3003 Lakeland Cove, Suite E.  |  Jackson, MS 39232  |  601-420-2200

MASSEY, HIGGINBOTHAM, VISE, AND PHILLIPS, P.A.

Business Entity Formation

What We Do

When you are starting or growing your business, we help you work through some decisions such as

  • How to protect your personal and business assets
  • How to minimize liability
  • How to save money

There are several ways to form your business that offer you different types of asset protection and different tax issues.

  • S corporation
  • Limited Liability Company (LLC)
  • Partnerships
  • Sole proprietorships

The type of business entity you select for your business depends on several factors including whether you will lease land, ownership of land, tax issues, and more.

Limited Liability Company (LLC)

An LLC provides limited protection to individuals by protecting personal assets. The LLC is a separate entity in the eyes of the law, thus the liability of the individual is limited.

Protecting Personal Assets

In order to protect your personal assets through an LLC, it is important to keep personal and business accounts separate. It is also important to sign contracts with in your official capacity as a member of an LLC, not as an individual. For example, you would sign it as: ABC, LLC by Jon Smith, member of ABC LLC, not just Jon Smith.

Annual Requirements

LLCs must file annual reports with the Mississippi Secretary of State’s Office.

Operating Agreement

An operating agreement is an important component of setting up an LLC. This answers such questions as:

  • How do we make decisions?
  • Is it majority vote? Is it unanimous?
  • How do we admit a new member?
  • What happens if someone dies?
  • How do we raise additional capital?

An LLC can also provide protection from creditors by limiting the addition of new members. By stating in the operating agreement that no new members can be admitted unless all members agree, that applies also to creditors. This limits the ability of a creditor to take your interest in an LLC.

Protecting Land

LLCs are a good vehicle to own land with compared to corporations due to taxation when removing land from the business. With an LLC, when  you remove the land from the business, it maintains its same cost basis, so it doesn’t necessarily become a taxable event. Thus, the LLC give you a lot more flexibility in that you can move property in and out with some degree of ease.

Learn more about limited liability companies.

S Corporation

Protecting Personal Assets

An S Corporation provides protection for personal assets by limiting the liability of individuals. Just as with an LLC, you must keep separate accounts and sign contracts in the name of the corporation, not as an individual, to better protect your personal assets.

Annual Requirements

An S Corporation must file paperwork annually with the Secretary of State’s Office. Failure to do so can result in dissolution of the corporation and its protection.

Learn more about the benefits and tax implications of an S Corporation.

Sole Propretiorship

A business is not separated from the individual in a sole proprietorship entity. Liability is not limited as property and assets are not separate. Learn more about sole proprietorships.