How to Move an LLC to Mississippi

There are many reasons why a business owner may want to move an LLC to Mississippi. This article discusses the use of domestication, known in some states as LLC conversion, to transfer an LLC to Mississippi.

What is Mississippi LLC Domestication?

Mississippi domestication is a legal process a business uses to change its official home state—called its domicile or state of formation. Mississippi’s domestication law authorizes out-of-state LLCs to domesticate into Mississippi, or Mississippi LLCs can domesticate into another state.¹ In either case, the other state must also have a domestication law that lets an LLC transfer to a new state.

Another legal procedure that Mississippi law authorizes—called a conversion—changes a business into a different type of entity.² For example, a Mississippi corporation can convert into an LLC (or vice versa). In some states, there is one conversion procedure that can change another entity type into an LLC (like a Mississippi conversion) or change an LLC’s domicile to a new state (like a Mississippi domestication).

Mississippi separates the two goals:

• A business that completes a Mississippi conversion always becomes a different type of entity.
• A business that completes a Mississippi domestication always moves to a new state and remains the same type of entity.

This article examines Mississippi’s procedure and rules for domestications that change out-of-state LLCs into Mississippi LLCs.

Why Transfer an LLC to Mississippi?

An LLC owner who moves to a new state often wants to change the business’s domicile to match the owner’s new state of residence. An owner may also want to change a business’s domicile to Mississippi even if the owner does not live there. There are numerous reasons why a business owner might want to transfer a business to a new state. These are some of the most common:

• 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.

What are the Benefits of Mississippi LLC Domestication?

The Mississippi LLC 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. The advantages that make domestication the best option for most companies include:

• 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.³ 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.⁴ 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.
• 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.⁵
• 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.

The benefits of the domestication process compared to alternate methods make it the most streamlined approach for moving most LLCs to Mississippi.

What LLCs Can Convert to Mississippi LLCs?

A company formed in another state can move to Mississippi using the domestication process only if the current state also authorizes LLC domestications.⁶ The current state can use the name domestication or conversion, but it must have a statutory procedure that transfers an LLCs domicile to another state. An out-of-state LLC cannot domesticate into Mississippi if its current state has no LLC domestication process.

An LLC planning a domestication into Mississippi should also verify that it will be able do its type of business as a Mississippi LLC. 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.⁷

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.⁸ 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.⁹ 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 (among others):

• Its name must contain Professional Limited Liability Company, PLLC, or another acceptable abbreviation;¹⁰
• Its members must all be licensed individuals or entities owned by licensed individuals;¹¹ 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.¹²

How Much Does Mississippi LLC Domestication Cost?

An LLC domestication is typically the least expensive method for moving a business to a new state, but there are some costs involved. Transaction costs for a domestication into Mississippi include labor costs, filing fees, and a commercial registered agent’s fee (if applicable).

Labor Costs

A domesticating LLC usually hires a service provider to assist with some or all aspects of the domestication process. Service providers charge a fee—which may be a flat fee or an hourly rate—for the time and effort they put into the project. The actual fee amount varies between providers and may depend on the scope of the provider’s work. A service provider’s work on an LLC domestication typically includes information gathering and planning; preparation of domestication documents; communications with LLC owners about planning and implementing the domestication; and filing documents with state offices that handle business filings (usually the Secretary of State) in both states.

Filing Fees

An LLC domesticating into Mississippi will need to pay filing fees to the Mississippi Secretary of State’s office and to the original state’s equivalent filing office. Mississippi’s fee for a domestication into Mississippi is $50.00—which covers all domestication documents filed in Mississippi.

The current state’s fee depends on the state where the LLC is formed. As an example, Mississippi charges $50.00 for LLCs that domesticate out of Mississippi. There is also a $250.00 fee to register as a foreign LLC in Mississippi. The $250.00 fee is necessary only if the LLC will continue doing business in Mississippi after domesticating out.

Commercial Registered Agent Fees

A Mississippi LLC must have a registered agent with a physical address in Mississippi.¹³ A registered agent’s role is to accept service of legal process, notices, and demands for the LLC.¹⁴ 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.¹⁵ The fee to hire a commercial registered agent in Mississippi is typically around $150.00 per year.

How Long Does Mississippi LLC Domestication Take?

A Mississippi LLC domestication is a less lengthy process than other methods of moving an LLC to a new state. The total turnaround time from start to finish depends on the parties’ timeline to complete each step of the process:

• Business owners’ time to plan the domestication, gather information, and provide information to the document preparer;
• The document preparer’s time to draft the domestication documents;
• The owners’ time to review the domestication documents, request revisions (if needed), and approve and sign the final documents; and
• The Mississippi Secretary of State’s time to process the domestication 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.

What Laws Govern Mississippi LLC Domestication?

The Mississippi LLC domestication process needs to follow two states’ domestication laws: Mississippi and the LLC’s current state. Domestication documents need to satisfy both states’ requirements. Mississippi law is described throughout this article and generally governs the procedures and effects in Mississippi.¹⁶ The current state’s domestication law will control:

• Whether the LLC is able to domesticate from the current state into Mississippi;¹⁷
• What information the LLC’s written plan of domestication must include;
• How the LLC’s members, managers, or both must approve the domestication;¹⁸
• What documents must be filed with the current state’s secretary of state (or equivalent office) and what the documents must contain; and
• Any additional requirements under the current state’s law.

What is the Mississippi LLC Domestication Process?

The Mississippi LLC domestication process consists of two components: document preparation and administrative tasks.

Document Preparation

An LLC domestication into Mississippi requires careful preparation of domestication documents. All documents must comply with both states’ law, and documents filed with state agencies should also observe any additional rules or customs of the particular filing agency.

• Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both Mississippi law and the law of the state that the LLC is moving from.
• Mississippi Statement of Domestication. The Mississippi Statement of Domestication with all information and any related documents needed for filing with the Secretary of State’s Business Services Division.
• 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, certificate of conversion, or a similar term.¹⁹
• Mississippi Certificate of Formation. The Mississippi Certificate of Formation for filing with the Secretary of State’s Business Services Division.
• 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.

Administrative Tasks

An LLC that has prepared written domestication documents next must complete a few administrative tasks to make the domestication legally effective.

• Conduct preliminary name search. Check the official records of the Mississippi Secretary of State’s Business Services Division to determine whether the LLC’s name is available in Mississippi. (If the name is unavailable, a slight name change may be required to complete the domestication.)
• Obtain Certificate of Good Standing or Certificate of Existence. Get Certificate of Good Standing or Certificate of Existence issued by the current state’s Secretary of State or equivalent agency less than 180 days before the date of filing.
• Obtain signatures on the Statement of Domestication. The Statement of Domestication must be signed by the required parties. The Secretary of State’s Business Services Division allows the Statement of Domestication to be e-signed.
• Obtain signatures on the Certificate of Formation. The Certificate of Formation must be signed by the required parties. The Secretary of State’s Business Services Division allows the Certificate of Formation to be e-signed.
• File the Statement of Domestication. File the Statement of Domestication with the Secretary of State’s Business Services Division. The Business Services Division allows the Statement of Domestication to be e-filed.
• File the Certificate of Formation. File the Certificate of Formation with the Secretary of State’s Business Services Division. The Business Services Division allows the Certificate of Formation to be e-filed.
• File domestication documents with prior state. File the domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Mississippi LLC Conversion?

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) listed in the statement of domestication.²⁰ When the domestication process is complete, the LLC officially becomes a Mississippi LLC.

The legal effects of a completed domestication are as follows:

• Same company. The Mississippi LLC is considered the same entity with no break or interruption in its existence.²¹
• Mississippi law. The domesticated company is now a Mississippi LLC governed by the Revised Mississippi Limited Liability Act.²² Its certificate of formation and written operating agreement take effect and bind the company and members.²³ 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.²⁴ The LLC is now a Mississippi LLC, so authority as a foreign LLC is moot.
• Same property interests. 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.²⁵
• Same debts. 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.²⁶ A member’s liability for an LLC debt (if any) is not affected by the domestication. ²⁷
• Contracts remain valid. The Mississippi LLC is still a party to all business contracts in which the out-of-state LLC was involved. The contracts are still valid and enforceable, and the company has the same contractual rights and obligations.²⁸
• Legal cases. 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.²⁹
• 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.³⁰ This typically means that interests become interests in the Mississippi LLC, but members can agree to convert interests into cash, property, or other consideration.
• No dissolution. The LLC is not required to wind up its affairs or dissolve in the original state as a result of a domestication into Mississippi.³¹ Domestication also does not trigger any rights that take effect when a company begins dissolution, winding up, or liquidation—unless the plan of domestication or current state’s law provides otherwise.³²

1. Miss. Code § 79-37-501(a).
2. Miss. Code § 79-37-401.
3. Miss. Code § 79-37-506(a)(1)(B).
4. Miss. Code § 79-37-506(a)(2).
5. Miss. Code § 79-37-506(g).
6. Miss. Code § 79-37-501(b).
7. Miss. Code § 79-29-117(a).
8. Miss. Code § 79-29-901.
9. Miss. Code § 79-29-902(g).
10. Miss. Code § 79-29-908(1).
11. Miss. Code § 79-29-909.
12. Miss. Code § 79-29-904(2).
13. Miss. Code §§ 79-35-4; 79-35-5.
14. Miss. Code § 79-35-13.
15. Miss. Code § 79-35-6.
16. Miss. Code §§ 79-37-505; 79-37-506(a)(1)(A).
17. Miss. Code § 79-37-501(b).
18. Miss. Code § 79-37-503(b).
19. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
20. Miss. Code § 79-37-113(1).
21. Miss. Code § 79-37-506(a)(1)(B).
22. Miss. Code § 79-37-506(a)(1)(A).
23. Miss. Code §§ 79-37-506(a)(6) and (8).
24. Miss. Code § 79-37-506(f).
25. Miss. Code § 79-37-506(a)(2).
26. Miss. Code § 79-37-506(a)(3).
27. Miss. Code § 79-37-506(d).
28. Miss. Code § 79-37-506(a)(4).
29. Miss. Code § 79-37-506(a)(5).
30. Miss. Code § 79-37-506(a)(9).
31. Miss. Code § 79-37-506(g).
32. Miss. Code § 79-37-506(b).