How to Register a Contracting Company in Mississippi

Decide the structure first, because changing it later means a new licence application

MSBOC's application asks you to choose exactly one type of business: "Individual/Sole Proprietor, Corporation, Limited Liability Corporation, Limited Liability Partnership, or Limited Partnership. But be sure to choose only one." That answer is not cosmetic. The Board states that a change of name "is allowed if the name style does not indicate you are qualified to perform work in a classification other than the classification(s) in which you are licensed", but that converting a sole proprietorship to an LLC, or an LLC to a corporation, "requires submission of a new application". Board Rule 1.1(2)(n) carries the same asterisk: "a change in entity type (i.e., sole proprietor to LLC or LLC to Inc.) requires completion of a new application."

On the commercial side that new application means a fresh $400.00 fee and a fresh CPA-reviewed financial statement. So the sequence that saves money is: settle the entity, register it, then apply for the licence. Doing it the other way round and reorganising six months later is one of the more expensive avoidable mistakes available in this state.

One more entity trap MSBOC names explicitly: "if the business ID number issued by the Secretary of State changes, the Name Change Form cannot be used. In that case, a new application must be submitted." And the trading name has to be exact - "you must conduct business under the exact name as shown on the application", because "conducting business under any other name is equivalent to unlicensed construction and may subject you to a penalty."

Official sources: MSBOC Apply For A License; MSBOC Frequently Asked Questions; MSBOC Commercial Laws and Rules (Miss. Code Ann. ch. 31-3; Title 30 Part 802)

File with the Secretary of State, and know what each form costs

The Secretary of State runs business filings online. Its FAQ states that after logging in you can "form a new entity, register a foreign entity, file annual reports, file amendments, dissolved entities, change your registered agent or order certificates of good standing and certified copies", and that payment is by "credit card (American Express, Visa, MasterCard, Discover), E-check or through an ACH account". Paper filings with cheques are accepted but process more slowly. The office also notes that "filing fees for business documents are set in statute by the Mississippi legislature", which is why the schedule is a published document rather than a price list.

The domestic filings a Mississippi contractor is most likely to need are cheap. MS LLC Certificate of Formation (F0100) is $50. Articles of Incorporation (F0001) is $50. MS LLC Certificate of Amendment (F0101) is $50, and Articles of Amendment for a corporation (F0012) is $50. An MS LLC Application for Name Reservation (F0110) is $25, as is a corporate Reservation of Name (F0016). A Fictitious Business Name Registration (F0070) is $25 - the filing to make if you trade under a name other than the entity's legal name.

Registered agent changes are their own line items and are worth doing rather than ignoring, because that is where state notices land. An LLC Registered Agent/Office Statement of Change (F0010) is $10; a Certificate of Change of Address of Registered Agent (F0122) is $10 per company; a Certificate of Resignation of Registered Agent (F0038) is $0. The Secretary of State also offers a bulk path: "File Registered Agent Address Change" updates the address "across all associated companies".

If your company was formed in another state, budget five times as much. Application for Registration of Foreign Limited Liability Company (F0200) is $250, Foreign LLC Reinstatement (F0209) is $100, and the Foreign LLC Annual Report (F0208) is $250 a year against $0 for a domestic LLC. A foreign profit corporation's Application for Certificate of Authority (F0002) is $500. To register, the Secretary of State asks you to "attach your Certificate of Good Standing from your home state".

Official sources: Mississippi Secretary of State: Business Services FAQs; Mississippi Secretary of State: Business Documents Filing Fees

Keep the entity alive: annual reports and the reinstatement trap

Mississippi requires an annual report from corporations, LLCs and nonprofits. The Secretary of State states that corporation and LLC reports are "due by April 15th each year" and nonprofit reports "by May 15th", and that the online report "will be pre-populated with the information already in the system, and you will simply have to update the information and submit". The domestic LLC report costs nothing to file, which is exactly why it gets forgotten.

Forgetting it is expensive on the licensing side rather than the filing side. Because MSBOC requires proof of good standing at application AND renewal, an administratively dissolved entity is a licence problem as well as a corporate one - Board Rule 1.1(8) says no certificate "or any renewal thereof" issues until proof of good standing is furnished, and residential Rule 1.1(1)(l) requires the same proof from foreign corporations.

Reinstatement adds a third agency. The Secretary of State states that corporations and certain LLCs must obtain "a tax clearance letter from the Mississippi Department of Revenue" before proceeding with reinstatement. That means an unresolved DOR balance can block the entity filing, which blocks the good-standing proof, which blocks the licence renewal, which after 180 days past expiry means a brand-new licence application. Each of those steps is individually survivable; the chain is not, which is why the April 15 report belongs in a calendar rather than in your memory.

One small privacy note the Secretary of State volunteers, which occasionally matters to sole owners: "your company's FEIN and telephone number will be redacted from forms appearing on the Secretary of State's website." Your registered agent address, however, is public, so use one you are willing to have published.

Official sources: Mississippi Secretary of State: Business Services FAQs; MSBOC Commercial Laws and Rules (Miss. Code Ann. ch. 31-3; Title 30 Part 802); MSBOC Residential Builders Law (Miss. Code Ann. ch. 73-59; Title 30 Part 803); MSBOC Frequently Asked Questions

Register with the Department of Revenue, because MSBOC asks for the number

Mississippi ties the tax account to the licence. MSBOC states that "to obtain a commercial license, applicants must have a Mississippi Sales Tax number or Use Tax number", and that for a residential licence you supply "a Mississippi Income Tax Identification Number, a Federal Tax Identification Number, or a Social Security Number". Miss. Code Ann. Section 31-3-13(a) puts the commercial requirement in statute: no certificate of responsibility "or any renewal thereof shall be issued until the applicant furnishes to the board his Mississippi state sales tax number or Mississippi state use tax number and his state income tax identification numbers".

DOR states the registration rule independently: "prior to any person continuing or engaging in any of the activities described in this Web Page a Sales Tax Permit must be obtained. A Registration Application must be completed in order to procure a Sales Tax Permit for each business location." Note "each business location" - a second yard or shop is a second registration question, not an afterthought.

There is also a permit requirement that reaches into your ability to pull a building permit at all. Section 73-59-18 provides that "all residential contractors, in order to obtain a building permit in the State of Mississippi, shall possess a permit from the Department of Revenue issued under Section 27-65-27", and defines residential contractor for that section broadly - anyone contracting with an owner of residential real estate to construct, repair or renovate "regardless of the cost of the project, and regardless of whether all or part of the cost is expected to be paid as a benefit of a property and casualty insurance policy". The section states it does not apply to a residential contractor "having a permanent place of business in the State of Mississippi or licensed under Section 31-3-1", which makes it primarily an out-of-state and storm-work rule.

One gap stated rather than filled: this pass did not locate and read a Department of Revenue page establishing the Mississippi corporate franchise tax rate or minimum, so no franchise tax figure appears anywhere in this article. If you are forming a corporation rather than an LLC, ask DOR or your accountant for that number directly instead of assuming it from another state.

Official sources: MSBOC Apply For A License; MSBOC Frequently Asked Questions; MSBOC Commercial Laws and Rules (Miss. Code Ann. ch. 31-3; Title 30 Part 802); Mississippi Department of Revenue: Guide for Construction Contractors; MSBOC Residential Builders Law (Miss. Code Ann. ch. 73-59; Title 30 Part 803)

Workers' compensation: the line is five employees, and MSBOC asks for the proof

Mississippi sets its workers' compensation threshold higher than most states. The Workers' Compensation Commission publishes that "all employers with five (5) employees regularly employed are required to provide workers' compensation insurance coverage", and that "if the employer has less than five (5) employees, workers' compensation coverage is not mandatory but may be provided voluntarily by the employer". Two honest caveats about that quotation: it comes from the Commission's own "Mississippi Workers' Compensation Facts" publication, which is dated 2013 and is still served from the Commission's website, and MSBOC independently states the same five-employee figure on its current licensing page - "if you have 5 or more employees, please submit proof of workers compensation coverage."

The Commission also states that "independent contractors are ordinarily excluded from coverage although special protection is given to employees of subcontractors". That second half is the part that catches general contractors. Read it as a warning that classifying a crew as subcontractors does not automatically end your exposure, and take advice on your own facts rather than a rule of thumb.

On the licensing side the requirement is written into both statutes. Miss. Code Ann. Section 73-59-3(2)(a) makes proof of workers' compensation insurance "if required by applicable law" a prerequisite to obtaining or renewing a residential licence, and expressly removes it for inactive licensees. On the commercial side Board Rule 1.1(2)(j) requires an applicant to "provide a certificate of insurance evidencing current workers' compensation coverage, if such coverage is required by state law". Section 73-59-13(1)(f) then makes "failing to maintain workers' compensation insurance, if applicable" a standalone ground for discipline - so letting a policy lapse is a licensing problem, not only an insurance problem.

Official sources: MWCC: Mississippi Workers' Compensation Facts (2013); MSBOC Apply For A License; MSBOC Residential Builders Law (Miss. Code Ann. ch. 73-59; Title 30 Part 803); MSBOC Commercial Laws and Rules (Miss. Code Ann. ch. 31-3; Title 30 Part 802); Mississippi Workers' Compensation Commission

Check the official page yourself before you file, bid or sign

Mississippi splits contractor rules across at least four agencies: MSBOC for the licence, the Secretary of State for the entity, the Department of Revenue for the sales tax permit and the contractor's tax, and the Workers' Compensation Commission for coverage. No single page carries all of it, and each changes on its own schedule. On top of that, Section 73-59-17 puts your local building official in the chain: that official "shall refuse to issue a permit for any undertaking which would classify the applicant as a residential builder or remodeler under this chapter" unless you show you are licensed or exempt, and shall report suspected violations to the Board.

One more reason to check rather than rely on a summary: MSBOC's own published fee schedule and the Board's own Rule 3.4 fee schedule currently disagree on the commercial renewal fee, at $400.00 and $200.00 respectively. We report both and pick neither. Before you send money, open the current fee schedule on msboc.us, or call the Board at 601-354-6161 or 800-880-6161 and confirm the figure for your licence type. MSBOC also warns that application fees are non-refundable and that "applicants have 180 days to complete the application process. After 180 days, incomplete applications are destroyed."

Official sources: MSBOC Fee Schedule (effective January 1, 2016); MSBOC Commercial Laws and Rules (Miss. Code Ann. ch. 31-3; Title 30 Part 802); MSBOC Apply For A License; Mississippi State Board of Contractors; MSBOC Residential Builders Law (Miss. Code Ann. ch. 73-59; Title 30 Part 803)