- How do I register my small business?
What you need to do to register your business depends on what type of
business entity you choose and what activity you are going to be engaged in. If
you decide to incorporate or become a limited
partnership or a limited liability company, you will
need to register that entity with the
Business Services Group at the office of the Mississippi
Secretary of State. That office can be reached at 1-800-256-3494 or
601-359-1633
If you organize your business as a sole
proprietorship (a business owned and operated by an individual) or a
general partnership, you do not need to register your business
entity with the state. However, there may be certain state, city, or town
permits or licenses that are required to operate your business (see question
#3.)
- Do I have to register my business name? How do I determine if the name I choose is okay to use?
State statute requires that every business enterprise operating under an
assumed name must register that name in the city or town in which it is located.
This is often called filing a "D/B/A", which stands for "doing business as," a
nominal fee is typically charged. What you do beyond this depends on a number of
factors. If you incorporate, become a limited partnership or limited liability
company, the name of the business would be registered with the Bureau of
Corporations. To determine whether a name you're considering is in use by
another corporation, or is protected by a trademark or service mark, again you
should contact
Secretary of State
at 1-800-256-3494 or
601-359-1633 Unfortunately, proprietorship
names are not tracked by any one central agency. However, you can employ the
following tactics to safeguard against using another business' name. Check the
telephone listings of surrounding communities. Your local library should have
the various regional directories.
If you have a name for your service
or product, you may need a Trademark (TM) search. The
MSBDC State Office can do a federally registered search and provide you
additional information. Call 800-725-7232 or 662-915-5001.
- Do I need a business license?
The State of Mississippi does not license all businesses; however, your
business may need state and/or local licenses or permits depending on the
particular activity you are engaged in. Links to some of the Mississippi
agencies for specific licensing requirements are below. There may be others.
You will also need to check with your Town or City Clerk to determine local
licensing requirements. Your local SBDC counselor can help you decide what
licenses, if any, you may require. Some (note, this is not a complete list)
required licenses and web sites with information are:
- What legal form of business should I choose?
There are four primary legal forms of business from which to choose: sole
proprietorship, partnership, limited liability company,
and incorporation (both C-corp and Subchapter S.)
A sole proprietorship is owned by an individual (or a married
couple) and it may have one or more employees. Operating a sole proprietorship
means that the owner is personally responsible for all liabilities of the
business. Also, the owner is taxed on a personal level for all profits generated
by the business.
A partnership occurs when two or more people agree to share
ownership of a business. This form of business allows the partners to share
complimentary skills and resources. The owners share, and pay personal taxes on,
the profits of the business. Additionally, each partner is individually
responsible for the liabilities of the business.
Another option is to form a Limited Liability Company is a
combination of the corporate form (providing limited liability) and the
partnership form (allowing you to be taxed as in a partnership). The corporate
entity is created when your business registers with the Mississippi Secretary of
State . This enables the owners to take advantage of
the limited liability aspect of the corporate ownership and to raise equity by
selling shares of the company. For profit entities have the option to chose
either a C- corporation or Subchapter S-corporation status.
If you become a C-corporation, the corporate profits are taxed,
and then the owners will be taxed on their share of the profits and compensation
(i.e. dividends and wages) received from the corporation.
A Subchapter S-corporation does not pay a corporate tax.
If you have any questions regarding these forms of business entities, please
feel free to call your local
Small Business Development Center and/or seek advice from an attorney.
- Do I need a sales tax number and how do I register for one?
If you sell tangible personal property, or provide certain fabrication,
rental, or other particular services, you must obtain a sales tax identification
number, also known as a seller's certificate, from the
Mississippi State Tax Commission. The appropriate forms may be
downloaded from
Mississippi State Tax Commission, or if you have additional questions or
need assistance you can call (601) 923-7000 .
If wholesalers and retailers are reselling your product(s) you would not charge
sales tax, but would provide them your sales tax number for a resale
certificate. Additionally, you would not charge sales tax to consumers who
purchase your product outside of Mississippi . Keep
in mind that after you register, your sales,
regardless if sales tax is charged or not, must be reported regularly to the
Sales Tax Division.
The
Mississippi State Tax Commission sales and use web site has much additional
information.
Corporate and franchise tax FAQs are at
http://www.mstc.state.ms.us/taxareas/corp/faqs/main.htm The State Tax
Commission has district offices located across the state for you convenience.
They are located in Senatobia, Tupelo, Columbus, Greenwood, Meridian,
Brookhaven, Hattiesburg, and Biloxi with the main office in Jackson. Contact
information for each of them is on the web site at
http://www.mstc.state.ms.us/info/offices/main.htm.
- How do I finance the start-up of a small business?
To determine financing needs, you should first prepare a business plan with a
complete set of financial projections including a balance sheet, income
statement, and cash flow statement. With a properly completed business plan, you
will have identified your funding needs. Keep in mind that most small business
start-ups are funded through personal resources including savings, equity or
loans from family, friends or other investors, home equity loans, cash value of
life insurance, or other personal resources. Banks will lend to some business
start-ups if they are satisfied with your business plan, your level of equity
investment, the collateral you have to pledge to the
loan, and your credit history and experience. If your request is denied, ask
your bank if they would consider the loan with a guarantee from the
Small Business Administration (SBA). In addition, there are number of
local and regional economic development agencies that have revolving loan funds
that you may apply for. We recommend that you contact your local
Small Business Development Center for free help on writing business plans
and assistance in finding the type of financing that best suits your business.
- How do I register to become an employer?
To register as an employer, you need to obtain a federal Employer
Identification Number(EIN). This can be accomplished
by filing
IRS Form SS-4. You will also need to register for state income tax
withholding and for an unemployment contributions.
Beginning in 1997, this is done by completing the Combined Filing
For Income Tax Withholding and Unemployment
Contributions, Form 941CN1-ME, or 941/CS1-ME for seasonal employers. Employers
must also keep on file a Employee's Withholding
Certificate (Form W-4) and Employment Eligibility Verification (Form I-9). These
can be obtained from the IRS and the U.S. Department of Immigration and
Naturalization, respectively. Workers compensation insurance is necessary for
all employees, whether part-time or full-time, and can be obtained with the help
of your regular business insurer.
The Mississippi Workmen's Compensation Commission web site has additional
information on Mississippi requirements.
The
Mississippi Unemployment Security Commission web site has information on who
is liable for unemployment taxes in Mississippi. That web site has the employer
registration form on line.
See also
IRS Forms
- If I am self-employed, how do I report my taxes?
Self-employed business owners are required to pay state and federal income
taxes, Social Security, and Medicare based on the profits generated by the
business. Profits in a proprietorship are determined before you draw
compensation from the business (i.e. your draw or wages are not considered an
expense of the business.) Once your liability for federal income tax and self-
employment FICA exceeds $500, you will need to deposit the tax payments to the
IRS (whether this happens in any one quarter or combination of quarters.) You
can estimate and report your federal taxes by using the 1040-ES form, and your
state taxes by using the appropriate Mississippi form.
The
Mississippi State Tax Commission site has forms available for download or
call 601 923 7000 and request forms. You can also derive an estimate of your tax
liability from your most recently completed Schedule C (profit and loss
statement for a proprietorship) or by completing a monthly profit and loss
statement. Be aware that if you don't deposit the appropriate taxes for any
individual quarter, or for the year, the IRS can and will impose stringent
penalties and interest.. If you need these forms,
contact your local IRS office. For additional information on completing the
forms or understanding the requirements, please feel free to call your local
Small Business Development Center.
- What type of insurance should I obtain for my small business?
When you start your own business, there are various types of business
insurance that should be considered essential and others that, while not
essential, may be desirable and add to the security of a business. Most
businesses will require some type of general liability insurance and many
businesses obtain an "umbrella policy" that covers a variety of risks including
personal property, liability, fire, theft, and medical payments. If you have
employees, you will need to obtain workers compensation insurance. Additionally,
if your business owns or uses vehicles for business purposes, automobile
coverage is necessary. Beyond this, what other forms of insurance obtained
depends on what risks are incurred in operating your business, and what kind of
supplementary coverage you want to employ to provide additional security for
your business. The following is a list of certain types of insurance that you
may need to consider: Key Person Insurance, Flood Insurance, Fidelity and Surety
Bonds, Boiler and Machinery Insurance, Product Liability, Business Interruption
Insurance, Overhead Expense, Disability Insurance, and Life Insurance. The best
course of action is to contact an insurance agent, or several agents, for a
consultation regarding
the appropriate types of insurance for you and your business.