If you own a business that was created in a state other than Mississippi, you will need to qualify or register that business in Mississippi if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Mississippi) limited liability company (LLC) to do business in Mississippi.
For Mississippi purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Mississippi. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in North Dakota is a foreign LLC in South Dakota.
According to Mississippi’s LLC Act, you are required to register your foreign company with the state of Mississippi if you are “transacting business” in Mississippi. What does this mean? Well, like most states, Mississippi’s LLC Act does not specifically define what the phrase “transacting business” means in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Mississippi’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
For the actual legal description of each of these items, check Section 79-29-1015 of the Mississippi Code. If your LLC’s only activity in Mississippi is one or more of the listed items, you should not need to register with the state.
To complete the application, you must provide more or less the same information that you need to create an LLC in your home state. However, since every state is a little different, there may be items that Mississippi asks for that you did not need to provide when you first organized your LLC. More specifically, to apply for registration, you need to provide:
You also must deliver a certificate of existence or equivalent document regarding your LLC, issued by the Secretary of State or equivalent official in the state where the LLC was organized, as part of your application for registration. The filing fee is $250.
If your LLC transacts business in Mississippi without being registered, it cannot bring a lawsuit in the state. However, not having a valid registration does not invalidate any of your LLC’s contracts and does not prohibit your LLC from defending lawsuits in Mississippi. Also, members of your LLC are not liable for the LLC’s debts, obligations, or liabilities solely because the LLC transacted business in Mississippi without registration.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Mississippi are similar. You will, however, have to complete the online application for a certificate of authority for a corporation instead of an LLC. See the Mississippi Secretary of State website for more information and online filing instructions for registering a foreign corporation in Mississippi.