Operating Agreement LLC Mississippi

A Mississippi Limited Liability Company (LLC) Operating Agreement is an internal document that outlines how the company will operate. It defines ownership interests, establishes management responsibilities, and details the procedures members will follow when making decisions. Some refer to it as a Mississippi Operating Agreement or Mississippi LLC Company Agreement. Regardless of the name used, it serves as the LLC’s primary internal governance document.

Many Mississippi LLCs adopt an Operating Agreement during formation, while others create one later as the business grows. The document is not filed with the state and remains part of the company’s internal records.

Is a Mississippi Operating Agreement Required?

Mississippi does not require LLCs to maintain an Operating Agreement. Under the Mississippi Limited Liability Company Act, the agreement may be written, oral, or implied. Although optional, a written Operating Agreement is strongly recommended. Without one, the LLC defaults to Mississippi’s statutory rules, which may not match how members intend to structure or manage the business.

Why a Mississippi Operating Agreement Matters

Helps preserve limited liability protection

A written Operating Agreement helps demonstrate that the LLC and its members are separate. Courts may review internal documents when determining whether limited liability protections apply, especially for single member LLCs.

Establishes customized internal procedures

Mississippi’s default rules govern the business only when no Operating Agreement exists. A written agreement allows members to set their own procedures for voting, distributions, management responsibilities, and dispute resolution.

Important for banks and third parties

Banks, lenders, accountants, and attorneys often request an Operating Agreement to verify ownership and authority to make decisions on behalf of the LLC.

Supports Mississippi’s Annual Report requirement

All Mississippi LLCs must file an Annual Report each year. Assigning responsibility for this task in the Operating Agreement helps ensure compliance.

Key Provisions to Include in a Mississippi Operating Agreement

Basic Company Details

• LLC name
• Business purpose
• Principal office address
• Duration of the LLC
• Federal tax classification

Mississippi LLC names must include Limited Liability Company, LLC, or another accepted abbreviation.

Registered Agent and Office

• Name and Mississippi street address of the registered agent
• Rules for updating registered agent information
• Filing procedures with the Mississippi Secretary of State

Member Information

• Names and addresses of members
• Ownership percentages
• Initial capital contributions

Capital Contributions

• Description of each member’s contribution
• Policies for future contributions
• Statement that contributions do not earn interest unless agreed

Management Structure

• Whether the LLC is member managed or manager managed
• Duties and authority of managers or members
• Procedures for appointing or removing managers

Profit and Loss Allocation

• Allocation method for profits and losses
• Timing and conditions for distributions
• Confirmation that distributions may only be made if the LLC can meet its obligations

Tax Election

• Federal tax classification selected by the LLC
• Notice that certain IRS elections require additional filings

Voting Procedures

• Voting rights of members
• Quorum requirements
• Approval thresholds for decisions

Most Mississippi LLCs base voting on ownership percentages unless modified.

Transfers of Interest

• Rules for transferring membership interests
• Admission procedures for new members
• Treatment of interests upon withdrawal, death, or expulsion

Records and Bookkeeping

• Policies for maintaining financial and operational records
• Assignment of responsibility for filing Mississippi’s Annual Report
• Statement that failure to file may result in penalties or administrative dissolution

Compensation

• Rules for compensating members, managers, or officers
• Reimbursement policies for business expenses

Dissolution

• Events that may trigger dissolution
• Procedures for winding up the LLC
• Filing of a Certificate of Dissolution with the Mississippi Secretary of State

Amendments

• Method for modifying the Operating Agreement
• Requirement that amendments be made in writing unless otherwise stated

Management Options for Mississippi LLCs

Member Managed

Members oversee daily operations and have authority to act on behalf of the LLC. This structure is commonly used by smaller or closely held companies. Voting rights generally follow ownership percentages unless otherwise agreed.

Manager Managed

Members appoint one or more managers to run daily operations. Managers may be members or nonmembers. Members retain final authority over major business decisions while delegating routine responsibilities to managers.

Creating and Maintaining the Mississippi Operating Agreement

Drafting and Signing

The Operating Agreement becomes effective when adopted by the members. Mississippi recognizes written, oral, and implied agreements, but a written document reduces uncertainty and potential conflict.

Recordkeeping

The Operating Agreement should be stored with the LLC’s permanent records. Since Mississippi requires Annual Reports, accurate documentation is important for maintaining good standing.

Amending the Agreement

Members may revise the Operating Agreement by following the procedures outlined in the document. If amendments change information filed with the state, the LLC must submit updated filings.