How to Move an LLC to Mississippi

An out-of-state LLC can change its state of organization to Mississippi through statutory domestication. Mississippi domestication is a legal transaction that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that domesticates to Mississippi becomes a Mississippi LLC governed by the Mississippi Revised Limited Liability Company Act (Miss.

Code Ann. §§ 79-29-101 through 79-29-1317). The LLC is otherwise the same business entity before and after the domestication process. Whether the domestication can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the name “conversion” for the legal procedure that changes an LLC’s state of organization, also called its “domicile.” In many of those states, a business can complete a conversion to change its domicile or to change its entity type. The same statutory process can accomplish either goal.

Mississippi separates these two procedures. A Mississippi domestication changes a company’s domicile only. A conversion changes a business from one entity form to another. For example, a Mississippi corporation can convert into an LLC. This article deals with domestications that change an out-of-state LLC into a Mississippi LLC.

Why Business Owners Move LLCs to Mississippi

A Mississippi LLC domestication may make sense if a business owner moves to Mississippi or if the owners prefer to have Mississippi law govern the company. An owner might transfer an LLC to Mississippi for any of the following reasons:

• Lower taxes. Mississippi’s tax rates mostly rank about average compared to other states. However, Mississippi is among the top third of states for lowest corporate income tax, and its unemployment tax rates are some of the lowest in the nation. A move to Mississippi may therefore result in substantial tax savings for some companies. The savings can be especially valuable if the move lets the LLC avoid further taxes in the original state by ending the connection that allows the original state to tax the company.
• Improved legal climate for business. Mississippi was not considered a pro-business state historically, but it has become more business-friendly in recent years. A transfer to Mississippi may be a good idea if Mississippi law is a better fit for the company than the current state. Mississippi has tried to create a legal atmosphere that is good for small businesses and that supports certain industries like manufacturing, agriculture, and aquaculture. A business in an industry Mississippi is trying to attract may benefit from a Mississippi domestication, or a transfer may let an LLC take advantage of Mississippi programs designed to spur small-business growth.
• Less annual reporting. An LLC that does business in a state other than its domicile state typically must file annual reports in both states. If an out-of-state LLC does most of its business in Mississippi, it may avoid filing multiple reports if it domesticates into Mississippi. Reducing an LLC’s reporting obligations saves the members or managers time and saves the business the excess reporting fees. Mississippi does not charge Mississippi LLCs an annual reporting fee, but out-of-state LLCs that do business in Mississippi must pay a $250.00 annual fee.
• Owner convenience. An owner who lives in Mississippi may think that Mississippi is a more convenient domicile state for the business. Focusing on one state’s legal system can reduce legal complications and streamline business planning. A Mississippi LLC may also have better access to resources for Mississippi companies.
• Professional networking. An LLC owner who lives in Mississippi can find local professionals who are licensed in Mississippi and experienced with the state’s laws. A Mississippi-resident owner may have a harder time finding local lawyers, accountants, and other contractors to assist an LLC domiciled in another state. A business owner who works with professionals in the same community also has a better opportunity to form long-term professional relationships that provide networking opportunities.

Mississippi LLC Domestication Requirements

Mississippi LLC domestication under Miss. Code Ann. § 79-37-501(b) is available for out-of-state LLCs that meet certain requirements. An LLC domesticating to Mississippi must comply with both Mississippi law and the current state’s law. Mississippi law controls the process and documents filed in Mississippi and determines the domestication’s legal effects.

The current state’s law governs whether the LLC can domesticate to Mississippi, the state must authorize domestication, the content of the written plan of domestication if required, the standard under which the LLC’s members or managers must approve the plan of domestication, and the effective date for the domestication.

Eligibility for Mississippi LLC Domestication

An LLC considering domestication to Mississippi must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC domestications. Not all states do. The current state may call the process “domestication,” “conversion,” or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent domestication to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that Mississippi lets LLCs engage in the company’s field of business. Mississippi’s LLC law does not restrict LLCs from certain businesses, as in some states. A Mississippi LLC can engage in any lawful business activity as long as it complies with any laws that govern or limit the specific activity.

An out-of-state LLC must also confirm that its area of business is lawful in Mississippi in general. If Mississippi prohibits the type of business in which the company is engaged, it should not domesticate to Mississippi.

Mississippi PLLC Domestication

Mississippi authorizes a special type of LLC called a professional limited liability company or PLLC that has the purpose of providing professional services to the public. A professional service is a service that can be provided in Mississippi only by a person who holds the right license or is otherwise authorized by the state licensing authority that governs the profession. Examples of professionals whose services are considered professional services under Mississippi law include dentists, lawyers, physicians, architects, and CPAs.

Mississippi PLLCs are governed by Mississippi’s LLC law and are also subject to requirements and restrictions specific to PLLCs. An out-of-state LLC that will domesticate into Mississippi and become a Mississippi PLLC must ensure that its members and employees have the necessary licenses and that the company is able to satisfy Mississippi’s PLLC rules.

Requirements that a Mississippi PLLC must meet include the following: its name must contain “Professional Limited Liability Company,” “PLLC,” or another acceptable abbreviation; its members must all be licensed individuals or entities owned by licensed individuals; and its only purpose must be to provide a professional service and related services, except that a PLLC can offer more than one professional service if the combination is allowed under the licensing rules that apply to the profession.

Required Documents for Mississippi LLC Domestication

The Mississippi LLC domestication process involves preparing and adopting several domestication documents that must satisfy both states’ requirements. The domestication documents memorialize the terms of the domestication and control the company when the domestication takes effect.

• Plan of Domestication. A Plan of Domestication designed to comply with the requirements of both Mississippi law and the law of the state that the LLC is moving from.
• Statement of Domestication. The Mississippi Statement of Domestication for filing with the Mississippi Secretary of State’s Business Services Division. The statement must contain information required by Miss. Code Ann. § 79-37-505(b).
• Certificate of Formation. The Mississippi Certificate of Formation, filed with the Statement of Domestication. The Certificate of Formation establishes the LLC as a Mississippi domestic entity and must be signed by an authorized person.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, or a similar term.
• Mississippi Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Mississippi LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Mississippi organizational documents as the LLC’s governing documents.

The Statement of Domestication and Certificate of Formation accept electronic signatures under Mississippi law. Filing through the Mississippi Secretary of State’s Business Services Division allows e-filing for electronically signed documents.

Cost of Moving an LLC to Mississippi

The cost of moving an LLC to Mississippi depends on the scope of work involved. The documents and filings described above require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity.

Professional service costs are typically the primary cost component, as they cover the time and effort required for information gathering and planning, preparation of domestication documents, communications with LLC owners about planning and implementing the domestication, and filing documents with state offices in both states.

To find out what your specific move will cost, request a free analysis of your LLC move. In addition to professional service costs, the Mississippi Secretary of State charges a $50.00 filing fee for the Statement of Domestication, which covers all domestication documents filed in Mississippi.

The fees you pay to Mississippi are in addition to any filing fees that must be paid to the LLC’s original state, as most states charge a separate fee for LLCs domesticating out of state.

An out-of-state LLC that domesticates to Mississippi will also incur labor costs and, if applicable, registered agent fees. Labor costs are the amounts charged by the service provider the LLC retains to manage the Mississippi domestication. Service providers may charge a flat fee or charge by the hour, with fee amounts varying by provider.

A Mississippi LLC must have a registered agent with a physical address in Mississippi. A registered agent’s role is to accept service of legal process, notices, and demands for the LLC. A registered agent can be an individual Mississippi resident or an entity with authority to do business in Mississippi. A member or manager of an LLC can be its registered agent if he or she lives in Mississippi.

A registered agent’s name and address become public information easily accessible online. Businesses often hire commercial registered agents to avoid making a member’s or manager’s information public. Commercial registered agents also serve as a stable contact point for the LLC and are especially useful for LLCs that do not have Mississippi addresses.

The Mississippi Secretary of State maintains a list of commercial registered agents with authority to act as commercial registered agents in Mississippi. The fee to hire a commercial registered agent in Mississippi is typically around $150.00 per year.

Processing Time for Mississippi LLC Domestication Filings

A Mississippi LLC domestication proceeds in several steps. The length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to review the information and prepare the domestication documents, the owners’ time to approve and sign the draft documents or request revisions, the service provider’s time to file the final domestication documents with state agencies, and the state agencies’ time to accept and process the filed documents.

Almost all business filings in Mississippi are now submitted online. Online filing allows for faster processing so that Mississippi business filings are often processed in less than one day. A Mississippi LLC domestication becomes effective when it is accepted by the Mississippi Secretary of State’s office or on a delayed effective date, up to 90 days after filing, listed in the statement of domestication.

When the domestication process is complete, the LLC officially becomes a Mississippi LLC. For a detailed breakdown of each phase in the domestication timeline, see our guide to LLC domestication.

Legal Effect and Benefits of Mississippi LLC Domestication

Mississippi LLC domestication moves an out-of-state LLC to Mississippi while providing significant advantages over alternative methods. The domestication process is the best method for most out-of-state LLCs that want to move to Mississippi. Other methods usually take longer, involve higher legal costs, and require more planning and paperwork. Mississippi law declares that the legal effects of a domestication to Mississippi include the following:

• Same company. The Mississippi LLC is considered the same entity with no break or interruption in its existence.
• Domestication does not disrupt the business’s ordinary operations. A Mississippi domestication is an administrative process that need not affect an LLC’s day-to-day business. Domestication lets the company avoid closing offices or pausing regular income-producing work.
• Domestication does not impede employment relationships. The domestication process does not sever the LLC’s employment relationships with its staff. The company does not need to release and re-hire employees, avoiding the disruption to day-to-day work.
• The company keeps the same fundamental identity. An LLC that domesticates into Mississippi is the same company throughout the process. It can continue using the same Employer Identification Number (EIN), and regular tax reporting continues as normal. Legal procedures that force an LLC to change its EIN often lead to confusion with taxing authorities.
• The company’s bank accounts can stay open. A domesticating LLC still owns the same assets after completing the domestication. Its bank accounts are still held by the same company, so there is no need to close accounts and re-open new ones.
• Existing business relationships remain intact. An LLC that domesticates to Mississippi has all the same contractual rights and obligations that it had in the original state. There is no need to form new contracts or renegotiate contractual relationships that are already in place. Contracts remain valid and enforceable after domestication.
• The out-of-state LLC need not dissolve. The domestication process does not end the out-of-state LLC’s existence. Instead, it remains the same company in Mississippi. There is no need for dissolution proceedings in the original state, saving legal fees and reducing the move’s administrative burden.
• The LLC need not register as a foreign LLC. An LLC that domesticates into Mississippi must register in the original state as an out-of-state or foreign LLC only if it will continue doing business there. If the company will focus on Mississippi, it need not register in the original state.
• Mississippi law governs the domesticated company. The domesticated company is now a Mississippi LLC governed by the Revised Mississippi Limited Liability Company Act. Its certificate of formation and written operating agreement take effect and bind the company and members. If the out-of-state LLC had authority to do business in Mississippi as a foreign LLC, the authority is automatically revoked when the domestication takes effect.
• Same property interests and debts. The Mississippi LLC holds title to all property that the out-of-state LLC owned before the domestication. The domestication process is not considered an asset transfer and does not limit the company’s property rights. The Mississippi LLC is responsible for all of the out-of-state LLC’s debts, liabilities, and other obligations. The obligations are not impaired or limited by the domestication process. A member’s liability for an LLC debt (if any) is not affected by the domestication.
• Court cases continue. Pending legal actions and proceedings are not interrupted by the domestication. The Mississippi LLC’s name may be substituted for the out-of-state LLC’s name if the domestication process involved a name change.
• Ownership interests. When the domestication becomes legally effective, membership interests in the out-of-state LLC are converted in the manner agreed by the members in the plan of domestication. This typically means that interests become interests in the Mississippi LLC, but members can agree to convert interests into cash, property, or other consideration.

Moving an LLC Out of Mississippi

Mississippi permits outbound LLC domestication under Miss. Code Ann. § 79-37-501(a). A Mississippi LLC can domesticate to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Mississippi Outbound Domestication Requirements

A Mississippi LLC that domesticates to another state must adopt a written plan of domestication.

The plan must include.

• the Mississippi LLC’s name and entity type
• the LLC’s name and jurisdiction of formation after domestication
• the manner of converting the interests in the Mississippi LLC into interests
• securities
• obligations
• other property
• rights to acquire interests or securities
• or any combination of the foregoing
• the LLC’s proposed articles of organization or equivalent
• the full text of the LLC’s operating agreement or equivalent proposed to be in writing
• the other terms and conditions of the domestication
• any other provision required by Mississippi law or the LLC’s governing documents

A Mississippi LLC must file a Statement of Domestication with the Mississippi Secretary of State’s Business Services Division. The outbound filing must include a plan of domestication approved by the LLC’s members or managers in accordance with Miss. Code Ann. § 79-37-502(a). Mississippi does not require a separate certificate of surrender. The Statement of Domestication completes the Mississippi side of the transaction. The destination state will require its own formation and domestication or conversion documents.

Filing Fees for Moving an LLC from Mississippi

The Mississippi Secretary of State’s Business Services Division charges a filing fee of $50.00 for an outbound Statement of Domestication. The destination state will charge separate filing fees for its formation and domestication or conversion documents.

Mississippi LLC Laws That Apply After the Move

The Mississippi Revised Limited Liability Company Act (Miss. Code Ann. §§ 79-29-101 through 79-29-1317) imposes ongoing requirements on all domestic LLCs, including those formed through domestication from another state. An LLC that domesticates to Mississippi becomes subject to these obligations immediately upon effectiveness of the domestication.

Mississippi Annual Report and Compliance Requirements

Mississippi does not require Mississippi LLCs to file annual reports. Instead, Mississippi LLCs are not subject to annual filing requirements, which is one advantage of domesticating to Mississippi and a benefit compared to other states.

An LLC that domesticates to Mississippi and no longer has to file in the original state will avoid the time and expense of annual filings required by the original state. Out-of-state LLCs that do business in Mississippi must pay a $250.00 annual fee, but this requirement applies only to foreign LLCs, not to LLCs that have domesticated to Mississippi.

Mississippi LLC Operating Agreement Requirements

Mississippi refers to an LLC’s internal governance document as an Operating Agreement under Miss. Code Ann. § 79-29-105(t). The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document.

Mississippi Registered Agent Requirements

A Mississippi LLC must have a registered agent with a physical address in Mississippi. A registered agent’s role is to accept service of legal process, notices, and demands for the LLC. A registered agent can be an individual Mississippi resident or an entity with authority to do business in Mississippi.

A member or manager of an LLC can be its registered agent if he or she lives in Mississippi. A business can hire a commercial registered agent provider to serve as its Mississippi registered agent, which is often a good option for an LLC without a Mississippi location.

Mississippi Member and Manager Protections

Mississippi law provides significant protections for LLC members and managers. Mississippi recognizes charging orders as a remedy, and the charging order remedy is the exclusive remedy by which a judgment creditor of a member or assignee of a member interest can satisfy a judgment out of the member’s interest or transferable interest in the LLC.

Mississippi law also imposes fiduciary duties on members and managers when the LLC is managed by its members or by designated managers. These fiduciary duties include a duty of care and a duty of loyalty.

The duty of care can be eliminated or modified by the operating agreement, except that the operating agreement may not eliminate or modify the duty of care with respect to the manager’s or member’s reliance on the accuracy of information presented to the manager or member if such information was provided by another manager, member, officer, or agent of the LLC.

Similarly, the duty of loyalty can be eliminated or modified by the operating agreement to identify activities or transactions that do not constitute a breach of the duty of loyalty.

Alternatives to Mississippi LLC Domestication

When domestication is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Mississippi LLC and merging the out-of-state LLC into it, with the Mississippi LLC as the surviving entity. The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law.

The Mississippi Secretary of State charges a filing fee of $25.00 for the merger filing, in addition to the $50.00 formation fee for the new Mississippi LLC. Understanding the full domestication and reorganization processes, including document preparation and coordination between both states, is covered in detail in our guide to LLC domestication.

For a state-by-state comparison of LLC domestication and conversion laws across all states, see our guide to LLC domestication by state.