Starting an LLC in Missouri, called a Limited Liability Company, is the first step in legally structuring your business. An LLC borrows corporations’ limited liability of corporations and combines it with a sole proprietorship’s flexibility and informality. An LLC seeks to limit the personal liability of business debts and lawsuits from you as the owner.
A limited liability company will take you the below steps to get it up and running.
- Naming Your LLC
- Appointing a Registered Agent
- Filing Articles of your Organization
- Preparing and Operating Agreement
- Complying with the taxman regulatory obligations
Let’s get into the details of each step in starting an LLC in Missouri.
Naming your LLC
In Missouri, the law dictates an LLC name should contain the words “Limited Liability Company” or abbreviated as “LLC.” LLC,” L.L.C.,” or “LC.” The name you pick should be unique from other business entities in Missouri. Using the Missouri Secretary of State’s business name database, check the desired LLC name’s availability. You can reserve the title for 60 days and renew it for additional time either online or using mail with an Application for Reservation of Name(BE1). $25 is the rough amount required.
Please note, when conducting real business, you might opt to use a fictitious name or an assumed name. For this, please file for a DBA (doing business as) with the Missouri Secretary by filing a Fictitious Name Registration.
Appointing a Registered Agent
A registered agent is a business entity who agrees to take up your LLC’s legal papers in case of a lawsuit. This is an essential requirement for starting an LLC in Missouri. Your registered agent must be allowed to conduct business in Missouri and have a physical office address in the state.
Filing Articles of your Organization
Filing your Articles of Organization is your step three in getting your LLC up and running in Missouri. The( LLC1) Articles of Organization must have the following;
- Your LLC’s Name
- Stated in one line, the purpose and how your LLC intends to make money
- The name and physical address of your LLC’s registered agent
- Indicate whether your LLC with have a manager or will be a member-managed entity
- Your LLC’s duration and operating period
- Names and addresses of all organizers
- Your Articles effective date which could be immediate or soon
- Organizers’ signatures
You could file the articles online -Missouri Secretary of State’s online filing portal or go old school and use postal mail. Online filling costs $50 with a convenience fee of about $1.25, while snail mail will cost $105.
Preparing and Operating Agreement
Since 2018, Missouri’s LLC laws require all LCC startups to acquire a written operating agreement. Your Operating Agreement indicates each member’s powers, duties, liabilities, obligations, and powers in the LLC. It’s an internal document and needs no filing by the Secretary of State.
In case your LLC doesn’t adopt an Operating Agreement, your articles of organization and by-laws become your operating agreement.
Complying with the Tax Regulatory Requirements
The taxman needs additional tax regulatory requirements to operate your LLC in Missouri. They include:
Your business type and its location will need your LLC to acquire additional local and state business licenses. The clerk in your area will provide local licenses while the State of Missouri’s Missouri Business Portal should get you the state license information.
Department of Revenue
The Missouri Department of Revenue requires you to register with them in cases where you will sell goods and collect sales taxes. Also, if you have employees, ensure you write as well. The DOR registration can be done online on their portal or manually(from 2643).
Employer Identification Number(EIN)
An EIN is your LLC’s identification number the Internal Revenue Service(IRS) uses to identify your business for taxation. You could call it your business’s social security number. Others may refer to it as Federal Employer Identification Number(FEIN) or Federal Tax Identification Number(FTIN)
With information on starting an LLC in Missouri, how about looking at some LLC’s advantages and disadvantages?
- With an LLC, your assets are safe from the collectors if it suffers a debt crisis or sued for negligence. But you will, of course, lose your initial investment.
- Unlike in corporations where shareholders must make annual payments, give annual reports in yearly meetings, an LLC needs none of that. On the contrary, you need no extensive records, and the state doesn’t require you to file annual reports either.
- With advantage number two, starting an LLC in Missouri means less paperwork for you, and you run the business how you deem fit. Especially in a one-member LLC.
- An LLC provides pass-through taxation without restricting the number of members to have, including their nationalities.
- Corporations require an equal division of profits among shareholders. However, in an LLC, how you share your earnings is at your discretion, regardless of how many you are. Whoever contributes more resources might get a more significant share if you so wish.
- LLCs enjoy the pass-through taxation benefit in that they don’t pay corporate taxes. Instead, the income and expenses trickle through to your income tax on all profits.
Every story has two sides, so does your LLC. While the advantages far outweigh the disadvantages of starting an LLC in Missouri, there are a few below.
- Where you can quickly sell shares in a corporation and change ownership, an LLC would be harder to transfer ownership.
- An LLC has higher costs at the formation level and maintenance because of ongoing fees, and others like franchise fees if you go that route. However, always check with the secretary of State’s office to ascertain charges involved.
Starting an LLC in Missouri is a no brainer if you follow all the essential State’s requirements. If you no longer wish to continue with business in Missouri, always dissolve it officially and in good time.
Otherwise, you risk penalties, legal issues, and tax liabilities. You have two options to dissolve your LLC;
- File Articles of Dissolution in Missouri
- Close the business tax accounts
Pixelated LLC -DepositPhotos