Forming an LLC in Missouri (MO) is an excellent step for new business owners, so long as they understand the correct requirements and costs of setting up this type of business entity.
A limited liability company (LLC) is a type of business structure that combines limited liability with the flexibility of a partnership or sole proprietorship. Federal and state pass-through tax treatment also makes it an attractive business entity choice for many Missouri business owners.
Additionally, MO LLC assumes an easy setup process and comes with low annual maintenance costs. So it’s an attractive option for cash-strapped startups and small business owners.
Whether you plan to operate out of this state physically or just register a legal entity, here are the step-by-step instructions to start an LLC in Missouri.
Table of contents
- Step 1: Choose a name for your Missouri LLC
- Step 2: Designate a registered agent
- Step 3: File for articles of organization with Missouri Secretary of State
- Step 4: Obtain an EIN (Employer Identification Number) from the IRS
- Step 5: Prepare an LLC operating agreement
- Step 6: Open a business bank account
- Taxes, costs, and fees in Missouri for LLC
- Business permits and licenses in Missouri
- Pros and cons of forming an LLC in Missouri
- Takeaways
- Formation FAQs for an LLC in Missouri
Step 1: Choose a name for your Missouri LLC
You should first check if a Missouri LLC name you want is available. Remember, your LLC name has to:
- Be distinguishable from other MO-registered business names.
- Include the words Limited Liability Company or an abbreviation like LLC at the end.
You can conduct a business name availability search on the Missouri State of Secretary website using their name search tool. Found an unregistered name? Excellent, to prevent others from registering it, you may want to reserve the name.
An assumed name doesn’t have to be a fictitious name, “provided that the foreign corporation’s actual name shall be used together with its assumed name on documents filed with the Secretary of State. See Section 351.584, RSMo.”
Fictitious name
Domestic LLCs may want to register a fictitious name if they plan to run a Missouri business under a name other than its official corporate name.
It’s also called “Doing Business As” or DBA name. To register a fictitious name, you must submit a filing and pay a $7 state filing fee.
Name reservation for your LLC name
By filing a name reservation form online or by mail, you can reserve the business name for 60 days. The filing fee is $25.
It lets business owners reserve the LLC business name before completing and filing the other documents needed to form an LLC in Missouri.
The business name can be reserved for two additional 60-day periods, up to a maximum of 180 days total. But if the business name reservation runs out, your LLC can still use that name if it is not later used by another business entity.
Step 2: Designate a registered agent
All Missouri LLCs must appoint a registered agent as part of the LLC registration process. The job of a registered agent is to receive service of process documents on behalf of the LLC. Thus, they must be available during regular business hours.
Your registered agent must be a resident in Missouri (or authorized to conduct business in the state of Missouri), have a physical street address in the state, and be capable of handling legal documents.
Business entities can be Missouri registered agents if authorized to conduct business in the state, so long as they meet the other registered agent requirements. You can also be your own registered agent if you meet these requirements.
Registered agent service
Some LLCs choose to hire a registered agent service to perform the duties of the LLC’s registered agent.
It’s helpful for foreign LLCs and LLC owners who don’t meet the state requirements. It also may make sense from a cost perspective if someone is not available to receive legal documents during regular business hours.
The costs range from about $40 to $250. Registered agent services are also helpful for business owners who want to keep the privacy of a registered agent’s name and physical street address.
Step 3: File for articles of organization with Missouri Secretary of State
Articles of organization is a cornerstone document indicating the formation of your LLC to the Missouri Secretary of State. Foreign LLCs must also register with Missouri authorities to conduct business in the state.
Articles of Organization costs are the same for domestic and foreign LLCs:
There is not an official processing time in business days provided at this moment. However, as of October 2021, the state indicates that they are experiencing a longer processing time than normal for online submission.
They also state that paper filings will be processed longer than online applications.
Submitting the filing
To register your LLC online in Missouri, use the Business Registration Online Portal.
Paper filings should be sent to:
State of Missouri, Secretary of State
Corporations Division, P.O. Box 778
600 W. Main St., Rm. 322
Jefferson City, MO 65102
Information to include
The articles of organization should include the following details:
- LLC’s business name (and an assumed name, if applicable)
- LLC’s purpose(s)
- The principal business address of the LLC and its registered agent
- Name of the registered agent;
- LLC’s duration
- Whether the LLC is member-managed or manager-managed
- Name(s) and address(es) of each LLC organizer
The Application for Registration of a Foreign LLC must include similar information, with a few additions. It must also list the principal address and jurisdiction in which the LLC is organized and a certificate of good standing from that jurisdiction no more than 60 days old.
Step 4: Obtain an EIN (Employer Identification Number) from the IRS
An Employer Identification Number (EIN) is a unique tax ID used to identify the LLC on federal tax filings to the Internal Revenue Service (IRS). It may be required to file certain business tax forms with the state of Missouri too.
Not every LLC will need an EIN. Single-member LLC owners can use their social security numbers to file federal and state business taxes. However, if your LLC will have at least one employee, you must have an EIN to submit federal tax filings for employment.
Also, your LLC needs an EIN for sales/excise taxes filings and filings for employee-related withholdings or plans.
You can apply for an EIN online for free. Upon verification of submitted information, you’ll get your LLC’s EIN immediately.
Step 5: Prepare an LLC operating agreement
Missouri statute requires that all LLCs formed or registered in its state have an operating agreement.
However, it’s not filed with the Missouri SOS. It’s an internal document for business records.
An operating agreement explains:
- Roles and responsibilities of anyone participating in the LLC.
- Tax treatment elections.
- Membership interests and transferability of such.
- Profit and loss allocations.
- Rules for the conduct and operations of the LLC.
- Voting rules and procedures.
- Other operational matters.
Step 6: Open a business bank account
It’s a good business practice to open a business bank account when you are spending and receiving money on behalf of your LLC.
It simplifies accounting, member profit/loss allocation calculations, and taxes. Also, business bank accounts usually provide additional protections beyond personal bank accounts.
Rates and fees will vary based on features and asset holdings. Some of the common documents you’ll need to open a bank account include your LLC’s EIN, formation documents, business license, and ownership agreements.
Missouri LLC costs, taxes, and fees
Missouri doesn’t require LLCs to file annual reports. Hence there are no annual renewal state fees to pay. Sweet right?
As for taxes, LLCs are classified as pass-through entities for tax purposes by default. It means that LLC member(s) report the income and losses from the company on their personal tax return(s).
In some instances, however, Missouri LLC may be responsible for additional state taxes. These include the following.
1. Sales tax
A 4.225% state tax rate is applied to the sale of retail goods in MO or the cost of taxable services.
2. Corporate income tax
By default, a separate corporate income tax is not collected on the LLC entity. However, if the LLC elects for corporate tax treatment, a corporate tax is applied at state and federal levels. The MO state tax rate is 4% as of 2020. The IRS corporate tax rate is 21% as of 2020.
3. Employee taxes
A business with one or more employees needs to withhold taxes from each employee’s paycheck. The MO state tax rate for employees is 5.4% as of 2021. The state tax is in addition to IRS federal income taxes, which are 6.2% as of 2021.
There are also unique tax situations that are described further on the Missouri Department of Revenue webpage.
Missouri business permits and licenses
Missouri doesn’t require a business permit at the state level.
Instead, an LLC will need to check in with all local governments, cities, counties, and municipalities within which the LLC intends to conduct business to determine whether those local government agencies require a business license and the procedure to obtain one.
For instance, Jefferson City requires all eligible companies to apply for a city business license.
For some industries and professions, there may be additional occupational license and registration requirements. The fees vary greatly.
For instance, a real estate agent license costs $62. But architects face a heftier $100 registration fee.
Pros and cons of forming an LLC in Missouri
Perhaps you have decided to incorporate in Missouri if you’re doing business there.
However, it’s a good idea to consider the pros and cons of this type of business structure and select MO as an incorporation state.
Missouri LLC pros
- No annual report and overall low LLC maintenance costs
- Beneficial tax treatment and limited personal liability for owners
- No required annual meetings and minutes of any meetings are not required
- Certificates showing equity ownership are not required to be issued
- Election of officers/directors is not required
- Flexibility in management, compared to other business entities such as corporations)
Missouri LLC cons
- Varying business license requirements on the city level are confusing
- You need to prepare an operating agreement, even as a single-member LLC
- No clear estimated processing times once filings are submitted
- Less case law, which may be an issue should a dispute arise, as compared to other states with more registered business entities
Takeaways
- Missouri has low LLC registration fees and no annual renewals.
- LLC formation can be done online. The process is straightforward, even for new business owners.
- Some licenses and other registrations may be required for some businesses, so it is a good idea to weigh the costs based on your business operations. Same for tax obligations.
- Keep up to date with any changes in rules, regulations, and rates.
- Seek professional help if you need it.
Missouri LLC FAQs
Here are the most frequently asked questions regarding LLC formation in Missouri.
