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How to Form an LLC in Missouri

by Annette Weeks | Jan 30, 2019

How to Form an LLC in Missouri

You’re starting a business in Missouri, but before you begin selling your services and wares, you need to determine what your business structure is going to be.  And you’re likely here because you’re considering the Limited Liability Company (LLC) as your business entity of choice. (Not sure? Read this first: Which Business Structure Is Right for Your Business?)

So let’s dig in: how do I form an LLC in Missouri?

Out of all of the business entities, the LLC is one of the most popular structures. But that doesn’t mean it’s right for your business. Let’s break down some of the basics of the LLC.

A limited liability company or LLC is a hybrid business structure that provides the limited legal liability of a corporation and the operational flexibility of a partnership or sole proprietorship. (Pop back up to that link up there for a quick rundown on what those are if you need a refresher.) However, the formation of an LLC is more complex and formal than that of a general partnership, but less complex than a corporation. (Heads up: You will also need to file yearly reports.)

Disclaimer: These are the general guidelines for forming an LLC in Missouri and does not constitute legal advice. Here is a list of service providers in northwest Missouri that provide legal assistance and you can always reach out to a small business attorney.

 

Limited liability company advantages

  • Most common business structure and specifically created for small businesses
  • Separate legal entity
  • Taxed as a sole proprietorship if only one owner or as partnership if there are multiple owners
  • Unlimited number of owners (unless you elect an S-Corp tax status)

Limited liability company disadvantages

  • Can be costly to form
  • Personal tax liability
  • Legal and accounting assistance is recommended

Do you think an LLC is best for your business? The next steps you take are super important so don’t skip any of these steps. Feeling overwhelmed? We got you. Meet with these Resource Partners ready to walk you through forming a business. Or you can always send us a message and we’ll help you with your next steps.  

 

Here are your steps to starting an LLC in Missouri:

  1. File articles of organization with the Secretary of State
  2. Create an operating agreement
  3. Obtain an Employer Identification Number (EIN)
  4. You may be required to register with the Missouri Department of Revenue and/or the Missouri Department of Labor
  5. Check for local city and county offices for licenses and permits

 

Now let’s break these steps down.

1. File your articles of organization

What are the articles of organization? This is the document that outlines the basic details of your company and provides information to the state of Missouri that you are starting an LLC. Without this step, you don’t have an LLC.

Download the Missouri Articles of Organization form here.

Your articles of organization are submitted to the Corporations Division of the State of Missouri either online or by mail. The filing fee is $105 or $50 if submitted online.

There are a bunch of little steps inside this first step so pay attention.

Secure your legal name for your business.

You’ll need to create a legal name for your company. There are thousands of LLCs in the state of Missouri and you have to choose a unique name. Double-check to see if anyone else is using your business name. Do a quick name search on the State of Missouri website.

In the state of Missouri there are a few naming guidelines:

  • Your name must include the phrase “limited liability company” or the abbreviation “LLC”
  • Your name cannot include words that confuse your business with a government agency like the state department, treasury or FBI
  • Some businesses may have to file additional paperwork and licensed individual such as a doctor or lawyer to be part of your LLC

 

Determine if your business is member-managed or manager-managed.

What you decide should 100 percent be based on your own business and not how other business owners structure their business. Consider these factors when deciding on your business structure.

Member-managed structure:

  • Any member can bind the company to obligations with third parties
  • For LLCs with a small amount of members
  • The members are involved in day-to-day operations
  • A vote is required for all major business decisions
  • Also known as “decentralized management” because the administrative power is equal among all members instead of just one manager

Manager-managed structure:

  • Large number of members in the LLC
  • The members are not involved in day-to-day operations
  • Allocates administrative power to one or more specific managers instead of all of the members
  • Does not require all members to vote on business decisions, just the specific managers

NOTE: If you have an existing LLC in good standing in another state and are wanting to do business in Missouri, you need to file for a Foreign LLC.

 

Choose a registered agent

This is where it gets interesting. You are required to nominate a registered agent when registering your LLC in the state of Missouri.

What is a registered agent? A registered agent is a person or business that agrees to send and receive legal documents on behalf of your LLC. A registered agent must be a resident of Missouri or a corporation authorized to transact business in Missouri. You may elect yourself as a registered agent or someone else within your company.

As required by law, the Missouri Secretary of State’s office sends notices, reminders and correspondence to the registered agent at the registered office address. The registered agent is designated by law to receive service of process and legal notices on behalf of the business entity.

A post office box, UPS mailbox or other rented mailbox is NOT allowed as a registered office address. The registered agent must be physically located at the registered office address for the LLC.

Here is our list of registered agents in the state of Missouri.

 

Pay your filing fees.

There is a fee to file your articles of organization. If you file online, the fee is $50 or $105 by mail. The filing fee is not refundable.

 

Check for state licenses

The state may require additional licenses or business registration paperwork to be completed depending on your particular business industry.

2. Create an operating agreement

It is required by the state of Missouri to have an operating agreement.

What is an operating agreement? It’s an internal document that outlines how your LLC will be run, the financial obligations of the members, along with the managerial rights and duties. Though it is required by the state to have an operating agreement, it does not have to be filed with any state offices.

This document makes sure that all business owners are on the same page and reduces the risk of possible future conflicts. Often, a bank will require an operating agreement to set up a company bank account or before lending to an LLC.

Your operating agreement needs to include:

  • Company name, headquarters, and address where mail may be sent
  • List of owners and their percent of ownership (should equal 100 percent) with address, telephone number and email address
  • Minority investors
  • What happens in case of death, disability, divorce or departure of a member
  • Procedures for raising additional capital (debt or equity)
  • Bonuses
  • Distributions, including whether or not you want a capital fund set up and amounts
  • Level of control for operational members (sign checks, order inventory, hire/fire, etc.)
  • Exit strategy – do you want to build the business and sell or is this a long-term commitment?

 

An operating agreement can be as detailed as you want it to be—and it can actually be helpful to your business, giving you some handy guidelines and policies should an uncomfortable situation arise. That said, it’s best to have your operating agreement in place before your business begins operating—and it should be agreed upon by all parties.

 

3. Obtain an EIN

LLCs must obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. You use this number in place of your personal Social Security Number to protect against identity theft. You need an EIN to open a business bank account for your LLC, federal and state tax purposes and when you hire employees for your company.

It doesn’t cost anything to apply for an EIN. Apply for an Employer Identification Number (EIN) online.

 

4. Register your LLC for Missouri state tax

Now that you have a legal business, it’s time to pay your Missouri business taxes. Contact the Missouri Department of Revenue to complete tax forms based on your business activity including products sold and used in your business. You can register online.

You can also register with the Missouri Department of Labor simultaneously if you will have employees.

There are tax assistance offices across the state of Missouri providing services for business owners including volunteer-based tax preparation.

 

5. Check for city/county licenses and permits

It is important to check with your town and county governments where you intend to do business to determine licensing, registration and permitting requirements.

Some professions, occupations or activities require special licenses or certifications. Research industry licenses to find out if your industry has any special requirements. The Missouri Small Business and Technology Development Centers (SBTDCs) also offers a guide to licenses and permits that includes where to find out information on Occupational Licenses. Finally, check with the Missouri Division of Professional Registration.

 

The Missouri Department of Agriculture maintains information about licenses and permits specific to agriculture.

 

Get help from real people

This list may feel a tad bit overwhelming. We get it. You want to make sure you do everything right and don’t miss any steps. Luckily, there are Resource Partners right here in northwest Missouri who can guide you along the way and make sure you get it right the first time.

Here are the Resource Partners in northwest Missouri who can help you with forming a new business:

 

 

Now that you’re legal, let’s help you with your next steps: business planning, funding and finding your customers. We have resources ready to help you with your next step. Let us know what you need and we’ll match you with the right resource to grow your business.

Call us at 866-870-6500 and talk to real folks who can help you with your next steps. Or you can message us and we’ll send you a personal action plan helping you with the next steps to take (for free).

 

Information sourced by the Missouri Secretary of State, How to Start an LLC by TRUiC and Venture Legal.