The evolving state of Missouri is a perfect place with enormous business potential growth in various sectors. If you plan on starting your own venture in Missouri, the best way to begin is by creating a Missouri LLC.
What is an LLC?
Limited Liability Company is a US-based business structure designed for start-ups and small to medium-sized businesses. LLC reduces the risk factor and increases flexibility by offering personal liability protection to a business organization with the pass-through taxation of a sole proprietorship or a partnership.
By forming an LLC, the personal assets are protected from the business assets if the business is sued. LLCs can be owned by an individual or a group of people known as members.
One of the prominent advantages of a Missouri LLC is that the State does not require you to file an annual report, and thus, no annual LLC fee has to be paid.
Starting an LLC in Missouri in five simple steps
Step 1: Name your Missouri LLC
Choosing a suitable company name is the foremost step. Be sure to choose a name that is easily accessible to potential clients and fulfills the requirements mentioned in Missouri State law guidelines.
- Follow the below guidelines:
- Your name must be unique and distinguishable from any already registered domestic or foreign entity in the state of Missouri.
- Your name must contain the phrase “limited liability company,” “Limited Company,” or one of its abbreviations: “LLC,” “L.L.C.,” ”LC,” or “L.C.”
- Your name should not contain business entity identifiers such as “incorporated,” “corporation,” “Inc.,” “limited liability partnership,” “Ltd.,” or the abbreviations of these words if the business is not actually incorporated.
- Your name cannot include words that imply a government agency such as FBI, Federal, etc.
- Your name should not mislead the public by implying any purpose other than stated in its Article of Organization.
- Restricted words such as insurance, attorney, etc., cannot be used unless you are legally authorized to operate as such, or a licensed individual such as a lawyer is a part of your LLC.
2. Availability of the desired name – To make sure that your desired name is available, you can do preliminary research on the Missouri Secretary of State website or call their office in Jefferson City at (573) 751-4153.
3. Accessibility to the suitable URL – Before settling on a name, make sure your business name is available on the web domain, and it translates easily to the domain name of your company’s website. You may not want it at present, but the internet has a wide range of potential clients. We recommend you buy the URL before to avoid any discrepancy in the future.
You can reserve an available name for $25 if you do not want to register it right away. Once reserved, nobody else can avail that name for 60 days which can be extended for two additional 60-day periods making it a total of 180-days. After this, you no longer can reserve the specific name ever again.
Frequently Answer Questions
Do I need DBA or Fictitious Name Registration for my business?
Missouri law requires you to file a Fictitious Name Registration, also known as “Doing Business As” registration, with the Secretary of State if your company will be doing business different than the company’s actual purpose/name.
DBA could be filed online or via mail with a $7 fee that must be renewed after every five years, failing to which may lead to legal action.
Step 2: Choose a registered agent
First, you need to know what is a registered agent. A registered agent is a person or business entity that has been designated by the LLC to receive service of process, necessary tax forms, legal documents, and government correspondence on behalf of your business. The registered agent acts as the point of contact between your business and the State.
All LLCs in Missouri are required to have a registered agent whose absence could lead to the automatic dissolution of your LLC. Your registered agent must have a physical address in Missouri or be an entity authorized to transact business in Missouri.
An individual with a P. O. Box as the only address cannot serve as a registered agent. Missouri law allows you to change a registered agent if necessary.
Benefits of a registered agent:
- Ensures private receipt of legal documents and lawsuits, keeping you in good Standing
- All-time availability during conventional business hours
Frequently Asked Questions
Can I be my own registered agent in Missouri?
Yes, any individual, including yourself, can become a registered agent for your Missouri LLC as long as you are 18 or above, have a physical address in Missouri, and are available during conventional business hours.
Step 3: File the Missouri Articles of Organization
To officially register your Missouri LLC, you will need to file the Articles of Organization with the Secretary of State. This article briefs the government about your venture, and can be filed online for $50 payable by e-check or credit card, or through the mail for $105 payable by check signed out to the Secretary of State. An online account has to be created if filing online.
You will have to determine whether your LLC would be manager-managed or member-managed.
A foreign LLC needs to be filed if you are expanding your existing LLC to Missouri, and a Certificate of Good Standing issued by your home state within 60 days from when you registered for foreign LLC with the Missouri Secretary of State must be attached to your filing.
Following details are required to fill the application:
- Name of LLC
- Purpose of the company
- Name and address of the registered agent in Missouri
- Situations that may cause the company’s dissolution
- Name(s) and street address(es) of each member
- Name and address to return filed document
- Organizer’s signature
Frequently Asked Questions
What is the difference between manager-managed or member-managed LLC?
|Manager-managed LLC||Member-managed LLC|
|Centralized managementAdministrative power is allocated to one or more manager for day-to-day affairManager(s) have the authority in decision making||Decentralized managementAdministrative power is dispersed among the members for day-to-day affair The vote of every member is required for all decisions|
What is the difference between a domestic LLC and a Foreign LLC?
An LLC is domestic if it performs its business in the state where it was formed.
A foreign LLC refers to the LLC formed when the existing LLC expands its business to another state.
What is the processing time to form my Missouri LLC?
Immediately, if the payment is made online or 3-6 business days if it is done by mail.
How to obtain a Certificate of Good Standing in Missouri?
A Certificate of Good Standing signifies that your business is compliant with state regulations and was legally formed. You can request a Certificate of Good Standing from the Secretary of State online or via mail by paying $10.
What is the cost of starting an LLC in Missouri?
The cost to start a Missouri LLC is $50 online or $105 via mail. This fee is to be paid when filing the articles of organization document to the Secretary of State.
Step 4: Create an Operating Agreement
What is an operating agreement? An operating agreement is an internal legal document structuring the working procedure of an LLC. Missouri requires all LLCs to have an operating agreement per Revised Statutes Section 347.081 of the State’s legal code. This agreement briefs about the finance and functional working details of the business. The document manages the internal affairs and ensures all the members are on the same page. It need not be submitted to the Secretary of State or any other governmental agency.
What is included in Missouri LLC operating agreement?
- Allocation of profits, distributions, and losses among the members
- Voting structure for decision-making
- Membership interests
- Veto, rights, and duties of members and managers
- Accounting records of LLC
- Changes to the membership structure
Every member can have a copy of the document. In case of dissolution or addition/subtraction of a member, the operating agreement may be looked up for further proceedings or may require amendments from time to time.
Step 5: Get an EIN
EIN Stands for Employer Identification Number. It is often referred to a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number(FTIN). It is a nine-digit number for your LLC assigned by the Internal Revenue Service (IRS), which not only identifies your business for tax purposes but provides legitimacy to your venture. The IRS uses EIN to keep track of your tax returns. All LLCs with employees or LLCs with more than one member must have an EIN. Applying for an EIN is free of cost. This can be done online or via mail or by fax.
Benefits of EIN:
- Open a business bank account
- The unique EIN prevents identity theft
- File and manage Federal and State taxes
- Separates personal and business finances
- Hire employees
Frequently Asked Questions
1. How much time is required to get an EIN?
The application process takes a few minutes, but the number is assigned immediately online. The mail-in process takes about 4-6 weeks.
2. What if I already have an EIN for my sole proprietorship?
The IRS requires that sole proprietorships get a new EIN while converting to an LLC.
3. How can I file an EIN without a Social Security Number?
You do not need SSN to get an EIN. Social Security Number is only required if you are applying online for an EIN. You can fill out IRS form SS-4 via mail or fax to get an EIN without a Social Security Number for your LLC.
4. What tax structure should I choose for my Missouri LLC?
After you get an EIN, you will be informed about the different tax classification options that are available. You will be given three categories for taxing your LLC: sole proprietorship, partnership, or corporation. There are several factors to bear in mind, such as financial plans, overall company goals, etc., before choosing the tax status for your LLC. We recommend you speak to a tax professional to discuss every aspect before making the final call.
Key Points to Consider After Forming an LLC
1. Get business insurance for your Missouri LLC
Business insurance manages risk factors and enables you to focus solely on growing your business.
2. Create your business website
Business website amplifies reach to potential customers.
3. Publicize the venture
Publicity via social media or print media paves the way for potential customers to access the material locally as well as overseas.
Frequently Asked Questions
1. What is a series LLC in Missouri?
A series LLC is specifically designed to allow a single master LLC to work as an umbrella for the management of multiple separate LLCs. The master LLC provides limited liability protection to every other ‘child’ LLC without setting up LLC in Missouri for every individual business you run.
2. How do I change ownership of an LLC in Missouri?
To change ownership of an LLC in Missouri, you will have to file an Amendment of Articles of Organization for $25 with the Secretary of State’s office.
3. How to dissolve an LLC in Missouri?
Once your business becomes dormant, and you no longer wish to continue its operations, it becomes necessary to dissolve it to avoid any penalty or legal trouble. The concerned authorities such as the IRS or licensing authorities will consider the business active until told otherwise. With an active business, you will be required to file annual reports and taxes. Failing to do so will entitle you to penalties and legal action.
To dissolve an LLC in Missouri, follow these steps:
- Refer to your operating agreement – For most of the LLCs, the dissolving procedure has been mentioned on the operating agreement, which outlines essential points considering asset distribution among the members, settling business debts, notifying creditors, etc.
If your LLC does not have dissolution procedures in its operating agreement, consult the Secretary of State for further instruction.
- Close your business tax accounts – Before you dissolve your LLC, you must pay off all taxes, debts, and fines (if any) associated with your LLC to respective tax accounts under the Missouri State Government. However, you are not required to obtain tax clearance from the Department of Revenue before dissolving your LLC in Missouri.
- Notice of ‘Winding up’ – After you have voted to dissolve the LLC, you must file a notice of winding up to the Secretary of State along with a $25 fee. It will contain the following basic information about your LLC:
1) Name and charter number of your LLC
2) Date of filing of its articles of organization
3) Name and address of people with claims against the LLC may mail those claims
4) Authorized signature(s)
5) Name and address to return filed document
- Articles of Termination- After distributing assets and properties, you will file articles of termination with the Secretary of State. The articles of termination contain similar information to the notice of winding up, with the following few additional points:
1) The reason for the filing of articles of termination
2) The effective date for the article
3) Date when notice of winding up was filed with SOS
4) Authorized signature(s)
Once the application has been filed and processed, your LLC would be officially dissolved. Business owners can submit their articles of termination online or via mail.