Follow our free guide to form an LLC in Missouri:
- Pros and Cons of Forming an LLC in Missouri
- Starting Your Missouri LLC
- Maintaining Your Missouri LLC
- Additional Missouri Resources
Check out our informative guide on building an LLC in Missouri and learn everything you need to know.
Pros and Cons of Forming an LLC in Missouri
Local Government Offers Businesses Support
Missouri is one of the best states for starting a small business. According to recent reports, the state offers business owners great support, low cost of living, and overall ease in starting a business.
Privacy for Owners
Missouri state law does not require the LLC members/manager to be listed in the Articles of Organization. An organizer (the party who prepares and files the paperwork) can be used to submit the official documents to the state in place of the actual owners.
No Annual Report Required
Missouri is one of the few states that does not require an annual report from businesses. This translates to both time and money saved, as some states charge as much as $200 to file a periodic report.
High Crime Rate
While some reports suggest a recent shift, the crime rate in Missouri is relatively high compared to the national average. In 2016, Missouri’s crime rate was 40% higher than the U.S. median. Kansas City and St. Louis are among the most dangerous cities in the country.
Competitive Labor Market
Missouri currently has a 3.4% unemployment rate, just under the national rate (3.7%). While this is good news for the state, it is less good news for small business owners who are looking to hire qualified employees.
Cost of Doing Business
- $50 filing fee / no annual report
- No corporate or franchise tax
Starting Your Missouri LLC
The process of forming an LLC in Missouri may seem complicated and difficult, but the steps involved can be fairly easy when you have the right help. Below if a list of the initial steps you must do to ensure that your Missouri LLC comes together correctly:
- Step 1: Name your LLC
- Step 2: Establish Ownership of your LLC
- Step 3: Decide on a Registered Agent
- Step 4: File the Articles of Organization
- Step 5: Create your Operating Agreement
- Step 6: Fill out the paperwork for an EIN
Step 1: Name Your Missouri LLC
Selecting a name for your new Missouri LLC is an important first step in forming your business. As you are making a list of possible contenders, there are a few guidelines to keep in mind:
- The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C
- Your business name cannot be intentionally misleading to consumers
- The name of your new LLC must not be similar to another organization’s name/trademark
A few restrictions do exist regarding the name of your LLC, depending on the state where you are starting your business.
A few examples include:
- “Lottery” and “Bank” are ineligible for use (any state)
- Terms that represent educations or Veterans’ organizations are restricted
- Terms related to the Armed Forces or civil servants (police, EMT, fire)
Sometimes an LLC business name associated with government and/or financial entities is not always restricted - it depends on the state. Additional paperwork may be required.
In addition to choosing a name for your LLC, creating an online presence is equally important in the current culture. You can easily check domain name availability at a number of online web services sites.
Step 2: Establish Ownership
LLC owners are actually known members or managers, depending on the chosen management structure of the business. Different from a corporation, an LLC has more than one option in how it is managed.
LLC Management Structures:
- Member-managed (ownership of business is divided among the members and all parties receive portions of the profits)
- Manager-managed (the appointed manager is the main operator and the members are passive investors who are not actively involved in the daily business operations)
After you have named your business, you need to choose a management structure and designate the members/manager of the LLC. The rules concerning LLC ownership in Missouri include:
Required Number of Members
Missouri LLCs must have at least one member or manager in order to form an LLC.
Member Disclosure Requirements
An organizer/authorized representative may sign and file the Articles of Operation in place of the LLC members.
LLC members in Missouri may be of any age.
There are no residency restrictions imposed on LLC members in Missouri.
Step 3: Find a Registered Agent in Missouri
Any LLC formed in Missouri is required to appoint a registered agent and submit the agent’s contact information (must be a physical address/not P.O. box) to the state. This agent must be accessible during standard business hours and acts as the state’s point of contact with the company.
What is a registered agent?
A registered agent is a person or business who is authorized to accept official government notices (including the Secretary of State) and service of process notices on behalf of the LLC.
Why do you need a registered agent?
Whenever you start an LLC in Missouri, the law requires you to appoint a registered agent so that the state government has a consistent contact person for your business. This position is definitely beneficial for LLCs that do not have a physical address.
Who can be a registered agent in North Carolina?
The requirements to be a registered agent are as follows:
- A resident with a physical address in Missouri
- An LLC or corporation that is licensed to conduct business in Missouri
It is also possible for you to be your own registered agent as long as you use a physical address.
Why you may not want to be your own registered agent
Because the registered agent’s name and address are a matter of public record, LLC business owners who choose to be their own registered agent risk compromising their personal information.
Tip: Avoid the hassles that come with being your own registered agent and choose Swyft Filings to fill the registered agent needs for small businesses in Missouri. Find more information here.
Step 4: File the Articles of Organization
The most important part of the initial set-up process is filing the Articles of Organization with the Secretary of State. Without the vital document, your Missouri LLC is not legally recognized by the state.
The Articles of Organization includes the following:
- The name of the LLC
- The location of the business
- The name(s) of the members or organizer filing the paperwork
- The name and location of the registered agent
- The structure definition as member-managed or manager-managed
- The statement of purpose
Additional Missouri Filing Requirements — Professional LLCs
Missouri allows professional service businesses to incorporate, designating these entities as a Professional Corporation/P.C. A professional service business can choose to form as an LLC, but the state does not impose any special designation or requirements for the business.
A few points to consider:
- All members of the LLC must still be licensed in the profession of the business.
- The LLC members are still subject to the licensing boards governing the LLC’s profession.
Step 5: Create an LLC Operating Agreement
While an Operating Agreement is not required by the state of Missouri in order to form an LLC, this document is absolutely necessary for any business because it adds structure to your company and projects professionalism.
What is an LLC Operating Agreement?
The LLC Operating Agreement is an in-house legal document that plainly lays out the rights and responsibilities of each person involved in the business and clearly details how the business will operate.
Why do I need an LLC Operating Agreement?
Because the LLC Operating Agreement defines the roles of the business’s members and provides direction for daily operations, the document ensures stability and structure to the LLC and reduces future disputes.
What goes into an LLC Operating Agreement?
While there is not a set rule of what must be included in your LLC operating Agreement, most documents include the following the information:
- Designation of the members/managers
- Initial capital contributions of the members
- Voting designations and percentages
- Member transfer/addition rules and restrictions
- Distribution of profits
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Step 6: Obtain an EIN
The state of Missouri requires an EIN for any business that has/will have employees. Additionally, most banks and financial institutions require the EIN in order to open any accounts.
What is an EIN?
The EIN (Employer Identification Number) is also known as a Federal Tax ID and is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS). The EIN identifies your business with the government much like a personal Social Security number.
What business entities need an EIN?
The types of business entities that need an EIN include:
- An LLC with employees (even if owned by one person)
- An LLC with more than one member
- A partnership (LLC or C-corp)
Please Note: A sole proprietorship is the only business entity that is not required to have an EIN.
Why is an EIN necessary?
The more common reasons you would need an EIN are:
- To hire employees
- To open a bank account in the U.S.
- To file your company’s taxes
- To pay independent contractors
Please Note: If you collect revenue of any kind through a business entity, you will need an EIN.
Swyft Filings offers EIN services for small businesses in Missouri. Find more information here.
Maintaining Your Missouri LLC
You have completed the initial phase of setting up your Missouri LLC, but the next process is meant to make you fully compliant with the state and get your business ready to function. The next few steps are:
- Step 1: Register for any required taxes in Missouri
- Step 2: Apply for the necessary permits and licenses
- Step 3: Request a Certificate of Good Standing
Step 1: Register for Missouri State Taxes
Like some other states, Missouri does not impose any corporate of franchise tax on LLCs. Members of the business will only need to pay state and federal income taxes on their portion of the earnings.
Any Missouri LLC that opts to be taxed as a corporation will be responsible for paying the 6.25% corporate tax, which is also scheduled to drop soon to 4% in 2020.
Step 2: Obtain Business Licenses and Permits
The business licenses and permits required in Missouri vary wildly depending on the county or municipality where your new LLC is located.
If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
Step 3: Obtain a Certificate of Good Standing
After your Missouri LLC has been formed and is ready for business, there is still one last step — getting a Certificate of Good Standing.
Most banks/financial institutions and businesses require proof that your new business is fully compliant with the state. Getting a Certificate of Good Standing provides your LLC with a “seal of approval” from the Secretary of State.
What is a Certificate of Good Standing?
The Certificate of Good Standing is an official notification from the government agency that confirms your entity has been properly filed and is still in compliance.
Why should I obtain a Certificate of Good Standing?
In the course of conducting business, there will be times when you will need to prove that your business is properly filed and fully compliant with the state. Many banks and businesses will request a Certificate of Good Standing as part of the due diligence process (especially during major transactions).
For the most part, any time you need to show your business is properly filed and fully compliant, you will likely need to present a Certificate of Good Standing.
Swyft Filings can create a Certificate of Good Standing for your Missouri LLC. Click here for more information.