any other bills that pertain to the operation of the business.
Perhaps the best part of starting an LLC in Missouri is that currently, there is no annual report required, and there’s no fee to maintain your LLC in perpetuity.
Though we recommend you stay in good standing with the state and keep annual compliance if any requirements change. In addition, you may have to pay additional fees, such as the registered agent service fee.
Starting a business comes with the need to stay in compliance with taxing bodies on the state and federal levels. It can become overwhelming as the business grows and take away valuable time that you can use for running the business. You can manage these details for a while, but once they start becoming something that requires more attention, it’s time to get professional help.
You’ll want to look into retaining an attorney and CPA to help you with your finances and legal structures that support the running of your business. One option is to retain someone who’s an attorney and CPA to keep the work under one roof and streamline your finances. Otherwise, look for an attorney who can handle business matters and a CPA capable of helping you with payroll, knows how to find ways to reduce your tax liability, and can keep your business finances on track. They’ll also help you stay in compliance with any applicable laws.
The state of Missouri has no statewide business license requirement, although they may be needed on a local level. The first place to check is with the local city hall to find out what’s required to legally operate within the city limits. The city hall is the best place to go to find out what you’ll need to operate your business legally and obtain all the necessary permits and licenses to help you open your doors.
Some industries require a special license or certification, and you can find out what’s needed from the organization’s headquarters or through the Missouri Division of Professional Registration. A lawyer can also help you find out what type of permits and licenses are needed for the industry your business is involved in.
Some types of home-based businesses need to apply for a home occupation permit, but it’s best to check with your local city hall to find out what you can and can’t do at home. You’ll also need to have liability insurance in case someone’s injured on your property, and an insurance agent can help you get the right kind of coverage.
Yes. Missouri statute requires all limited liability companies to have an operating agreement.
To dissolve a single-member LLC in Missouri, you would need to file a form called ”Articles of Termination” to the Missouri Secretary of State. Dissolving a multi member LLC is a similar process, but it requires getting the consent of termination from all members of the LLC. You can also file an “Notice of Winding Up” before completely terminating the LLC to allow you time to take care of any withstanding business obligations. Both forms filling will require a filing fee of $25.
In order to start an LLC in Missouri you would need to choose a registered agent, file articles of organization, and get an EIN, among other things. All the steps required to get a Missouri LLC are detailed in this guide.
According to the MO DOR website, Limited Liability Company (LLC) taxed as a partnership income is passed directly through to the members according to the amount of stock held. Generally no income tax is paid by the LLC. You can also elect to tax your LLC as an S-Corp, by filing the appropriate forms.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.