Business Quick Start Guide
This quick start guide is designed to help you through the first steps of forming a new company in the State of Mississippi. Please ask for assistance with any stage as needed. Please note — the content below is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.
1. Choosing a Company Name
Factors to Consider When Naming Your Business
Many businesses start out as freelancers, solo operations, or partnerships. In these cases, it’s easy to fall back on your own name as your business name. While there’s nothing wrong with this, it does make it tougher to present a professional image and build brand awareness.
- How will your name look? – On the web, as part of a logo, on social media.
- What connotations does it evoke? – Is your name too corporate or not corporate enough? Does it reflect your business culture? Does it appeal to your market?
- Is it unique? – Pick a name that hasn’t been claimed by others, online or offline. A quick web search and domain name search (more below) will alert you to any existing use.
- Is your proposed name ‘Web-Ready’? – In order to claim a website address or URL, your business name needs to be unique and available. It should also be rich in key words that reflect what your business does. To find out if your business name has been claimed online, do a simple web search to see if anyone is already using that name..
Search for Trademark Conflicts
It’s a good idea to check if your desired company name, or variations of it, is trademarked. Remember that trademarks are applicable to specific scope of use, but you do not want consumer confusion or expensive changes later:
Search Business Name on Mississippi Secretary of State Website
Next you’ll want to search the Mississippi Secretary of State website for your desired business name (and similar names) to ensure it has not been registered and is available in Mississippi:
2. Form a Legal Entity in Mississippi
For most new businesses, a limited liability company (“LLC”) is a sufficient structure for your business that combines the benefits of pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. Like owners of partnerships or sole proprietorships, LLC owners report business profits or losses on their personal income tax returns; the LLC itself is not a separate taxable entity. Like owners of a corporation, however, all LLC owners are protected from personal liability for business debts and claims — a feature known as “limited liability.”
There are two documents you need to form a LLC. The first is the Articles of Organization, which legally creates the entity and is registered with the State of Mississippi. The second is the Operating Agreement, which you will simply keep on file for the business. You can think of these documents like the US Declaration of Independence and the US Constitution – the Articles of Organization says “you exist”, and the Operating Agreement says “how you will operate”.
File and pay for your Articles of Organization online with Mississippi Secretary of State – $50
The entire Articles of Organization filing process is now online in the state of Mississippi. You will follow the link, create an account, and during the filing process, you will be asked to provide the personal information of the “registered agent”. The registered agent is the person with whom the state will correspond regarding your company. Choose one member (usually the filing member), to have listed as your registered agent. This will be the person typically handling financial aspects of the company:
Prepare an Operating Agreement
First, if you have multiple partners, this is the point where it is an extremely good idea to hire an attorney, as there are both legal and tax consequences invoked by your operating agreement. This document defines how your company will be run. It dictates the ownership of the company, and defines important procedures like handling money and the decision making process. The E-Center has resources that can be used as a basic template, but it is ultimately up to you how your company will be structured. Our team is happy to explain points that may confuse you, but ultimately this is a complex legally binding document, and you should consult an attorney for assistance.
Check out reference documents located in the E-Center’s document library:
3. Register for Tax Accounts
Regardless of the entity you elect, just like you as an individual, your business must file a tax return reflective of money generated by the business.
Register for a Federal Tax ID number (also known as Employer Identification Number or EIN) – $0
Your business EIN number works like a social security number and is used by IRS to track your company for tax and other purposes. The same primary individual who registered the LLC will typically register for your EIN number, and is typically the person tasked with handling financial issues. (Note: For whatever odd reason, this form can only be filed Monday to Friday, 6 a.m. to 9 p.m. CT.)
Register for a Mississippi Tax ID Number (sales/use tax) – $0
The MS Department of Revenue is the primary agency for collecting tax revenues that support state and local governments in Mississippi. TAP stands for the Taxpayer Access Point. It provides you access to your online tax account at any time of the day.
MSU employees are permitted to start businesses; however, the university does have policies around participation in a business. There are two university policies that govern employee participation in startup companies.
OP 60.415 – Outside Employment and Consulting
MSU employees are required to abide by the Outside Employment and Consulting policy. These activities must avoid both real and perceived conflicts of interest and must comply with this policy and applicable state law. This policy involves completing a simple eForm filed each fiscal year.
OP 76.01 – Intellectual Property
Intellectual property at MSU is handled by the Office of Technology Management. This flowchart can help you determine if you need to engage with OTM prior to starting your business. More information about starting a company may be found on their website here:
In order to conduct financial transactions with your business, you will need to open a business checking account. Most banks and some credit unions offer small business banking products. You are welcome to choose any bank you are comfortable with so shop around. Make sure you look into the minimum account balance requirements, fees if any, and online banking options.
In addition to establishing an account, you should establish a recordkeeping system before you conduct any transactions (for example, QuickBooks, Xero, Sage, Freshbooks, etc).
Your business may be subject to multiple local, state, or federal regulations, depending on the type of business you are in. These may include:
- Business License
- Building Codes
- Health Department
- Liquor/Tobacco Licenses, Construction License, Professional License
- Sign Permit
- OSHA regulations
Paying employees includes its own set of responsibilities on employers. In general, you should :
- Get IRS publication – Circular E – Employer’s Tax Guide (https://www.irs.gov/publications/p15)
- Understand you will use your Federal Employer ID Number (FEIN) for Federal Withholding , FICA, and Federal Unemployment Taxes (FUTA)
- State Withholding number (in Mississippi, this is managed through TAP)
- State Unemployment Taxes number (SUTA) – Manage through MDES (https://mdes.ms.gov/employers/unemployment-tax)
- Sign up for E-verify to verify employees are eligible to work in the US. (http://www.uscis.gov/e-verify)
Handling payroll can be a little confusing if this is your first time. We strongly recommend you speak with an accountant who may have their own payroll services they can offer or explore various payroll service providers to help you with correctly filing and paying employees and related taxes. Some examples are:
- Gusto – http://gusto.com
- Square Payroll – https://squareup.com/us/en/payroll
There are many types of insurance required for various aspects of the business. The top you should consider are:
- General Liability
- Life Insurance on owners
- Worker’s Compensation
Building a business takes a support team of service providers. You should start early building relationships with:
- Insurance Agent
- IT Support
The E-Center maintains a list of service providers that have a track record of helping MSU companies, that may be found here: Professional Service Partners