Starting a Business in Mississippi: 8 Essential Steps

With its consistent pro-business policies and low labor costs, Mississippi is an attractive place for entrepreneurs. Before starting your small business, you must complete the incorporation process and register your Mississippi business with the state. Here’s a step-by-step guide to help you successfully start a business in Mississippi.  

Start Operating in Mississippi: Key Points

• As a small business owner, you’ll be in great company, with small businesses in Mississippi making up 99.3% of all businesses in the state.[1] 

• Depending on the nature of your business, you can form a limited liability company, a corporation, or a nonprofit. 

• Mississippi doesn’t require a general business license. Still, you may need to obtain a privilege license to operate in your county or municipality. 

Ready to Start a Mississippi Business?

Setting up a business in Mississippi may seem out of reach at first, but even brand-new entrepreneurs can successfully register their small business in The Hospitality State. To avoid costly mistakes, it’s essential to research the incorporation process in Mississippi and gather information about all of the necessary steps and requirements. 

We’re here to help you start operating in Mississippi in no time. From choosing a promising business idea to obtaining appropriate licenses and permits, follow the steps below to become a business owner in The Magnolia State. 

1. Choose a Business Idea

Every new business starts with a business idea, and your Mississippi business is no exception. You may already have a business idea that lights you up, but for many entrepreneurs, choosing the right business idea takes time. If you’re short on inspiration, here are a few tips. 

• Identify your passions and interests. Consider what genuinely interests you. Starting a business in Mississippi to do something you love can lead to greater motivation and satisfaction.

• Solve a problem or fill a gap. Look for problems in your industry or community that need solving. For example, these nine green business ideas can help the environment.

• Do market research. The key to building a successful business is creating products or services that are in demand. Agriculture, food & beverage, and logistics are critical industries in Mississippi with diverse opportunities.[2]

• Ask for feedback. Share your business idea with well-meaning family members, friends, mentors, or potential customers. Their feedback can provide valuable insights and help you refine your concept.

• Plan for the future. Your business idea should align with your long-term goals. Consider factors like scalability, evolving customer needs, and lifestyle preferences. 

It’s normal for your business idea to evolve. Be open to adapting your business vision as you gain experience and receive feedback. Start with an idea that makes you feel genuinely inspired, and don’t be afraid to dream big. This is how the most successful businesses in the world started.  

→ Starting a business in Minnesota as a recent college graduate? Here are eleven profitable small business ideas you can try. 

2. Draft a Mississippi Business Plan

Starting a new business in Mississippi is exciting, but it requires careful planning to increase your chances of success. Drafting a well-structured business plan for your startup is a crucial step to business formation that’ll help you figure out the strategy for bringing your business idea to life. 

There’s no set business plan format that every business needs to follow. You can use an in-depth traditional business plan or draft a leaner startup business plan. Above all, your business plan should reflect your unique business goals. That said, successful business plans typically include the following sections: 

• Executive Summary: a concise section highlighting the most essential parts of your business plan, including key goals, target market, and financial projections.

• Business Description: an explanation of your business concept, unique selling points, and future growth plans.

• Market Analysis: an overview of industry trends, your target audience, and main competitors.

• Products and Services: in-depth information about your products and services, including their features, benefits, and how they meet the needs of your target market.

• Marketing and Sales: a breakdown of how you plan to attract and retain customers, your pricing strategy, and your marketing channels.

• Financial Plan: revenue and expense projections, overview of important financial milestones, and funding information.

• Operations and Management: a detailed explanation of how you’re going to operate your new business, such as whether you’re going to hire employees.

• Appendix: space for supporting documents, such as legal agreements and market research data. 

Drafting a business plan isn’t merely a formality. If you start operating in Mississippi without a business plan, you will expose yourself to costly mistakes and risk missing out on meaningful opportunities. For example, you may not take advantage of an innovative industry trend or fail to anticipate business expenses. 

Creating a business plan minimizes your risks and provides you with an informed strategy you can fall back on. The Small Business Administration (SBA) has downloadable business plan templates that you can use to get started. 

3. Select a Business Name

Choosing a business name is one of the most essential steps to starting a business in Mississippi. Your name should reflect your business idea, resonate with your target audience, and comply with legal requirements. Get creative and brainstorm multiple options to create the best name for your new business.  

Here are some tips and important considerations to get you started. 

• Pick a unique name. Your business name can’t be “claimed by others, online or offline.”[3] You can do a Mississippi business search on the Mississippi Secretary of State website to check if your desired business name is available. Alternatively, use our Free Business Name Search tool.

• Keep it simple. Make sure that your business name is simple and concise. It should be easy to remember, pronounce, and spell. Avoid overly complicated or lengthy names for better memorability.

• Consider scalability. Choose a name that will allow your business to grow and evolve. You may want to create new products or services in the future and your business name shouldn’t limit you. It’s also important to be cautious with trendy words or phrases that may quickly become outdated. 

Once you find an available business name, consider reserving it with the Mississippi Secretary of State. Name reservation ensures that no one else can use your desired name to start a business in Mississippi. It would be best to consider buying your domain name and securing your social media handles.    

4. Choose a Business Structure

When choosing a business structure for your Mississippi business, you have options. It’s essential to spend time researching different types of business entities and make an informed decision. The structure you select impacts your legal and tax obligations and plays a significant role in how you operate and grow your business. 

You can incorporate your Mississippi startup as a limited liability company, a corporation, or a nonprofit. You may also choose to conduct business as a sole proprietorship and file for a DBA. We’ll explain these different types of legal entities below. 

Sole Proprietorship

A sole proprietorship is the default business structure that doesn’t require incorporation. You don’t need to file paperwork with the Mississippi Secretary of State. If you carry out business activities in the state, you’re automatically considered a sole proprietor. However, sole proprietorships still need to comply with licensing requirements. 

One of the main downsides of being a sole proprietor is the lack of liability protection. As a sole proprietor, your business assets and personal assets are not separate from each other. If your business has debts or faces litigation, your personal property, such as your house or car, may be at risk. 

Sole proprietors can do business under their legal name or file for a DBA (doing business as). Most banks require sole proprietors to have a DBA to open a business bank account. A DBA may also help your company improve credibility. 

Limited Liability Company

Many entrepreneurs decide to register their business as a limited liability company (LLC) because this business structure combines the flexibility of a sole proprietorship with the liability protection of a corporation. 

LLC owners can still report their business revenue and expenses on their personal income tax return like sole proprietors do, but forming an LLC separates your business assets from your personal assets and liabilities. LLCs are also easy to manage because they don’t face many administrative requirements. We can help you easily start an LLC in Mississippi. 

Corporation

Corporations are robust legal entities that provide their owners, known as shareholders, with strong liability protection. Forming a corporation offers various advantages, including the ability to issue stock, straightforward transfer of ownership, and ease of operation internationally. 

It may sound like starting a corporation is something only big businesses should do. Still, many small businesses are registered as corporations. In Mississippi, you can form a C corporation or an S corporation. An S corporation is a tax status that can help you avoid double taxation. We can help you file for a C Corporation or an S Corporation quickly.  

Nonprofit

A nonprofit organization is a unique business structure reserved for businesses that are advancing a social cause without an expectation of profit. The main difference between a nonprofit and other business structures is that it can qualify for tax exemption. Nonprofits are also funded by donations, not investments. 

Public schools, charitable organizations, and churches are examples of nonprofit organizations. If you want to start a nonprofit in Mississippi, We can help you complete the business formation process online and in minutes. 

Choosing the Right Business Structure for Your Small Business 

Most small businesses are either limited liability companies or corporations. Many small business owners start as sole proprietors and eventually move on to incorporating their businesses to improve credibility and have liability protection.  

5. File Business Formation Documents

To officially become a Mississippi small business owner, you must file your business formation documents with the Secretary of State and pay a filing fee. What kind of paperwork you need to file depends on your chosen business entity. Forming a corporation in Mississippi requires different documents than starting a limited liability company. 

Mississippi LLC Formation Documents

To form a limited liability company in Mississippi, you must file a certificate of formation with the Secretary of State. This document is also known as the articles of organization. This form will ask you to provide foundational information about your business, such as its principal office address. 

It would be best if you also considered drafting an LLC Operating Agreement. It’s a legally binding document that outlines the rules and regulations for the operation of your business. Some banks may also require you to submit a copy of your operating agreement when applying for a business bank account.  

Mississippi Corporation Formation Documents

To form a corporation in Mississippi, you must file an articles of incorporation with the Secretary of State. This document is also known as the Certificate of Incorporation. You’ll need to provide essential information about your business, such as the name of your corporation and its stock structure. 

It would be best to draft corporate bylaws to determine your corporation’s operating rules and internal structure. You don’t need to file the bylaws with the Mississippi Secretary of State, but they should be kept on file at your office.

Mississippi Registered Agent

Mississippi requires all business entities to appoint a registered agent to receive legal notices and essential documents for your LLC or corporation. You can decide to serve as your own registered agent or select a professional service like ours. Hiring a professional registered agent gives you more flexibility and better compliance. 

How to File Your Mississippi Business Formation Documents

You can use the Mississippi Business One Stop Shop to start the business formation process. When filling out your paperwork, provide accurate and appropriate information. Even the slightest inconsistencies can result in costly mistakes and negatively impact your tax obligations or liability protection. 

We’re here to help you file for your LLC, corporation, nonprofit, or DBA accurately and swiftly. Answer a few questions about your business on our online portal, and we’ll file all necessary paperwork with the Mississippi Secretary of State so you can start operating your new business in no time.

6. Apply for Mississippi Business Licenses and Permits

Mississippi doesn’t require all businesses to obtain a general business license to operate in the state. However, your small business may need federal, state, or local permits depending on your location and the nature of your business services or products. It’s crucial to investigate licensing requirements before you start operating in Mississippi carefully. 

Federal Business Licenses

The federal government regulates specific business industries to ensure safety and compliance with the norms. If your Mississippi startup does business in one of these regulated industries, you must obtain a federal business license. Alcoholic beverages and commercial fishing are examples of industries regulated at the federal level. 

Remember that obtaining a federal license doesn’t satisfy state or local requirements. For example, if your business deals with alcoholic beverages, you’ll likely need to get proper licensing from the state of Mississippi and your local county or city in addition to the federal license. 

State Business Licenses

Mississippi doesn’t require a general business license, but businesses in specific industries may be required to “file additional registrations, pass examinations, or provide certifications to other agencies or boards of the State of Mississippi.”[4] 

You can find the complete list of regulated industries on the Business One Stop Shop website. Barbers, cosmetologists, teachers, and massage therapists are just some of the professions that require additional Mississippi business licenses or certifications. 

Local Business Licenses

Your local government may have additional licensing requirements for your business. You may be required to obtain a privilege license to operate in your county or municipality. You may also need to apply for a building permit, a health permit, an alcohol and tobacco permit, and more. Contact your city clerk or licensing office for the most accurate information. 

Get Business Licenses with Swyft Filings

It’s essential to get all appropriate business licenses and permits after incorporation. Starting to operate your business without the necessary licenses can result in high fines or even force you to shut down your business. 

Navigating business license requirements can be confusing, but we’re here to help. We can research what types of business licenses your business needs and file your applications with the appropriate agencies at the federal, state, and local levels so you can focus on your passion — your business.

7. File and Report Business Taxes

As a small business owner, you’re responsible for paying your business taxes accurately and on time. Missing tax deadlines or providing incorrect information is a severe offense that can result in legal action and fines. It’s crucial to research tax obligations that your business has and note important filing dates on your calendar. 

Most Mississippi businesses must file federal taxes with the IRS and local and state taxes to the Mississippi Department of Revenue. Companies operating in Mississippi also typically need to register for income withholding tax, sales tax (seller’s permit), and unemployment insurance tax.[5] Mississippi also has a franchise tax that applies to most corporations. 

8. Open a Business Bank Account

Small business owners should open a separate bank account to ensure liability protection and simplify their accounting. It would be best to consider getting a debit or credit card for your business expenses. 

Most banks require an employer identification number (EIN) to open a business account. This tax ID number is also known as a federal employer identification number and you can think of it as a social security number for your business. The Internal Revenue Service uses it to identify your business for tax purposes. You’ll also need an EIN if you plan on hiring employees. 

You can apply for an EIN on the IRS website. For a more effortless and faster process, Swyft Filings can get an EIN for you.  

Take Your First Steps Toward Small Business Ownership

The Hospitality State is an excellent place for entrepreneurs to turn their exciting business ideas into successful startups. To start a new business in Mississippi, you have to register your business with the Secretary of State as well as apply for any necessary business licenses and permits. 

We’re here to support you on your journey to becoming your own boss. Whether you’re forming an LLC, a corporation, or a nonprofit, we’ll handle all the paperwork your business needs to start operating in Mississippi. Answer a few questions about your business, and our experienced Business Specialists will take on the rest. 

Frequently Asked Questions

Is Mississippi a good place to start a business?

With its low labor costs, generous access to funding, and a business-friendly spirit, The Magnolia State is a great place for entrepreneurs and small business owners to turn their dreams into reality. 

How much does it cost to start operating in Mississippi?

The startup costs depend on the nature of your business and your chosen business structure. You can expect to cover a filing fee when you register your business with the Secretary of State as well as when you apply for business licenses and permits. 

Can I start a business in Mississippi without a business plan?

Drafting a detailed business plan increases your chances of success. It will help you make more informed decisions and grow your business faster.  

What does Mississippi require to start a business?

To start a business in Mississippi, you must file business formation paperwork with the Secretary of State. Depending on the nature of your business, you may also need to obtain federal, state, or local licenses. You’ll also need to register with the appropriate tax authorities. 

What is the process for starting a business in Mississippi?

Once you finalize your business idea and decide on your business structure, you must file formation paperwork with the Mississippi Secretary of State. Before you start operating your business, it’s vital to obtain any necessary business licenses and register with tax authorities. 

Why are most LLCs in Delaware?

Delaware has unique pro-business policies that appeal to many entrepreneurs. Learn more about starting an LLC in Delaware. 

Bibliography

1. U.S. Small Business Administration. “Small Business Profile.” Accessed September 9, 2023. 

2. Mississippi Development Authority. “Mississippi Industries.” Accessed September 9, 2023. 

3. Mississippi State University. “New Business Quick Start.” Accessed September 9, 2023. 

4. MississippiBoss Business One Stop Shop. “Start Your Business in Mississippi.” Accessed September 9, 2023. 

5. MississippiBoss Business One Stop Shop. “Start Your Business in Mississippi.” Accessed September 9, 2023.