How to Start a Limited Liability Partnership in Mississippi | 2024 Guide

Start a Limited Liability Partnership in Mississippi

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Mississippi. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Mississippi, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Mississippi LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Mississippi, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Mississippi General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Mississippi

To form a limited liability partnership in Mississippi, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Certificate of Formation, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Mississippi, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Mississippi business registry. Ensure that your chosen name follows Mississippi naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Mississippi Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Mississippi- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Mississippi Secretary of State business name database and Mississippi Business Name Search. If the name is available, you may choose to reserve it for a specific period of 180 days by filing a name reservation application and paying the online name reservation fee of $25 and mail name reservation fee of $25. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by one method, online, which costs around $25. In addition, the DBA’s validity in Mississippi is five years, which you can file in the Mississippi Secretary of State.

You can check out how to file a DBA in Mississippi for clearer understanding.

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Step 3: Designate a Registered Agent

In Mississippi, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Mississippi Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Mississippi requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Mississippi Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Mississippi Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Mississippi laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Mississippi. The default laws in Mississippi might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Mississippi Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four 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.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Mississippi Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Mississippi.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Mississippi LLP. Additionally, obtain the necessary Mississippi Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Mississippi to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Mississippi Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Mississippi, and local levels.

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Advantages of Forming a Limited Liability Partnership in Mississippi

While the specific advantages of forming an LLP in Mississippi can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Mississippi:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Mississippi.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Mississippi may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Mississippi.

Cost of Forming an LLP in Mississippi

The cost of forming an LLP in Mississippi may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Mississippi Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Mississippi instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a Limited Liability Partnership (LLP) in Mississippi?
A Limited Liability Partnership is a type of partnership in which all partners have limited personal liability for the actions of the other partners.
Can anyone form an LLP in Mississippi?
No, in Mississippi, an LLP can only be formed by professionals such as lawyers, accountants, and architects.
Do I need to register my LLP in Mississippi?
Yes, you will need to register your LLP with the Mississippi Secretary of State in order to legally operate in the state.
What is the registration fee for an LLP in Mississippi?
The registration fee for an LLP in Mississippi is $50.
Can an LLP have only one owner in Mississippi?
No, an LLP in Mississippi must have at least two partners.
What is the liability of partners in an LLP in Mississippi?
In Mississippi, partners in an LLP are not personally liable for the debts or liabilities of the partnership, except for their own individual acts of negligence or malpractice.
Can an LLP be taxed as a partnership or a corporation in Mississippi?
Yes, LLPs in Mississippi can elect to be taxed as either a partnership or a corporation.
Can a foreign LLP register to do business in Mississippi?
Yes, a foreign LLP can register to do business in Mississippi, but it must first obtain a certificate of authority from the Mississippi Secretary of State.
Can an LLP in Mississippi be converted to a different entity type, such as an LLC or corporation?
Yes, an LLP in Mississippi can be converted to a different entity type by filing the appropriate paperwork with the Mississippi Secretary of State.
What is a registered agent and does my LLP need one in Mississippi?
A registered agent is a person or entity designated to receive legal documents on behalf of the LLP. Yes, your LLP will need a registered agent in Mississippi.
Do I need to submit an annual report for my LLP in Mississippi?
Yes, LLPs in Mississippi are required to file an annual report with the Secretary of State.
What type of information is required to file an annual report for an LLP in Mississippi?
The information required to file an annual report for an LLP in Mississippi includes the name and address of the registered agent, the principal office of the LLP, and the names and addresses of the partners.
Can an LLP in Mississippi be dissolved voluntarily?
Yes, an LLP in Mississippi can be dissolved voluntarily by the partners with a written agreement to dissolve.
Can an LLP in Mississippi be dissolved involuntarily?
Yes, an LLP in Mississippi can be dissolved involuntarily by court order or if all the partners agree to dissolve.
What is a partnership agreement and does my LLP need one in Mississippi?
A partnership agreement is a written agreement between partners outlining the rights and responsibilities of each partner. Yes, it is recommended that your LLP have a partnership agreement.
Can a partner be expelled from the LLP in Mississippi?
Yes, a partner can be expelled from an LLP in Mississippi if the partnership agreement allows for expulsion.
Can a partner withdraw from the LLP in Mississippi?
Yes, a partner can withdraw from an LLP in Mississippi, but the partnership agreement should outline the procedure for doing so.
Can partners be added to an LLP in Mississippi after it has been formed?
Yes, partners can be added to an LLP in Mississippi after it has been formed, but the partnership agreement should outline the procedure for doing so.
What is the process for dissolving an LLP in Mississippi?
The process for dissolving an LLP in Mississippi involves filing a certificate of dissolution with the Secretary of State, paying any outstanding debts or obligations, and obtaining a tax clearance certificate.
Can creditors hold individual partners liable for the debts of the LLP in Mississippi?
No, creditors cannot hold individual partners liable for the debts of the LLP in Mississippi.
Are there specific advertising or promotional guidelines for LLPs in Mississippi?
There are no specific advertising or promotional guidelines for LLPs in Mississippi, but the LLP should comply with any rules or regulations of its profession.
Can an LLP in Mississippi engage in business activities outside of its profession?
It depends on the profession of the LLP, but generally, LLPs in Mississippi should limit their business activities to their professional services.
Can an LLP in Mississippi have non-partner employees?
Yes, an LLP in Mississippi can have non-partner employees.
What type of insurance should an LLP in Mississippi consider?
LLPs in Mississippi should consider obtaining professional liability insurance to protect against claims of malpractice or negligence.
Can two or more LLPs merge in Mississippi?
Yes, two or more LLPs can merge in Mississippi, but the procedure for doing so is complex and may require legal assistance.
Are there any ongoing reporting requirements for LLPs in Mississippi?
Yes, LLPs in Mississippi must file an annual report with the Secretary of State and keep accurate records of the partnership’s financial transactions.
Can an LLP in Mississippi participate in government contracts?
Yes, an LLP in Mississippi can participate in government contracts if it meets all the requirements for doing so.
How long does it take to form an LLP in Mississippi?
The process for forming an LLP in Mississippi can take several weeks to complete, depending on how quickly the required paperwork is submitted and processed.
What is a limited liability partnership?
A limited liability partnership is a type of business structure that provides liability protection for its owners.
How do I start a limited liability partnership in Mississippi?
You must file a Certificate of Limited Partnership with the Mississippi Secretary of State.
What is the filing fee for a limited liability partnership in Mississippi?
The filing fee for a certificate of limited partnership in Mississippi is $50.
Does my limited liability partnership need to have a registered agent in Mississippi?
Yes, your LLP must have a registered agent in Mississippi.
How do I choose a registered agent for my Mississippi LLP?
Your registered agent must be a legal resident of Mississippi or a business that is authorized to do business in Mississippi.
Can I act as my own registered agent for my Mississippi LLP?
Yes, you can act as your own registered agent for your Mississippi LLP.
How many partners do I need to form a limited liability partnership in Mississippi?
You need at least two partners to form an LLP in Mississippi.
What is the difference between a general partner and a limited partner in a Mississippi LLP?
A general partner has management responsibilities and full liability for debts, while a limited partner has little to no management responsibility but still bears liability for the partnership.
Can my Mississippi LLC be a partner in my limited liability partnership?
Yes, your Mississippi LLC can be a partner in a Mississippi LLP.
What is the duration of a limited liability partnership in Mississippi?
The partnership can continue indefinitely, but it can also have a specified end date.
Can my limited liability partnership in Mississippi restrict partner access to the financial information of the partnership?
Yes, administration can be restricted under Mississippi law.
Can I change the information on my certificate of limited partnership in Mississippi after filing it with the secretary of state?
Yes, information contained on the certificate can be changed by filing an amendment.
What happens if a partner dies in a limited liability partnership in Mississippi?
Usually, the partnership will continue with the surviving partners.
Can my Mississippi LLP have one individual general partner and many limited partners?
Yes, it is possible to have many limited partners and one general partner.
Does my Mississippi LLP need to have an operating agreement?
While not legally required, it’s usually recommended that a partnership draft an operating agreement.
How can I dissolve a partnership agreement in Mississippi?
For dissolution in Mississippi, you’ll need to file appropriate paperwork with the Mississippi Secretary of State’s Office.
What are the tax implications of a limited liability partnership operating in Mississippi?
An LLP must register with the Mississippi Department of Revenue and must pay state and local taxes.
Can a limited liability partnership in Mississippi be used for estate planning purposes?
Yes, an LLP can be used for estate planning in Mississippi.
Is there a minimum capitalization requirement for a limited liability partnership in Mississippi?
No, there is no minimum capitalization requirement for a Mississippi LLP.
Can a bankruptcy of an LLP in Mississippi affect their general partnership’s personal assets?
Limited partners generally do not bear liability for partnership debts, but general partners bear full responsibility.
Is it mandatory that a Mississippi LLP include the name of its general partner in its name?
No, it isn’t required.
Is there a limit on the number of partners for limited liability partnerships in Mississippi?
Mississippi has no limit on the number of partners an LLP can have.
Will I need to pay any additional taxes for my Mississippi LLP at the federal level?
An LLP must file IRS Form 1065, but does not pay income tax.
Can LLP have employees?
Yes, an LLP can have employees in Mississippi.
What is the time it would take for the Mississippi Department of Revenue and/or Secretary of State to approve my LLC application?
The Mississippi Secretary of State generally files paperwork within a week.
What other documents are required besides a certificate of limited partnership to start an LLP in Mississippi?
No form of partnership agreement required. Certification of Merger, etc. Business Name Reservation (optional).
Can a non-US resident start a Mississippi limited liability partnership?
Yes, a nonresident can file to start an LLP in Mississippi.
What is the difference between a partnership and a limited liability partnership in Mississippi?
The main difference is the extent of liability protection provided to partners; general partners are not provided the same protections as those secured by an LLC.”
Are there annual reporting requirements for limited liability partnerships in Mississippi?
Mississippi State does not set state-level requirements for annual reports. However, the Mississippi Secretary of State requires that partnerships file an annual report no later than April 15th each year for $25 plus an additional $50 fee for documents to be mailed.

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Conclusion

Starting an LLP in Mississippi may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Mississippi.

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