How to Start an LLC in Missouri
Everything from small accounting firms to large agricultural operations can be an LLC in Missouri, so long as the proper steps are followed to file with the Secretary of State. If you’re forming an LLC in Missouri, the following step-by-step guide will cover everything you need to do before and after formation.
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Every day throughout Missouri, dozens of new businesses are formed by men and women looking to contribute to the economy and better their life. Of the over half a million small businesses in the Show Me State, about one quarter represent the limited liability company structure.
Name your LLC
Have a name in mind? Run a name search via the state’s business directory. If the name comes up in a search, it’s taken. If it doesn’t, it’s yours to claim.
Because of the unique properties of an LLC business structure, Missouri state law requires the LLC name to contain a reference to this structure. The name can contain “Limited Liability Company,” “Limited Company,” or an abbreviation of these options. While this requirement is unique to an LLC structure, it is not the only requirement for naming a company in Missouri.
Like all other states, Missouri keeps a record of all business entity names and prohibits duplication among them. Not only can your business name not be identical to another Missouri business, but it also cannot be nearly identical either – the law requires it to be distinguishable from all other business names.
To determine name availability, you can search the business name database provided by the Secretary of State. Certain words may be prohibited, like those that imply your business is a government agency.
Before committing to a name, it is also wise to check whether the domain name is taken, or if social media handles are available. You will want your web presence to match your business name, and existing accounts under your name could be confusing for clients.
Reserving a business name
If you choose a name and find it is available, you want to be sure no one takes it before you have the chance to register your LLC. One way you can do this is to reserve the name with an Application of Name Reservation. For a $25 fee, you can reserve a business name for 60 days (with two renewals allowed) and prevent others from using it.
Fictitious business names
Whatever you choose to register your LLC as you do not have to use this name for business on a daily basis. You can choose to use a fictitious business name, sometimes called a DBA or trade name, as your business name. To do this in Missouri, you have to register the fictitious name through the Secretary of State. There is a $7 fee and this registration lasts for five years before it must be renewed.
You can reserve a business name in Missouri for 120 days.
Select a registered agent
Because an LLC is a separate legal entity from its owners, it is possible that the business itself needs to receive government correspondence. This includes tax and legal documents as well as services of process, which inform the business of any lawsuits it has been named in. In order to be sure the business receives and responds to these items, a registered agent must be named.
Registered agents can be an individual, so long as they are over 18 and are Missouri residents with a street address in the state.
LLC members and employees can be registered agents for their company, or another person can be assigned. However, it is important to know that a registered agent is required to be available during all normal business hours, which can be a big commitment for a single person.
To avoid this problem, many people will also choose to use a registered agent service. Any Missouri or foreign corporation with a street address (not a P.O. box) in the state can perform this service on behalf of an LLC. For a small fee, this is often preferable to the risk of missing correspondence.
File Articles of Organization
The act that forms an LLC in Missouri is the filing of Articles of Organization with the state. In this form, you will lay out the basic information about your company so that Missouri can keep the information on record and be sure it complies with the above rules. Now that you know the appropriate information, you can complete your Articles of Organization and file them online or by mail.
Be prepared to include the following information when filing Articles of Organization:
- Your LLC’s name
- The specific purpose of your LLC
- Name and address of the registered agent
- Whether you will have a member or manager-managed LLC
- Duration of the LLC, whether perpetual or specified
- Effective date of the LLC
- Name and address of each organizer
- Signature of the organizer
Once the Secretary of State’s office has reviewed and approved this information, your business is officially considered an LLC. Missouri then issues a certificate that confirms the existence of the LLC.
You can fill out and submit your LLC formation documents here.
To file an Articles of Organization online, there is a $50 filing fee along with a $1.25 convenience fee. If you prefer to file by postal mail, there is a $105 filing fee.
Missouri processing time
For paperwork filed online, Articles of Organization can be approved immediately upon payment being received. Approval can take 3 to 6 days after the paperwork is received by postal mail.
Create an LLC operating agreement
In addition to the Articles of Organization, Missouri requires each LLC to have an operating agreement in place to govern the operating procedures of the company. In addition to being compliant with the law, having an operating agreement is an important way to prevent conflict within the business, especially for multi-member LLCs. By setting clear expectations and responsibilities, the operating agreement can also be referred to when making big decisions. Even in a single-member LLC, an operating agreement can help ensure limited liability status is upheld.
An operating agreement should include:
- Breakdown of members’ financial interest
- How managers and members are selected or appointed
- Power and compensation of all officers
- Non-compete clauses
- Provisions for a member exiting or entering the business
- Fiduciary duties
- Taxation structure
- Dissolution procedures
- Profit allocation between members
- Voting structure for business decisions
There are many free templates available online to help with drafting an operating agreement. Some companies will have complex agreements and need a lawyer to help with the document, but most LLCs can draft them on their own. All members will need to sign the agreement.
You do not need to submit the operating agreement to Missouri as a part of the formation, as it is considered an internal document. However, it is required, so this should always be available in case you are asked to produce it.
After you have received your certificate, formed your business, and finished your operating agreement, you officially have a Missouri LLC. Depending on the type of business you own, there will be other tasks to complete in order to stay in compliance with all laws and run your business effectively.
Get your EIN
While business registration is done at the state level, every business in the country will be subject to rules and regulations from the Internal Revenue Service. The vast majority of companies will be required to obtain an EIN, or Employer Registration Number, in order to properly pay federal taxes. The EIN operates like a Social Security Number, but for your LLC rather than an individual person.
There are a small number of businesses that may not be required to have this number. A sole proprietorship or a business with no employees that do pay excise taxes, for example, is exempt.
However, even if the law does not necessitate this step, it is important to do. Financial institutions usually require an EIN before you can open a bank account, for example. An EIN can also replace your personal Social Security Number on paperwork and is much safer to provide.
Obtaining an EIN is free through the Internal Revenue Service website. It is issued immediately when you apply online.
You can get your EIN by visiting the IRS website.
Get Missouri business licenses
Every business in Missouri will likely need to obtain at least one or two licenses in order to operate legally. The most common is the sales tax license, which nearly every business must obtain. Often called a seller’s permit, this license allows businesses to collect sales tax on taxable goods and services. Missouri’s Department of Revenue issues these licenses at the state level.
Other licensure is typically done at the local level through cities and counties. Any area where your business is registered or operates may have specific requirements- the Missouri state website has a list of all cities and counties to better find contact information relevant to your business.
Certain fields of work will also require professional licensing and additional permits. For example, any health professional, financial worker, and even pro-wrestlers are required to have professional registration in place before operating in Missouri.
Open business bank accounts
It is important that your LLC have its own bank accounts, even if that is just a single checking account used to manage all income and expenses. While this is not a law, it can help you maintain your liability protection, as the account demonstrates that you have separated your personal and business finances properly. If this is not done, you could end up liable for financial obligations despite the LLC structure.
In addition to the protection offered by a separate bank account, it is often much simpler for you. Keeping business accounts separate makes accounting activities simpler and can save you time during tax season. You can also open credit cards in the name of your business, which gives your business its own credit score and opens up additional possibilities in the future.
Review LLC tax rules in Missouri
Missouri has a flat 6.25% corporate tax rate. However, most LLCs will not be subject to this. While you can elect for an LLC to be taxed as a corporation, for tax purposes, most entrepreneurs prefer it to be taxed at the individual level, with all profits and losses reflected on the members’ personal tax returns.
Missouri does not charge LLC owners a franchise tax or any other special LLC tax.
All LLCs will need to register their business with the Missouri Department of Revenue. This can help with sales tax, vendor use tax, consumer use tax, withholding tax, unemployment tax, and corporate income tax. This registration can be done online once the business has an EIN assigned by the IRS.
Get insurance for your LLC
While the limited liability of your company protects your personal assets, the business itself can still be subject to a lawsuit and otherwise have its assets risked. Most companies should have some kind of insurance in place as a way of protecting the business. General liability insurance is usually sufficient for coverage for lawsuits, property damage, and
In some cases, a business may need professional liability insurance, which covers licensed professionals when they are accused of malpractice or business errors.
In Missouri, businesses with five or more employees (outside of LLC members and officers) are required to have workers’ compensation insurance in place. This coverage provides assistance to any employee who is injured, killed, or made ill by their work.
Additional resources to help you set up a business in Missouri
As a part of encouraging small business ownership in the state, Missouri offers many resources to make the process simple and transparent.
How much does a seller’s permit cost in Missouri?
In Missouri, the license that allows a business to collect sales tax is known as a Sales Tax License. There is no filing fee, but instead, you must pay a deposit/bond that is equal to three times the average amount of sales and use tax that will be owed. This can be refunded after 2 years of on-time payment.
Do I have to file my operating agreement with Missouri?
Missouri is one of a few states that require LLCs to have an operating agreement, per Revised Statutes Section 347.081 of the state’s legal code. However, this is still an internal document that does not have to be filed as a part of an LLC formation. The document should be on hand in case proof is ever requested.
How long can I reserve a business name in Missouri?
If you are not ready to file for an LLC but want to use a name, you can reserve the name for a 60-day period. Missouri allows you to renew this reservation two times, for a total of 180 days. After this period, the reserving entity can never again reserve that specific name, though you can file with it.
Do Missouri LLCs pay state taxes?
An LLC allows a business to pass-through profits and losses, which are paid through the members’ personal taxes. This means no state corporate tax must be paid. However, businesses may still have to pay sales tax, as well as Unemployment Insurance Tax and Employee Withholding Tax if the business has employees.
Can I register my existing LLC in Missouri?
If you have an LLC in another state and want to operate in Missouri, you can register as a foreign LLC. There is a $105 filing fee, payable to the Secretary of State. This can be done online or by mail.
Does Missouri have a Certificate of Good Standing?
If you would like to verify that your Missouri LLC was formed legally and has been properly maintained, you can obtain a Certificate of Good Standing. These can be ordered online for a $10 fee. While you do not need to have this, it can be helpful when doing things like seeking funding.
Do Missouri LLCs need to file an annual report?
No. Missouri does not require LLCs to file an annual report or a Statement of Information.
Can you dissolve an LLC in Missouri?
If you no longer wish to conduct business with an LLC, you should officially dissolve it with the state. Simply stopping operations without proper filings can lead to tax liabilities or penalties. Missouri requires you to close your business tax accounts and file an Articles of Dissolution to complete this process.
Does my Missouri LLC need to have a DBA?
Most LLCs are able to operate under the same name they are registered with. However, if you would like to transact business under another name, you can file for a doing business as, or DBA. In Missouri, this is called a fictitious name and can be filed through the Secretary of State. There is a $7 fee to do so.
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