Create an LLC

How to start an LLC in Missouri

Missouri has no annual report requirements for LLCs, making it a worthy destination for any entrepreneur. Here’s a guide for setting up your own LLC Missouri.

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A limited liability company (LLC) is a type of business structure that combines the simplicity of a sole proprietorship or limited partnership with the personal liability protection of a corporation. This flexibility is what makes LLCs so popular. In Missouri alone, there are over 127,000 limited liability companies1. That is, in part, because the state of Missouri doesn’t require LLCs to file an annual report as is the case with other states. This makes it a great place to set up an LLC business of any kind.

So, how do you get an LLC in the state of Missouri? To create an LLC in Missouri, you will have to file articles of organization with the Missouri Secretary of State. Articles of organization are the official LLC formation documents, which when approved, bring your company into existence. However, there are some important steps to take before and after filing your LLC’s articles of organization.

Here’s a step-by-step guide on how to form an LLC in Missouri.

Missouri LLC fee breakdown

The cost of forming an LLC in Missouri is $50 if you file your articles of organization online and $105 if you send them by mail. Keep in mind that this is strictly the fee for filing articles of organization. Other things like filing fees for business licenses may raise the amount.

For example, if you want your LLC to trade under a different name than its legal name, you may consider applying for a “doing business as” name. Often abbreviated to DBA, a “doing business as” name is at times known as an assumed or fictitious name. It costs $7 to obtain a DBA name in Missouri2. The amount is payable to the Missouri Secretary of State.

In case you want to reserve your LLC name as you prepare formation documents, you can file for a Missouri business name reservation. This will cost $25, and you’ll get exclusive rights to the name for up to 60 days (renewable two more times to a maximum of 180 days)3. Other business owners will be barred from using the name for as long as you have it reserved.

Once you are ready, follow the steps below to form an LLC in Missouri:

Step 1: Name your Missouri LLC

The first thing to do when organizing an LLC in Missouri is to find a business name for it. Ideally, your LLC name should be one that your target customers can relate with. That said, Missouri does have some naming guidelines for business owners:

  • Your business name should be unique. It should not be similar or closely related to the name of a registered company or foreign LLC operating in Missouri. You may run a name search at the Missouri Secretary of State's website to find out if your chosen name is available.

  • The business name must contain the phrase “Limited Liability Company” or “Limited Company”, or any of their abbreviations (LLC, L.L.C, LC, or L.C.)

  • Your chosen Missouri LLC name should not contain the phrases “incorporated”, “corporation”, “limited partnership”, limited liability partnership” or any abbreviations of these phrases.

  • The name you select should not include words that can confuse your company with a government agency such as “State Department” or “FBI”.

  • The name of your LLC should not contain restricted words like “attorney”, “bank” or “university” unless the word, in fact, describes your LLC. For example, if it’s a law firm, you may use the word “attorney”. Restricted words generally require additional paperwork and licensing.

Business name reservation in Missouri

If you’ve settled on an LLC name but are not ready to register your company yet, you can reserve that name to prevent others from using it. To do that, download and fill out the business name reservation form, then mail it to the Missouri Secretary of State at:

Corporations Division

P.O. Box 778 / 600 W. Main St., Rm. 322

Jefferson City, MO 65102

It costs $25 to reserve a business name in Missouri. Make out a check to the Secretary of State and send it along with your application form. You will have exclusive rights to the name for 60 days, but you can renew the reservation two more times (to a maximum of 180 days).

Get a Missouri DBA

LLCs typically don’t need a DBA or fictitious name. However, in some situations, you may find that your LLC’s legal name is not as marketable as you would like. While you have the option to change it altogether, it will generally take less time and effort to obtain an assumed name.

Registration of a fictitious name costs $7 in Missouri. You can either file online at the Secretary of State's website or download the fictitious name application form, fill it out, and mail it to the Secretary of State, along with the $7 check. Your DBA must be renewed every five years.

Step 2: Choose a registered agent in Missouri

Once you’ve found a name that works for your LLC, the next step in the formation process is getting a registered agent.

A registered agent is either an individual or business entity that agrees to accept service of process, government correspondence, tax forms, and other legal documents on behalf of your company.

The state of Missouri requires all LLCs to appoint a registered agent. According to Missouri Law 351.370, a registered agent must:

  • Be a resident of Missouri or a business entity that provides registered agent services in the state.

  • Have and maintain a registered office in Missouri. This should be a physical location, not just a P.O. box.

  • Be available to accept service of process and other legal documents at the listed physical location during normal business hours.

Failure to appoint and/or maintain a Missouri registered agent can lead to fines or the dissolution of your LLC. So, make sure to choose one from the outset. If you will not be available in your business location during business hours every day, you can use a registered agent service to ensure that someone is always available to receive legal documents, as per state laws.

Step 3: File Missouri articles of organization

To formally create your Missouri LLC, file articles of organization with the Missouri Secretary of State.

You can file online or send it by mail. Should you prefer the latter option, you will need to download the Missouri Articles of Organization, fill them out and mail them to the following address:

Corporations Unit

James C. Kirkpatrick State Information Center

P.O. Box 778

Jefferson City, MO 65102

What is included in the Missouri Articles of Organization? Among other things, your LLC articles of organization include:

  • The name of the company

  • Your purpose for organizing the LLC

  • The name and physical address of your Missouri registered agent

  • Whether your LLC will be member-managed or manager-managed.

  • The term of the LLC or the events that may lead to its termination. Bear in mind that you can form a perpetual company.

  • The names and physical addresses of the members.

  • Whether or not you want to organize a series LLC. This may be a better alternative to forming two or more different LLCs.

  • The principal office location of the LLC. You may include a P.O. box along with the physical address of the office, but a P.O. box alone is not sufficient.

  • The effective date of your LLC articles. This can either be the date of filing or a future date that you may specify.

The cost of filing Missouri articles of organization is $50 if you file it online and $105 if you send it by mail. Your articles will be processed immediately after you make the payment if you file it online, and after three to six business days if you send it by mail.

It’s worth mentioning that articles of organization are strictly meant for creating native businesses. If you are trying to expand an existing business into Missouri, you will need to register a foreign LLC. That involves filing an Application for Registration of a Foreign Limited Liability Company with the Missouri Secretary of State.

Step 4: Receive a certificate of formation from Missouri

Once your articles of organization are processed and approved, the state of Missouri will issue you a certificate of formation. This proves that your company is now registered and you can start conducting trading activities. Beyond that, a certificate of formation may be necessary for other reasons, including when applying for an Employer Identification Number (EIN) or opening a business bank account.

Step 5: Create a Missouri operating agreement

It’s always wise to have an LLC operating agreement whether your company is a single-member LLC or a multi-member LLC.

An LLC operating agreement is a legal document that establishes the ownership, rights, responsibilities, distributions, and liabilities of members of a limited liability company. It may also spell out the business structure, tax classification, and operating guidelines of the LLC. An operating agreement is essentially the equivalent of bylaws, but for LLCs.

An operating agreement is required in the state of Missouri. In 2018, Missouri enacted the Revised Statutes Section 347.081 of its legal code, making it mandatory for limited liability companies to have an operating agreement. If you create a Missouri business and fail to draw up an operating agreement, your articles of organization, limited liability agreement, and member control will by default become your company’s operating agreement3. The default state law takes effect on any issues that are not addressed in the aforementioned documents.

Rather than leaving it to the state to determine how your LLC should operate, it is much better to create your own rules and enact them through an operating agreement. A well-drafted operating agreement will include:

  • Basic information about the company, including its ownership, its physical address, the principal place of business, purpose, etc.

  • The rules and guidelines for managing the company’s affairs.

  • Conditions under which it may be terminated.

  • The ownership percentages and voting rights of each member.

  • The rights, responsibilities, and powers of members, managers, and employees.

  • Profit and loss distributions among members.

For multi-member LLCs, an operating agreement can be a handy tool for preventing future conflicts. It ensures that all the members are on the same page regarding ownership, rights, and duties, which effectively reduces the possibility of future misunderstandings. That said, single-member LLCs need operating agreements too.

Do you need to file your LLC operating agreement in Missouri? No, you do not need to file your operating agreement in Missouri. It is an internal document that you should safely keep on file for reference.

Step 6: Get an EIN number

The Internal Revenue Service (IRS) requires all LLCs with employees, as well as those with more than one member, to have an Employer Identification Number (EIN).

What is an EIN? 

An Employer Identification Number is a nine-digit number issued by the IRS to business entities for identification and tax purposes. It is the equivalent of a Social Security Number, but for businesses. In Missouri (and any other state for that matter), all multi-member LLCs are required to have an EIN. The same is true for all LLCs that have employees.

That said, even if your company is a single-member LLC with no employees (as is the case with freelance and gig work), you may still benefit from having an EIN. The number will make it easier to file state and business taxes, hire employees and open a business bank account.

How can you get an EIN for your Missouri LLC? You can apply for an EIN online at the IRS website, or by mail or fax. Click here to get your Missouri EIN online. To apply for your EIN by mail or fax, download the IRS Form SS-4 (Application for Employer Identification Number), fill it out and send it to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

An EIN is free to obtain.

Keep in mind that you still need to apply for a new EIN when forming an LLC, even if you already have one for a sole proprietorship that you currently own. Similarly, converting a sole proprietorship to an LLC requires that you apply for a new EIN.

Step 7: Get Missouri business licenses and permits

The sales tax license is the only state-level business license in Missouri. Every business that operates in the state must obtain this license. The same is true for any company that intends to sell or lease taxable products in the state.

That said, you are also required to post a sales and use tax bond that is equal to three times your LLC’s estimated monthly tax liability. If the estimated tax liability is under $500, then your sales and tax bond is a flat $25.

You can apply for a Missouri sales tax license online or by mail. To apply online, head over to the Missouri Department of Revenue website and follow the prompts. If you prefer to apply by mail, download the application form, fill it out and mail it to the following address:

Mailing Address:

Sales and Use Tax

Taxation Division

P.O. Box 357

Jefferson City, MO 65105-0357

The Missouri sales tax license costs $25, but it’s prone to changes, so check the Missouri Department of Revenue website to be sure. It is not renewable.

Although the sales tax license is the only state-level license in Missouri, LLCs in certain professions are required to obtain additional business licenses. Such LLCs include those in appraisal, accounting, finance, health, veterinary services, tattoo parlors, construction, design, pro boxing, and pro wrestling4. For more information on professions that require additional business licenses, visit the Missouri Division of Professional Registration.

Apart from state business licenses, you may also need permits from the local government depending on the nature of your business and/or its location. For example, all businesses in Jefferson City are required to have a city business license, unless expressly exempt.

Beyond that, you may need federal licenses and permits if your Missouri LLC operates in an industry that’s regulated by the federal government. Such industries include broadcasting, investment advertising, drug manufacturing, commercial transportation, preparation of meat products, and the sale of alcohol, tobacco, and firearms5.

Once your LLC is fully compliant with state business licenses, you can apply for a Missouri Certificate of Good Standing from the Secretary of State. This document proves that your business has all the necessary licenses and permits.

There are two ways to apply for a Missouri Certificate of Good Standing. The first is online via the Secretary of State's website. Secondly, you can place an order for your certificate by contacting the Corporations Division directly at:

Mailing address:

Corporations Unit

James C. Kirkpatrick State Information Center

P.O. Box 778

Jefferson City, MO 65102

Physical address: 

Corporations Unit

600 W Main St.

Missouri State Information Center, Room 322

Jefferson City, MO 65101-0778

Telephone:

(573) 751-4153

Toll free: 1-866-223-6535

Email:

corporations@sos.mo.gov

Step 8: Open a business bank account for your Missouri LLC

Once you’ve obtained your Employer Identification Number and all the necessary business licenses, you may use them to open a business bank account for your LLC. Some entrepreneurs – especially small business owners – often skip this step, opting to use a personal bank account for business finances. While this may save you the time and effort required to open a separate account, it can prove inconvenient and costly in the long run.

For one, having a dedicated account for your Missouri LLC will keep all business transactions in one place, making it easy to calculate and file your LLC tax returns. Besides, mixing personal and business finances makes it easier for creditors to pierce the corporate veil. In other words, you may lose your personal liability protection if you can’t clearly distinguish business finances from personal finances. This puts your personal assets at risk of collection resulting from business debts.

Finally, separating business finances from personal finances helps you qualify for small business deductions. You typically need to prove that the expenses you are deducting were, in fact, incurred by the business and not you personally. One of the easiest ways to do this is to have a dedicated checking account for your business where all incomes and expenses can pass through. An added advantage is that your Missouri LLC may qualify for a business credit card on account of having its own bank account.

Step 9: Complete everything else

Your Missouri LLC application is not fully complete until the business is up and running. As you prepare to launch, there are a few things you can do to start the business off on the right foot. These include:

  • Get business insurance – business insurance policies are important in risk management. When your company is well-covered, you will be less concerned about jeopardy and more focused on building the business. Some common policies that are worth your consideration include general liability, professional liability, and workers’ compensation insurance policies.

  • Create a marketing plan – a solid marketing strategy will help put the word out about your new Missouri business and the products/services you offer. There are many ways to advertise your brand. Some methods like internet advertising and press releases are fairly affordable yet effective. If you have the budget for it, you can consider traditional methods like TV and radio ads.

  • Hire your first employees – unless you’re registering a single-member LLC where you will run everything, chances are you will need to hire some employees. As a Missouri LLC owner, it’s important to verify that the individuals you bring to your team are legally allowed to work in the U.S. It’s your responsibility to report them as “new hires” to the state. You should also withhold their income taxes and provide workers’ compensation insurance coverage. The current minimum wage in Missouri is $11.15 per hour, and business owners are required to pay their staff on a semi-monthly basis.

Missouri LLC taxes

While most states require LLCs to file an annual report, Missouri does not have this requirement. There are, however, state taxes that your LLC may be subject to. Below is a look at some Missouri business taxes for LLCs:

  • Sales and use tax. Any Missouri business that sells a good (physical product) is required to obtain a seller’s permit from the Missouri Department of Revenue. This permit allows you to collect sales and use tax on every taxable sale that you make. You can get it by filling out Form 2643A, and then using Form 53-1 to file the annual sales and use tax.

  • Employer tax. This Missouri tax is applicable to all business entities that have employees. As the owner of an LLC, you are required to register for employee withholding tax as well as unemployment insurance tax. You can enlist for unemployment insurance taxes at the Missouri Department of Labor using Form MODES-2699, and then use Form MODES-4-7 to file the taxes. To file your Missouri employer taxes, use Form MO-941 for monthly or quarterly tax returns and form MO-W3 to reconcile the withholdings at the end of the year.

  • Corporate tax. If you elect to have your LLC taxed as a C corporation, the business will be subject to a Missouri corporate state tax, which is currently a flat 6.25%10. However, keep in mind that this LLC tax is not applicable to businesses that elect to be taxed as S corps, sole proprietorships, or partnerships. Here’s a more detailed guide on tax classifications. In case your LLC is required to pay Missouri corporation tax, you can file the returns using Form M)-1120 of the Missouri Department of Revenue10.

  • Federal LLC tax in Missouri. As is the case in all other states, Missouri LLCs are pass-through entities (except for those that elect the S corp tax status). This means that the IRS doesn’t require the business itself to pay any income tax on its earnings. All the profits (or losses) are passed through to members, who then pay income taxes on their personal tax returns. Thus, LLC earnings are not taxed at a corporate level, but they are taxed as soon as they are distributed to members. Thus, as a Missouri LLC owner, you will receive profit distributions, on which you have to file personal income tax returns. You may report your income using:
  • IRS Form 1040 Schedule C for a single-member LLC, or
  • IRS Form 1065 Partnership Return for a multi-member LLC.

Frequently asked questions

How much does it cost to start an LLC in Missouri?

The cost of filing LLC articles of organization in Missouri is $50 if you file online and $105 if you file by mail. This is strictly the cost of the organization and doesn’t include other state fees like registration of a fictitious name or obtaining business licenses.

How long does it take to form an LLC in Missouri?

The Missouri Secretary of State usually processes articles of organization as soon as you make the payment when filing online. If you send them by mail, it may take three to six business days.

What are the benefits of an LLC in Missouri?

  • LLC owners in Missouri can choose between various tax treatments, which may lower their tax liability.

  • Missouri does not require LLCs to file annual reports.

  • Missouri LLC filing fees are comparatively low.

  • LLC owners enjoy personal liability protection.

  • There is management flexibility.

How is a Missouri LLC taxed?

At the federal level, Missouri limited liability companies are taxed as pass-through entities. This means that the LLC itself doesn’t have to file tax returns. Instead, it passes its earnings to the owner(s), who then pay income taxes on their personal tax returns.

Missouri also has state taxes that some LLCs may be subject to. These include sales and use tax (for any business selling goods), employer tax (any business with employees), and corporate tax (for an LLC that elects to be taxed as a C corp).

What are the types of LLCs in Missouri?

There are six main types of LLCs:

  • Single-member LLC – this is a limited liability company that’s owned and operated by a sole member.

  • Multi-member LLCs – these are LLCs that are owned by more than one person.

  • General partnership – this type of business features multiple members, who typically share duties, debts, and obligations. Generally, at least one member of a general partnership must have unlimited liability.

  • Family limited partnership – this is a business that’s fully owned and operated by members of a family.

  • Professional limited liability company – this is an LLC organized to offer professional services such as medical, accounting, finance, or legal services.

  • Member-managed and manager-managed LLCs – a member-managed LLC is usually run by the owners of the business. On the other hand, a manager-managed LLC is a business that’s run by hired professionals.

Where can I conduct a name search for my Missouri LLC?

You can run a name availability search at the Missouri Business Entity Search website. In case you prefer to make a call, you can reach the Missouri Secretary of State’s office at (573) 751-4936. They will run a preliminary search to see if your chosen business name is available.

References

  1. 28 Jun. 2022, Missouri Secretary of State.
  2. 15 Nov. 2021, FindLaw
  3. 28 Jun. 2022, Missouri Secretary of State.
  4. 13 Apr. 2022, Forbes.
  5. 20 Jun. 2016, FindLaw.
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