How to Form an S Corporation in Mississippi

Introduction

Mississippi is a great place to start a business. While the state doesn’t have any major cities, it does have many small towns, which can be good for small businesses. When starting your own corporation in Mississippi, you’ll want to form an S corporation. This allows the company to pass its earnings through the corporate structure and avoid double taxation. Here’s how to form an S Corp in Mississippi:

What Is an S Corporation?

An S corporation is a corporation that elects to be taxed as a pass-through entity. The corporation itself does not pay taxes, but instead passes all profits and losses through to its shareholders. These shareholders report the company’s income or loss on their individual tax returns and pay taxes at their personal income tax rate.

Forming an S Corporation in Mississippi

Naming Your S Corp

If you want to form an S corporation in Mississippi, the name of your company must end with “incorporated,” “corporation,” or “limited,” or an abbreviation of one of these words. The name may also contain a word or abbreviation that indicates the nature of the business. However, it cannot include any words prohibited in Mississippi law (e.g., “bank,” “trust” and others).

The following are examples of acceptable names for an S corporation in Mississippi:

• Smith Inc.
• Bob’s Barbecue Inc.

Registered Agent and Office

In Mississippi, you must have a registered agent and office in order to form an S Corporation. A registered agent is the person or company that agrees to accept legal papers on behalf of your business. In other words, they’re the ones who will receive any official communications and deliver them to you.

The address where you keep records, receive mail and hold meetings should also be used for your registered office. This can be your home address or professional office space if those are more appropriate for your needs. You may also choose to use a virtual office located anywhere in the world as long as it’s available 24 hours a day, seven days a week and staffed by at least one person who will receive packages when they arrive at its location (this can be done through services like Regus).

Filing the Articles of Incorporation

The Articles of Incorporation can be filed with the Mississippi Secretary of State by mail or in person. The articles will need to contain a short description of your business, your address and phone number, the name and address of an agent for service of process (the person who will receive legal papers that are sent to you), how many shares the corporation will sell, their par value (if any), who owns each share and how many shares they own.

It’s important that you file within 60 days from when you formed your company as this is considered a “formal act” which must be done during your first year as an S Corporation.

Completing the Organizational Minutes

The organization of an S corporation should begin with the preparation of corporate minutes. These formal documents serve as a record of major corporate decisions and actions, such as when and where the corporation was formed; who were present during the meeting; how much stock each person purchased; whether or not all voting shares have been transferred or turned over to another party; and whether any changes have been made to the articles of incorporation.

The required information for organizational minutes is:

• The date, time, place and purpose for organizing your corporation.
• A list of all shareholders present at this meeting. Your board should include several individuals besides yourself who can represent you in case something goes wrong with your business (for example, if you get sued). You’ll also need at least one member from each class that has voted on this issue (if applicable). If there are no other shareholders present at this meeting—or they were unable to attend due to death or disability—you may appoint someone else as a proxy member instead.

Obtaining an EIN

If you are forming an S corporation, you must obtain an Employer Identification Number (EIN). The EIN is a unique nine-digit number assigned by the IRS to identify your corporate entity. If you form an LLC or partnership, you do not need to obtain an EIN.

To apply for an EIN:

• Go to the IRS website and select “Apply For An Employer Identification Number Online” under the Businesses tab on their homepage at www.irs.gov/businesses/small/.
• Enter your Social Security Number and other personal information as required in order to proceed with obtaining your EIN online.

Issuing Stock Certificates

Stock certificates are necessary to transfer ownership of stock from one person to another. They’re issued by the corporate secretary, and should include a description of each share of stock along with the name of your corporation, number of shares issued and date issued.

Adopting Corporate Bylaws

Corporate bylaws are the rules and regulations that govern a corporation. These bylaws should be created by the incorporators and filed with the state as part of your S Corporation application. They can also be adopted later on, but it’s best to get them right when you start out.

These rules typically include:

• How many people must approve major decisions
• How much notice they must give each other before voting
• What types of decisions require what levels of votes (for example, all large expenditures may require 2/3rds approval)

Keeping Records and Holding Meetings

Even before you set up your business, you should think about holding regular meetings. This will help keep everyone on the same page and prevent problems later down the road.

Keep a copy of the articles of incorporation, bylaws, and minutes from all board of directors meetings.

You should also keep a record of shareholder meetings with their votes (and any abstentions) for every fiscal year in which an election had taken place.

Forming an S Corporation in Mississippi is Easy and Beneficial

Forming an S corporation in Mississippi is easy and beneficial.

If you own a small business, you may want to consider forming an S corporation. More than half of all businesses are set up as sole proprietorships or partnerships, but these entities do not enjoy the same legal protections or tax benefits that corporations do. An S corporation offers many advantages over other types of businesses:

• Easy to form – You can form an S corporation by filing with your state’s Secretary of State office for free, often online.
• Easy to maintain – You won’t have any more paperwork than if you were operating under another structure; simply continue filing annual reports on your company’s activities and finances with the government (at least once per year).
• Tax advantages – For example, when you incorporate as an LLC or C Corp., taxes are paid at higher rates than if they were paid as personal income (for example, at 39%). However because most profits earned by an officer/owner of a corporation are considered distributions rather than salary income it results in significantly lower overall taxes owed through the year compared against regular wages paid out by other structures such as LLCs/LLPs or limited partnerships where profits accrue directly into the hands of owners rather than going through formalized payroll systems like incorporation does!

Conclusion

You should now have a solid understanding of how to form an S corporation in Mississippi. From there, the best way to get started is by following our step-by-step guide on how to form an S corporation in Mississippi. If you have any questions or need help along the way, please don’t hesitate to reach out! We’re always happy to help with any questions or concerns you may have about forming your business.