Benefits of a Corporation
A corporation protects its owners’ personal assets if the corporation is sued for a debt or other financial obligation. A corporation also offers more protection than a sole proprietorship or general partnership if someone files a lawsuit against an employee or business partner. There may also be other benefits to forming a corporation, such as tax savings and incentives for investors.
Requirements for Incorporating in Mississippi
Preparing Your Articles of Incorporation
To form a Mississippi corporation, you need to file articles of incorporation with the Secretary of State and pay a filing fee. The corporation legally exists as soon as you file the articles.
The articles of incorporation can include many provisions, but they must contain the following:
- Name of the corporation
- Names and addresses of incorporators
- Registered agent and registered office
- Stock structure
A corporation can have different types of stock, called classes or series. These types of stocks can have different advantages, for example one can offer voting rights while another may not.
In regards to stock structure, the articles of incorporation must also contain the following information:
- The articles must list every class of shares or series within a class and the total number of shares authorized in each.
- If there will be more than one class of shares or series within a class, the articles must prescribe a distinguishing designation for each class or series. Before any shares of a class or series are issued, the articles must describe the rights, preferences and limitations of that class or series.
Naming Your Corporation
The name you choose for your corporation must be available for use in Mississippi. You can check name availability by searching the Secretary of State’s records online.
You can reserve a corporate name for 180 days by submitting an application to the Secretary of State.
Your corporation name must meet the following requirements:
- It must contain the words “corporation,” “incorporated,” “company” or “limited,” or the abbreviations “corp.,” “inc.,” “co.” or “ltd.”
- The name must be distinguishable from the name of any other business that is incorporated or authorized to do business in Mississippi and from any other name that has been reserved by another corporation.
The person or entity that signs and files the articles of incorporation is called an incorporator. When specifying incorporators, you must adhere to the following requirements:
- There may be one or more incorporators.
- An incorporator may be a person or an entity but does not have to be a shareholder in the corporation or a resident of Mississippi.
- The names and addresses of incorporators must be listed in the articles of incorporation.
- If initial directors are not listed in the articles of incorporation, the incorporators must elect directors. They may also approve bylaws and appoint officers. Once the directors have been chosen, the incorporators have no further duties.
Corporate directors manage the corporation’s business and delegate certain tasks to committees and officers. Directors have the duty to act in the best interests of the corporation and its shareholders.
The board of directors must consist of one or more people. Although there is no legal maximum number of directors, the number of directors should be established in the articles of incorporation or bylaws.
The articles of incorporation or bylaws can create eligibility criteria for directors. State law does not restrict who can serve as a director.
Specifying a Registered Agent and Registered Office
All corporations are required to maintain a registered agent and registered office in Mississippi. A registered agent is a person who receives legal documents and notices on behalf of the corporation. A registered office is the agent’s place of business.
The following requirements apply when naming your corporation’s registered agent:
- The articles of incorporation must list the street address of the registered office and the name of the registered agent at that office.
- The registered agent may be an individual who resides in Mississippi or a corporation that has a street address in Mississippi. The registered office may be the same as the corporation’s place of business.
Stating a Corporate Purpose
Every corporation formed in Mississippi has a purpose of engaging in any lawful business. You do not need to state any additional purpose in the articles of incorporation.
Determining Incorporation Bylaws
A corporation’s bylaws specify a corporation’s internal structure and operating rules. Bylaws can contain any sort of provision for managing the business and regulating the affairs of the corporation. Typically, they include such provisions as the number and term of directors and how shareholder voting is conducted.
Although bylaws are not needed to form the corporation and are not filed with the Secretary of State, they do come with the following requirements:
- A corporation must have bylaws. They can be adopted by the directors or the incorporators and kept on file at the corporation’s office.
- Bylaws cannot include anything that is inconsistent with the law or the articles of incorporation.
Costs of Incorporating in Mississippi
The Mississippi Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.
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